The Retail Industry Leaders Association and the supply chain faculty at Auburn University recently published a report called “The State of the Retail Supply Chain.” The research results are based on interviews with Senior Vice Presidents, Vice Presidents, and Directors from 45 large retailers headquartered in North America, including many retail organizations respected for their supply chain capabilities. I don’t want to steal too much of the report’s thunder, but here are a few points that caught my eye:
As the chart below illustrates, the report contains data that allows retailers to understand how others in the industry are organizing their logistics networks.
The report also includes some benchmarking data:
But what I found most interesting was the authors’ analysis of supply chain strategies and the changing role of the supply chain organization.
From an organization perspective, it was encouraging to see that at most companies (64 percent) the top supply chain executive reports to the top company executive. It was also interesting to note that the breadth of responsibility has increased. Historically, supply chain executives were in charge of distribution centers, transportation, inventory management at the DCs, and network design. But the report shows that “a majority of the participants reported that SCM is responsible for, or shares responsibility for, demand forecasting, store replenishment, store inventory allocation and management, and vendor interaction.”
Considering the expanding role of the SCM team, collaboration with store operations and merchandising is also increasing, although the supply chain team is having better luck influencing store operations than the merchandising group. But the report states that “several of the retailers described organization structures intended to bring together merchants, stores and SCM.”
The study also highlights an emerging trend that I’ve reported on as well: the trend toward having workers in a store responsible for inventory and shelf replenishment report to the supply chain organization (see “Should Logistics Personnel Work in Retail Stores”). The authors were more eloquent on the need for this than I was: “All too often, today’s best-in-class retail supply chain ends once the product is delivered to the back door of the store. Ownership of the process then transfers to store employees to get the items to the shelf. Often this work is done by low-wage employees without a vested interest in SCM goals.”
The report covers several other interesting topics. So, if you’re interested in the state of retail supply chain, I recommend you download and read the full report.