Impact of Disruptive Trends on Logistics & Supply Chain Management Practices – The Retail Sector

Disruptive_Trends_-_Retail_Blog_May_19

Many businesses have found innovative use of technology has disrupted the traditional approach to supply chain strategy and the impact of supply chain management on business performance.

However, there are many disruptive trends that can potentially impact supply chain practices, business strategies, supply chain infrastructure and capital asset decisions in the next 5 years. 

We first look at the impact these disruptive trends have on the ‘Retail Sector’: 

 

Key Shifts in Supply Chain Dynamics

The key shifts in retail sector related supply chain dynamics are as follows:

  1. Information Systems: Due to the 24/7 nature of retail business, quality of decisions will depend on credible, auditable, and robust real time data.
  2. Manufacturing Technology: To maximise benefits from Manufacturing Technology a significant initial capital investment is required.
  3. Omni Channel: Transition from mass customisation to mass personalisation is on the horizon.
  4. Sustainability: It is an important element yet not considered a major disruptive factor in the next 5 years.
  5. Customer Proximity: To meet the customers’ expectations of convenience shopping, supply chains will be under significant pressure to deliver smaller volumes to dispersed locations.

 

Key Takeaways for Retail Sector

  • Manufacturing technology is expected to have a significant impact on the supply chain infrastructure and capital/asset investments decisions of firms operating in the retail sector.
  • Corporates need to make high investments in manufacturing technology in order to remain competitive.
  • Because of their wider impact on the entire supply network, information systems are going to have a profound impact on the supply chain infrastructure and capital/asset investments decisions of firms operating in the retail sector.
  • Business must integrate their information systems to align business strategies across the supply chain.
  • Future outlets must be designed to handle smaller volumes and should be located closer to the customer.
  • Demand driven customer proximity is expected to have an impact on the supply chain infrastructure and capital/asset investments decisions of firms operating in the retail sector.
  • Retailers will be required to manage the cost and complexity of final mile in customer fulfilment due to Omni channels.
  • Retailers are making significant investment both in research and capability to meet the challenges posed by Omni channel.
  • Sustainability is not expected to cause major disruption as firms are already pro-active in their actions.
  • Brexit will increase the costs of conducting “business as usual” putting more pressure on the margins of businesses operating in the retail sector.
  • Shortage of high-quality skilled labour is going to push companies towards automation.
  • Companies need to plan on how to decrease their operating costs without compromising on customer experience. 

These finding where part of Cranfield’s research, with Knight Frank LLP, to unravel the potential impact of disruptive trends in the next five years. The focus was on the logistics and supply chain operations of leading national and global companies conducting their business within the UK across a variety of sector. For more information on this work, please download our white paper

Our work in this area is critical to professionalising the supply chain profession and is one of the key themes explored within the Cranfield Supply Chain Management Programme enabling and optimising your supply chain methods to increase resilience, sustainable supply chain management and future supply chain challenges.

Blog produced by: 

  • Professor Richard Wilding OBE, Professor of Supply Chain Strategy and Programme Director of the Supply Chain Management Programme, Cranfield School of Management.
  • Professor Michael Bourlakis, Head of the Logistics, Procurement and Supply Chain Management Group.
  • Dr Hendrik Reefke, Lecturer in Supply Chain Management & Deputy Director of MSc in Logistics & Supply Chain Management.
  • Dr Farooq Habib, Deputy Director of MSc in Procurement and Supply Chain Management.
 

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