We conducted a nationwide poll of retailers and discovered that 40% of those that intend to lower total operating expenses are prioritising supply chain inspections. 25% of respondents believe that new supply chain partners may be required.
Cost of living crisis
As consumers become more price conscious and seek out greater value in order to save the necessary money, finding supply chain efficiencies and implementing improvements can play a significant role in limiting margin dilution and creating potential to cut retail selling prices.
As they work to combat the effects of growing inflation and the cost-of-living crisis on their sales over the course of the next year, merchants will give this priority.
In order to strengthen the supply chain and generate financial savings, we believed it would be beneficial to break down some of the major areas and trends.
Our analysis identified three areas where retailers are actively focusing to cut expenses and protect profitability.
storage, fulfilment, and in-country shipping
More and more retailers are coming to us to find out if they are acting correctly in each of these three areas and if there is anything they can change or improve upon, particularly with regard to storage.
Recently, there has been discussion about warehousing. Retailers should think carefully about the value of the money they are spending on large sheds, whether they are owned or rented warehouses, as a result of the global disruption affecting stock stocks.
The cost of warehousing is very high. One of the largest supply chain costs frequently occupies a significant amount of a balance sheet space.
A retailer’s ability to regulate the movement and storage of merchandise will not be negatively impacted by outsourcing and using shared warehouse space, which can result in a wealth of efficiencies. For cash flow and overhead, it can produce a sizable and very instantaneous reward.
A similar path is being taken by merchants’ fulfilment strategies. Retailers have always handled fulfilment in-house because they monitor their brands, keep a tight eye on quality control, and manage inventory. This has turned out to be costly because it necessitates significant expenditures on staffing, fixed assets like buildings and equipment, and other resources.
At Advanced, we have created bar code and unique product identification technology to enable real-time milestone reporting and visibility of stock from receiving to shipping. This indicates that retailers find that using an outside fulfilment company is fairly similar to doing it themselves, but at a significantly cheaper cost.
The retailer can: take advantage of our experience and knowledge by outsourcing to a business like Advanced.
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