Crafting Retail Resilience in a Volatile World

Navigating the intricate terrain of the retail supply chain has become increasingly challenging in today’s volatile world. As supply chain disruptions become more frequent, businesses grapple with the impacts of complex and interwoven supply networks. In the face of these challenges, a paradigm shift is underway in the strategies employed to manage risks, ensure business continuity, and incorporate sustainability into the supply chain. In this discussion with Rachit Rungta, Head-Supply Chain Strategy and Network Planning, Reliance Retail, we delve into the dynamic landscape of retail supply chain management, unraveling the strategies and practices essential for success in this ever-evolving environment and a lot more. Edited excerpts follow.

Supply chain disruptions have become more frequent and complex, leading to ineffective conventional responses. A structured and proactive approach involving risk identification and mitigation has proven more effective. Many disruptions are self-inflicted and could be eliminated through lean and integrated supply chain practices and digital transformation.

Best practices include:

• Improving forecasts with exogenous variables

• Diversifying the supply base

• Increasing localization for critical components

• Promoting modularization and standardization

• Shortening lead times and forecasting cycles

• Integrating systems and data flow

• Building flexibility in the network

• Keeping higher critical component inventories

• Improving decision-making capabilities, and

• Planning for risk with what-if simulations

Yes, it is true that in recent years, sustainability has evolved from being an integral part to being an indispensable part of supply chain strategy. Organizations are prioritizing profitability through sustainable business models, operations, and environmental sustainability. As India targets net zero carbon emissions by 2070, many are aligning their sustainability goals accordingly.

To achieve this, companies are focusing on:

1. Reducing miles traveled through network and route optimization

 2. Upgrading fleets with the latest emission norms

3. Using cleaner fuels (CNG)

4. Deploying EVs in last-mile delivery

 5. Increasing the use of telematics and shipment tracking

6. Driving energy-efficient operations across facilities

7. Maximizing power usage from a grid or alternate energy sources

8. Using solar panels to generate solar power

9. Reducing waste and increasing recycling

10.Promoting eco-friendly packaging

While these actions represent significant changes, the ecosystem is still not fully prepared for smooth implementation due to resistance from stakeholders, operational constraints, and high capital expenditure requirements.

The consumer industry has shifted towards premiumization, quick delivery, and convenience. Despite this, businesses are expected to be profitable, putting pressure on supply chains to innovate. An effective performance management system is crucial for measuring, monitoring, and correcting the implementation of identified actions. I have always preferred using a customized SCOR framework for its holistic structure and diagnostic capability. Level 1 strategic KPIs measure overall operational performance, while Level 2 and Level 3 metrics provide diagnostics and identify corrective actions.

Measuring and baselining the current value of the metric is important, as is setting achievable targets. Constant measuring and monitoring identify gaps and root causes, forming part of the feedback loop. Once the target value is achieved and sustainability ensured, the process can be repeated with a revised goal.

I will answer this question in two parts: how collaboration has helped & how the digital supply chain has been a game changer in facilitating this collaboration.

Collaboration has broken down the barriers of siloed working leading to more optimal planning & execution. Would you forecast better, if you had more visibility to channel stock or if you were finalizing the forecast jointly with your channel partner? Would your vendor provide a more timely and right mix of SKUs if she had visibility to your stock position? Would your transporter be able to respond better to your indents if she had visibility to your requirement in advance? Would your warehouse be better placed to handle inbound shipments if there was a collaboration between the warehouse, supplier & transporter?

The answer to all these is yes because collaboration leads to information & asset sharing which in turn reduces uncertainty in the system and more optimal use of assets. Uncertainty will either result in suboptimal delivery or suboptimal use of assets.

Digital supply chain, on the other hand, has been a big enabler in driving collaboration. It has facilitated information and data sharing through system integration like never before. Internally, your systems are connected across the enterprise connecting ERP, OMS, TMS, WMS, Demand planning, supply planning, p2p systems, returns management systems, etc.

Furthermore, these internal systems are connected to the systems of suppliers and customers facilitating end-to-end channel planning. Today companies have visibility to sell in, sell-through, sell-out information & channel stock in real time to better plan their backend resources or control towers have been built that capture & relay operational information across channels for timely corrective action.

I have always acknowledged the impact effective collaboration makes in our operations and for this reason, I have prioritized end-to-end system integration as one of the most critical objectives in the digital strategy.

This is an abridged version of the interview published in the February edition of the Logistics Insider Magazine. To read the complete article, click here.

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