The retail industry is going through significant disruption due to the COVID-19 pandemic outbreak.  With the demand side showing an unpredictable correlation with the supply chain, it has become vital for retailers to look at both sides to address the new normal. In this article, we will focus on the Supply-side, and clearly, retailers are re-imagining the whole Supply Chain construct. Some patterns that are impacting the thought process are as follows:

  1. Accumulated and Locked Inventory: For the non-essential retailers, the pandemic has forced them to land in a situation where there is a whole lot of acquired inventory at various points, warehouse, stores, in flight. While that is a cause of great worry, besides, the majority of stock might also go out of demand to seasonal fluctuation and trends.
  2. Supply Chain – Sourcing Side Breakage: Many items sourced globally will take a big hit in terms of supply as there will be hitches in sourcing from hard-hit COVID zones.
  3. Demand Curve Variation: While the demand curve accelerates at a different pace for different industries, essential retailers will be leading the curve.
  4. Disruption of Business Models: Retailers, in incubation or in steady-state, will look at adopting the new normal like the Subscription Model, Recommence, etc.
  5. Compliance and Regulations: International cross border import/export is expected to see a rise in the list of compliance and controls, focusing on locally or internationally sourced (COVID essentials)  items.
  6. The emergence of Non-store Channels as primary sales driver: Basis the current situation of social distancing and lockdown, considerable emphasis is on revving up the online/digital channel outreach, engagement, and sales. As the demand grows,  the need of the hour is to have ONE supply chain management system which can efficiently optimize both the demand and supply-side.

Based on our conversation with market leaders and the research community, in the post-COVID scenario, we expect that the retailers might not open all stores.  The stores that will open will do so in a staggered manner for an apparent reason for managing cost and less staff due to control the operational cost. As an outcome, the push towards online platforms and the connected supply chain will be much more significant. This outcome will require a robust backend supply chain mechanism powered by preferred fulfillment logic, as they will have to fulfill at least 25% faster than today.  Supply chain allocation algorithms will be powered by artificial intelligence and machine learning to predict the demand and in time sourcing. 

As part of the new normal, the retailer’s role might not be limited to the standard buy, move, and sell philosophy. The retailer will be an orchestrator of a platform-driven approach to managing the supply chain among entities like manufacturers, suppliers, retailers, 3PL, end consumers with the increase of models like BOPIS, drop-ship.  

Besides this, there’s an anticipation of stringent measures from WHO (world health organization) as well as regulatory authorities, where manufacturers and retailers will be bound to enrich their product catalog with data like the origin of the product, transport history, ingredient. While this will immediately kick off enrichment of the product attributes, it will further lead to increased traceability and drive a hyper-personalized conversation as part of outreach and engagement. Global Supplier Management might leap at the point where suppliers are governed by the laws of both the import and export countries to ensure sustainable retail, which will be an obvious choice and not optional anymore.

Zensar has a resilient end to end supply chain capability, which gives us a unique edge in the industry to be able to efficiently manage the supply chain –  starting from driving demand by engaging with the customers through completing the order to Cash flow in an OneView approach. Our capabilities are augmented by the following:

  • Our in-house digital marketing agencies, Indigo Slate and Foolproof, will help deliver hyper-personalization, ensure customer journey mapping, conversion rate optimization, and drive demand conversion.
  • Our Digital Commerce competence provides integrated eCommerce B2C, B2B, and marketplace solutions for leading retailers globally.
  • Leverage our proven omnichannel, WMS (warehouse management system), OMS (order management system) capabilities through various products like Manhattan, Oracle Retail suites of products, and empowered by our Experience platform – Digital Experience Platform Accelerator (DEXA).

Zensar has delivered successful Supply chain transformation programs on the implementation of market-leading products, custom supply-chain optimization components, re-envisioning existing monolith products towards a domain-driven component-based platform architecture. Our data-science driven approach helped our customers to improve pick-pack productivity, slotting optimization, preferred fulfillment of new business models like BOPIS (Buy Online, Pick in Store).

In this journey, we have developed implementation accelerators and dynamic frameworks that deliver with predictable quality and productivity. SIERRA is our flagship product, which allows rapid implementation and digital quality assurance of omnichannel implementation. To learn more about our retail and supply chain solutions and services, please take a look at our Solution Accelerators.

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Dhiman Ray and Sanjay Datta

Posted by Dhiman Ray and Sanjay Datta

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