Shoppers are demanding more transparency in the retail supply chain – but can retailers deliver that without disrupting their existing models?
As retailers are under greater pressure to quickly and confidently provide information to consumers while responding to increased regulations and intense scrutiny of an ever broader range of stakeholders, the limited one-up, one-down linear supply chain is failing.
Global research, commissioned by Oracle in 2016, revealed that 41% of global consumers want assurance that the food they buy has been responsibly sourced, while 35% would shop more with retailers they think are ethical.
What’s more, 23% of shoppers have abandoned a purchase due to lack of information.
Success and failure
Against this backdrop, effective management of supply chain means more than a few percentage points in terms of margin; it can be the difference between success and failure.
Traditional supply-chains have functioned on limited bi-lateral sharing of information (often in multiple systems and even in some cases in paper form) between the party immediately above and below you in the supply chain (the one-up and one-down model).
Today, retailers need to simplify and accelerate the process of acquiring information and sharing it in real-time, across the business and their supplier network.
Being able to anticipate risk at every point of the chain is increasingly essential for all parties.
Retailers have most to gain, and most to lose, so they must drive this change to satisfy multiple factors, all of which rely upon absolute transparency as to what they are selling.
Information is everything
It is crucial that they find ways to inspire and incentivise suppliers and partners to provide the information required, along with assurances that it is accurate and will be kept up to date.
Transparent sharing of data up and down the chain is one possible advantage to all.
Suppliers get better, faster data on how products are selling that in turn allows better planning and logistics with manufacturers, for example.
Without rapid access to up-to-date information, retailers will not only see areas of the business suffer, but potentially their brand and reputation
A retailer’s ability to give consumers confidence and mitigate risk is only as good as the information it has, so that data must be verified at every stage.
Without rapid access to up-to-date information, retailers will not only see areas of the business suffer, but potentially their brand and reputation.
Product recalls, for example, are hugely complex and expensive, but become even more damaging for the retailer and suppliers when information is incomplete, and risks and scope are not quickly identified.
Ultimately, it all comes back to what you know.
The availability of better, faster and more complete data empowers retailers to anticipate supplier risk, simplify adherence to legislative and regulatory requirements and inspire consumer trust.
- Paul Woodward is senior director of retail supply chain business at Oracle Industries