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Is supply chain management important for the retail industry?

Supply Chain

Blog Date
November 11,

Key takeaways:

  • Supply chain management plays a key role in most businesses and is vital to achieving success and customer satisfaction.
  • The role of SCM in the Retail Industry is to get your products to your customers as soon as possible while lowering costs from your end. 
  • The supply chain management professional is responsible for designing and operating the supply chains in the retail industry, from transportation and warehousing to inventory management and logistics information.

Complexity in the retail industry is steadily growing, thanks to customer demands and potent competition. Despite multifaceted channels, a potential consumer expects a seamless service from the retailers. Therefore to reach top-line growth, retailers must focus on exceptional responsiveness and world-class customer service. Here is how supply chain management comes into play.

Supply chain management is a strategic approach that provides organizations to outsmart their competitors and boost customer satisfaction. Simply put, it acts as an alternative tool to survive in the market, keeping customer engagement and transparency in payment in check. 

Scroll down to discover more about the importance of supply chain management in the retail industry.

What is the retail industry?

The retail industry is central to every economy across the globe, ensuring millions of jobs and fueling our economy. In the most fundamental form, the retail industry involves the sale of a final product from the business to the customer through multiple distribution channels. 

The retail sector encompasses all kinds of shops, from small groceries to large department stores, and the point of purchase could be either a brick-and-mortar or online shopping website.

Role of SCM in the retail industry

Role of SCM in retail industry
Optimizing storage space
Faster and efficient delivery
Increased market share
Evaluating customer demand patterns
Reduce warehouse labor costs
Increase productivity
Unified business operations

The consumer evolution has drastically affected the retail sector, and to keep up with the  progression, retailers are seeking ways to reduce the operation cost as much as possible without compromising the product quality and keeping up with the demand forecasting through supply chain management.

Supply chain planning and control will optimize the process and make the supplies move promptly along the chain, improving your reputation in the eyes of your clients. With the role of supply chain management in the retail industry becoming more international, its response to an organization’s supply and satisfaction networks is a significant determination to achieve success. 

Supply chain management in the retail industry is known as the business’s lifeblood, helping them reach the right customer at the right time, before the competitors. A successful retail supply chain management ensures perfect logistics management is optimized throughout the lifecycle of the supply chain, from raw material to end customer. Here we have chalked out the significant benefits of retail supply chain management. 

  • Optimizing storage space

If you consider the storage space of your retail business, you may be spending too much on it. It might be because your warehouse is not arranged properly, and it takes more time to perform inbound and outbound actions. 

A properly-planned storage strategy in supply chain management enables easy collection of data, eventually improving the productivity and profitability of your business. Simply put, this layout will give you a smoother transition for challenging operations by reducing manual errors and abolishing bottlenecks.

  • Faster and efficient delivery

When a retail business cannot effectively deal with the potential problems in its operations, it will lead to a shortage of risk management ability. Supply chain management streamlines the flow of every process, from goods to the impact of any natural disaster, ensuring prompt delivery. 

Supply chain professionals manage the logistics of every organization across the globe. Implementing the proper supply chain management methodologies will help them to easily diagnose the reason for disruptions, enabling seamless movement of products. 

  • Increased market share

Data flow poses a potential challenge for procurement outsourcing organizations. Hence, visibility across the supply chain will positively impact the retail business’s success. Lack of synchronization will affect the ongoing activities. 

However, with SCM in place, visibility, and transparency in every state, you can increase your market share and collaborate with other departments, paving the path for informed decisions. Moreover, this interconnected supply chain will lead to global brand expansion, partnerships, and effective growth of the landscape.

  • Evaluating customer demand patterns

Customer service and customer satisfaction are other crucial factors that aid in determining the profitable revenue growth of a business. As a part of the retail business, your priority should be your customer. Hence the performance of your supply chain should be structured to impact their perception of your products.

Here, proper supply chain management will help you to assess customer demand patterns with clear access to real-time data. Once you have the data, you can decide on the inventory levels you need to focus on, ensuring to reduce manpower and preparing for the upcoming season in advance. 

  • Reduce warehouse labor costs

Warehouse management serves as a critical component in establishing proper retail operations. Implementing effective supply chain management strategies will help you in reducing warehouse labor costs in every aspect, including pricking and packing processes, storage space and costs, and shipping and inventory management. 

SCM will provide your promising visibility into real-time insights in terms of demand forecasting and fulfillment workflows throughout multiple warehouses. Besides lowering costs, it will also help you make the right decisions as you expand your supply chain. 

  • Increase productivity

If you have an enhanced supply process, it will profoundly enhance the prospects and productivity of your retail business. An efficient supply chain management plan assures the delivery of the correct product with the correct quantity on time to the right customers, fulfilling the requirements of both the producer and the distributor.

Simply put, customers are the kings of the retail business. Hence having a well-designed supply chain management will improve customer service and ultimately lead to better growth of your business in the long run.   

  • Unified business operation

Supply chain management is the lifeline of all supplies that exist in societies. In the retail results, SCM focuses on an integrated and holistic approach to business management to meet the specific needs of both consumers and producers.

By facilitating such a unified business approach, it is possible to manage operations across various geographical regions, cooperate and communicate in a defined pattern. It makes the supply chains of the retail sector more efficient and adds value to your competitive advantage.

How to become an in-demand SCM professional?

Considering the importance of retail supply chain management, opting to become an SCM professional would be the smart career choice in this era. Simply put, retail business depends on a well-designed supply chain structure made by SCM professionals who ensure an affordable, immediate, and reliable service.

There are different types of supply chain jobs available at every level, opening up a myriad of opportunities. Below are the steps to begin your career in supply chain management as an eminent professional.

  • The first step in becoming a supply chain professional is to earn a bachelor’s degree in the relevant field of study, be it business, finance, or supply management. You can also opt for a postgraduate degree specially designed to advance your career.
  • You can opt for relevant internship opportunities to gain the knowledge essential to make later moves and acquire promotions in the field.
  • The position also requires certain necessary skills such as project management, cost accounting, e-procurement systems, ERP systems, purchasing, and so on.

Final thoughts 

Retail supply chain management is gaining popularity in recent years since it facilitates direct service to the customers, enhancing satisfaction and giving a competitive edge in the marketplace. Are you eager to build your career as an SCM professional? Online Manipal is the perfect platform to pursue your dream.

PGCP in Logistics and Supply Chain Management is a course designed by Manipal Academy of Higher Education to help aspiring individuals mark their presence in this domain. With excellent theoretical and practical functionality, the program encourages you to gain real-world insight into the retail sector, boosting your career growth in the dynamic space. Join now!


Information related to companies and external organizations is based on secondary research or the opinion of individual authors and must not be interpreted as the official information shared by the concerned organization.

Additionally, information like fee, eligibility, scholarships, finance options etc. on offerings and programs listed on Online Manipal may change as per the discretion of respective universities so please refer to the respective program page for latest information. Any information provided in blogs is not binding and cannot be taken as final.

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