Professional Clothing: Chemical Usage Under The Spotlight
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International retail supply chains are vastly complex systems, and the task of managing these systems is rife with challenges. Many different factors affect global supply chains, from geographical constraints and retail logistics to international politics and consumer attitudes. As such, international retail supply chain challenges change yearly—and often monthly.
As we move into a new decade, here are five of the most pressing challenges for retail supply chains.
Challenge 1: Changing consumer demand
The advent of online communication over the past two decades has radically changed the relationships between consumers, brands, manufacturers, and products. Consumers have more ways than ever to discuss their product and service experiences with friends, other consumers, and brands themselves. As a result, the demand for high-quality, sustainable products is increasing. For many consumers, environmental and ethical practices have become as important as price.
A large proportion of consumers are now making purchasing decisions on the basis of concerns about climate change, pollution, workplace safety, and other related issues. While many brands are rising to meet the needs of these consumers, other brands are facing increased scrutiny from consumers, shareholders, and nonprofits
Challenge 2: Increasing distribution complexity
As the online marketplace has developed, more channels to market have become available to retailers. The same product may be sold through a company’s own brick and mortar stores, on its website, via other physical retail partners, or by any number of third-party online retailers.
Depending on the product, any or all of these retail methods may provide an effective route to consumers. Many consumers still enjoy the in-store retail shopping experience, while others expect to be able to order products online directly and receive them within a few days. Many consumers fall into both camps.
Managing supply chain logistics in a way that maximizes the potential of each of these opportunities while minimizing risk is a constant balancing act. Retail supply chains must consider extensive planning, innovative strategies, and flexibility in the face of ever-changing global landscapes.
Challenge 2: Increasing distribution complexity
As the online marketplace has developed, more channels to market have become available to retailers. The same product may be sold through a company’s own brick and mortar stores, on its website, via other physical retail partners, or by any number of third-party online retailers.
Depending on the product, any or all of these retail methods may provide an effective route to consumers. Many consumers still enjoy the in-store retail shopping experience, while others expect to be able to order products online directly and receive them within a few days. Many consumers fall into both camps.
Managing supply chain logistics in a way that maximizes the potential of each of these opportunities while minimizing risk is a constant balancing act. Retail supply chains must consider extensive planning, innovative strategies, and flexibility in the face of ever-changing global landscapes.
Challenge 3: Climate-related risks
Climate change affects international supply chains and retail logistics in a variety of ways. The increasingly irregular weather patterns and frequency of extreme weather events are already impacting strategic factors, such as transportation, employee health and safety, and seasonal demand.
These risks are an international concern, and the importance of corporate involvement in minimizing and mitigating the effects of climate change figures significantly into the global agenda. As a result, many investors, financial reporting standards, and environmental reporting standards integrate climate-related risks and mitigation into their assessments of a company’s performance. An international supply chain that has mitigation measures and climate resiliency built into its operations is more likely to reduce its risk—and enhance its reputation.
Challenge 4: International concerns
By their nature, international supply chains are vulnerable to changes in international relations. From negotiation breakdowns to new trade deals, these changes can be drastic and sudden, and can generate risk factors that are difficult to predict.
The recent escalation of trade relations between China and the United States is perhaps the most striking current example of how international relations can affect international supply chains. The recent announcement of tariff policy changes sparked opinion and debate across the retail sector, and led to speculation, risk reassessment, and massive shifts in international supply chains.
In the coming years, rapid adaptability to these kinds of sweeping changes will be a key part of retail logistics and international supply chain management and strategy.
Challenge 5: Relationship management
Managing relationships with suppliers can be a very time-intensive process for brands with international supply chains.
Working with every supplier in a chain to develop performance standards, to report progress against those standards, and to identify opportunities for new success can seem like a daunting task. However, allocating the required resources to manage these relationships effectively will lead to significantly improved efficiencies and will build greater consumer trust in the long term.
Making use of external consultant services — to provide expert personnel and specialized software, for example — can be a powerful way to streamline the complications of this process.
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