Note: Today’s post is part of our “Editor’s Choice” series where we highlight recent posts published by our sponsors that provide supply chain insights and advice. This article is from Asena Denizeri & Anil Gurbuz at Solvoyo and examines the challenges around supply chain planning for 2022 and beyond.
Since the start of the Covid-19 pandemic in 2020, the world has dealt with supply chain issues. It is not a surprise for customers to walk into stores with empty shelves or for companies to not receive shipments from their overseas suppliers. As we welcome 2022, we also welcome new supply chain challenges. Here are the challenges retailers may face in their supply chain operations in 2022 and some tips for overcoming them.
Insufficient materials to meet customer demand
At the beginning of the pandemic, we have witnessed an increased demand (hoarding!) for toilet paper, pasta, canned food, and disinfectant sprays. As we proceeded with the pandemic and working from home became a reality for the majority, the demand for home-office appliances like webcams and microphones increased. Then as we slowly started going out and getting used to the new normal, people realized that public transportation was not the best option because of virus transmissions, which increased the demand for cars.
Thankfully, those zombie apocalypse movie-like scenes at the supermarkets are over; but the uncertainties in demand like sudden increase or decrease will continue in 2022. It is not easy for companies to cope with customers’ sudden increases in demand without agile planning capabilities. In addition, there are disruptions in the manufacturing of parts and supplies of raw materials. Leading to long lead times, shortages, rising prices, and complications in transportation lines.
The ongoing chip crisis since last year affecting 100+ industries is the best example: supply couldn’t meet the increased demand, which led to rising prices and shortages in computers, cars, and pretty much any other electronics product with chips. As we have seen in 2021, businesses automated and integrated supply chain planning capabilities, including demand-sensing, dynamic safety-stock management, inventory optimization, and external collaboration. Having end-to-end visibility will manage their supply chains more effectively in light of uncertainty, avoid stock-outs and keep their customers happy.
Changing trends in lifestyle and impacts on fashion retail
Pretty much all around the world, lockdowns and ever-changing curfew hours have been a reality for customers in 2021. Although we may not go back to those days (hopefully!), this experience has changed how we dress and exercise. We stopped going to the gyms and favored outdoor activities or at-home exercises. Many of us tried at least once to follow along with the most-watched home cardio workout video on Youtube or went for their first run around the neighborhood.
In 2022, the stars of the fitness world are still outdoor sports and at-home workouts. While increasing demand for at-home exercise equipment also expedited the expansion of the online wellness industry. We witnessed a surge in mobile wellness applications, online personal training, meditation, and yoga workshops more accessible to everyone around the globe. Ultimately, sportswear companies were the winners, and fashion companies changed their assortments to include active and lounge collections.
Retailers who specialized in business attire were forced to reassess their place in the new world, and many of them started including more casual-chic styles for their customers. With the changing preferences and new ideas being tested, taking a test-read-and-react approach to assortment planning, leveraging advanced analytics and AI/ML technology for forecasting, and changing the way they order and interact with their suppliers to minimize risk will continue to be essential for fashion brands. As many retailers will look into sourcing products locally, re-evaluating their supply and logistics networks for optimizing their supply chains will be more critical than ever.
To read the full article, click HERE.