The top supply chain challenge for retailers is…

Dan Berthiaume
Senior Editor, Technology
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The two biggest supply chain issues reported by retailers both involve demand fluctuations.

According to “Managing Through Disruptive Times with Data Driven Speed and Adaptability,” a new retail survey from RSR Research, 56% of respondents selected fulfilling online demand as a top three supply chain challenge that has been most challenging to their company in the past 12 months. Keeping forecasts in sync with changing demand closely followed at 52%.

Other leading supply chain challenges from the past 12 months included managing moving supply chain capacity bottlenecks (47%), lockdowns reducing demand for products (38%), and securing availability of supply (37%).

Looking ahead to the next 12 to 18 months, the survey finds respondents are most likely to expect the need to improve inventory productivity (41%) as a top three supply chain challenge. Closely following are the need monitor supply chain, DC/warehouse, and picking capacity (39%) and need to increase the profitability of online order fulfillment (38%).

RSR Research also examined differences in how “retail winner” respondents with comparable-store/channel sales growth above the industry average of 4.5% view opportunities to address these challenges in contrast to all other respondents. Three-quarters (76%) of winners and 29% of other respondents see strategic placement of inventory throughout the supply chain to better fulfill customer needs as an opportunity.

Similar gaps exist in the percentages of retail winners and other respondents who see opportunity in taking steps such as better understanding (and reacting to) unplanned events that drive a dramatic change in customer behavior (63% vs. 49%), better understanding the dramatic changes in customer preference and “path to purchase” as they engage (61% vs. 40%), optimizing omnichannel order fulfillment to improve profitability (61% vs. 44%), and reducing of waste/shrink within the supply chain (50% vs. 27%).

In addition, the survey examined differences in the importance retail winners and other respondents place on selected aspects of demand forecasting for future success, with much more varied results. When asked if they rated the following aspects as “high value,” respondents said:

•    Being able to produce highly accurate and granular forecasts (77% winners, 51% others)
•    Being able to leverage new data sources, such as social media or regional mobility data in demand forecasting (61%/60%)
•    Being able to react quickly and automatically to changes in local demand (61%/64%)
•    Being able to leverage the same forecast throughout operations in inventory management, workforce management, and capacity management (59%/47%)
•    Forecasting returns (58%/29%)
•    Using the same forecast for the end-to-end supply chain (57%/42%)
•    Accurately capturing the impact of promotions and price changes on demand (55%/53%)
•    Accurate capturing the impact of external factors, such as the weather, competition or local events, on-demand (54%/36%)

RSR Research surveyed 160 global retailers in February 2021, primarily from the U.S. and Canada.