MORPHING RETAIL SUPPLY CHAINS HIGH CUSTOMER EXPECTATIONS MEANS REVISING YOUR PRODUCT DISTRIBUTION

Consumer behaviour, technology, globalization, environmental and social concerns, economic fluctuations, and more are among the challenges that companies face trying to serve consumers that are more demanding than ever.

Among organizations, 67 per cent consider meeting customer expectations for speed of delivery a critical factor impacting the structure and flow of their supply chains over the next 12 to 18 months. That’s according to a report from KPMG International, called The Supply Chain Trends Shaking Up 2023.

In the report, KPMG notes these key trends will need to be managed. Countries will be skeptical about cross-border trade cooperation. Cybersecurity will be a concern, while key material access will be in turmoil. Manufacturing footprints; retail and distribution supply chains are morphing and supply chain investments are accelerating. What outcomes could we expect if retail and distribution supply chains morph? Here are some of the possibilities:

Automation and data analytics could help to increase efficiencies;

Omnichannel retail and contactless delivery could help to improve customer experience; Visibility could be improved through digital platforms and data analytics enabling decisions about stock levels, production, and logistics;

Focus on sustainability and environmental impact and improved working conditions; More agility for retailers who reduce dependency on single location and diversify their sup ply chain while reducing supply chain disruption; and Increased flexibility to demand and disruption while adapting to the latest trends and market conditions quicker and more effectively.

Why should companies be concerned about retail and distribution supply chains morphing? The following impacts are among the potential outcomes:

Consumer impact – Production, distribution and sales have a direct impact on prices and availability.

Business impact – Companies will need to adapt their supply chains to stay competitive and how they evolve will impact their ability to meet customer demands, reduce costs, and increase efficiency.

Environmental impact – Evolving supply chains affect carbon footprint, water usage, and waste.

Social impact – The direct impact of how goods are produced, distributed, and sold will have significant impact on the well being of workers and their communities.

Economic impact - As a significant part of the economy changes in the retail and distribution industry will have ripple effects throughout the economy.

Innovation impact – Embracing modern technologies and trends to identify new growth opportunities.

We are used to having so many choices in terms of availability and price. However, the COVID-19 pandemic changed our supply chains and our options. These options include:

Buy online, pick up at store; Buy online, delivered to home or other location;

I n store purchase, delivery to home or other location; Drop ship from warehouse or manufacturing to store, home, or other location; Buy online, return at store or online; and Buy online, return online.

I recently experienced a new option: store-to-warehouse pick up. It was a hot summer day when we pulled off one of Canada’s busiest highways. I was dropping off our youngest son at the duplex where he would be living while attending university. My vehicle was full of clothes, toiletries, and his belongings, along with sleeping bags I had packed just in case we needed them.

Once unloaded, the priority was to get him a new mattress. This might seem like a simple-enough task in a large city with lots of retail stores within a half hour’s drive. Our criterion was to find a queensize mattress in a box that didn’t cost a fortune and would fit in my trunk, as I have a small SUV. Our search started out fine but grew more frustrating as we went from store to store. No one had stock or, if they had stock, it was far more than what I was willing to pay.

We were running out of time and patience, but finally found a mattress in a box for a reasonable price at a major retailer. Unfortunately, they did not have the stock on site. We had to pay and then pick up the mattress at their warehouse which was closing within the next half hour. The warehouse was about 20 minutes away. We paid and made it to the warehouse, just in time.

While this aside illustrates at least one challenge that can arise in retail distribution, KPMG suggests some steps to better manage it going into 2023. For example, consider the future of your distribution and micro-fulfillment centre locations. As well, enhance and advance your e-commerce and omni-channels into true unified commerce process and technology. Review sourcing and supplier strategies to reduce risks, and consider implementing control tower visibility in a predictive environment, leveraging AI and ML.

It will be interesting to see what strategies companies adopt to get ahead of these trends and how it will affect customer experience. SP

Penske Driver app certified in Canada

The Penske Driver mobile app from Penske Truck Leasing has been certified in Canada as an electronic logging device (ELD).

The app meets the requirements of the Canadian ELD Mandate, requiring commercial carriers and drivers to electronically log their hours of service (HOS).

Penske Driver provides a secure and reliable solution for logging HOS, while also streamlining the process, the company says. The app provides real-time visibility into driver performance, allowing fleet managers to track driver productivity and can view real-time vehicle performance to keep fleets running smoothly.

With the app, truck drivers can take advantage of technology while complying with regulations in both the US and Canada.

Companies to speed up supply chain innovation

A total of 59 per cent of surveyed companies say they’ve sped up their investment in innovation over the last two years, according to findings from a supply chain and logistics study from Descartes Systems Group.

As well, 65 per cent plan to increase their technology spending over the next two years; however, 87 per cent say they face internal inhibitors to supply chain and logistics innovation.

Descartes Systems Group released findings from its study: Supply Chain and Logistics Innovation Accelerates, but Has a Long Way to Go. The study examines how technology innovation is changing supply chain and logistics operations and plans for investment. The study analyzes the connection between innovation and business success, the drivers of supply chain and logistics innovation, benefits of innovation, and the obstacles. It also examines where innovation is considered to be the strongest and the weakest, the degree to which key innovative technologies are deployed, and innovation focus areas.

Imports using child or forced labour increases

Connections to child and forced labour have worsened, says a report by World Vision Canada. The Supply Chain Risk Report 2023 reveals that the value of Canadian imports of products like electronics and clothing, that risk being produced by child or forced labour, has increased to $48 billion as of 2021.

The report shows a surge in imports of risky goods of over 50 per cent in the last 10 years, including a 71 per cent increase in electronics to $22.1 billion, and more than 869 per cent increase in imports of protective rubber gloves to more than $800 million in 2021.

Report highlights net-zero advice

Canada’s Net-Zero Advisory Body (NZAB) released its annual report, Compete and Succeed in a Net-Zero Future, featuring 25 solutions to move Canada towards a net-zero economy.

Canada has committed to reducing greenhouse gas emissions by 40 to 45 per cent by 2030 from 2005 levels and reaching net-zero emissions by 2050.

The report to Steven Guilbeault, federal Minister of the Environment and Climate Change, includes 25 recommendations across the NZAB’s