Executive Briefings

Cost Containment by Supply Chain Executives Greatly Helped Retail Survive Downturn

Analyst Insight: Thanks to cost reduction initiatives introduced by supply chain management executives, retailers were able to tap into existing opportunities to streamline their supply chains, which lowered their bottom line costs, saved billions across the industry and enabled them to survive the worst recession in history. Moving forward, these cost structure enhancements and efficiencies will enable retailers to thrive as the economy becomes healthy again.

-Casey Chroust, executive vice president of retail operations for the Retail Industry Leaders Association

Expert analysis finds that leading retailers have survived the economic downturn in part because of the cost containment strategies implemented by supply chain management executives. By streamlining their processes and coming up with creative ways to cut costs out of the supply chain at a time when top-line growth was held in check, retailers were able to stop the bleeding and put themselves in a stronger position for success as the climate now shifts toward recovery.

The positive effect of these efforts has led to the growing stature of supply chain management throughout the retail organization and recognition of its importance from retail CEOs. The expansion of SCM influence up and downstream within the organization is paving the way for new and improved strategies from supply chain management executives.

While last year's strategic emphasis was focused solely on cost control, the shift from survival to recovery has spurred a change to a more balanced approach in terms of cost, service and revenue growth. Supply chain management executives are also placing an emphasis on responsiveness, agility and lean operations.

Looking ahead to 2011, supply chain management executives will want to make supply chain processes easier to manage. They are utilizing technology and increasing visibility to support brick and mortar, online and mobile channels. They are also shortening lead times and strategically locating products for effective response to demand, while partnering with service providers to reduce replenishment cycle times.

Supply chain executives are working to extend planning all the way to the store shelf and support the rapidly evolving multi-channel space. They are also collaborating with store operations managers to design efficient dock-door-to-shelf product flows and optimize receiving, backroom management and shelf restocking operations.

Leading retailers are also embracing the growing private-label trend, and in some cases they are taking greater ownership and even control of the manufacture of private-label goods. This gives retailers greater control over product flow and availability and helps to reduce safety stocks.

The Outlook

In 2011, supply chain management executives will still need to effectively address the myriad issues that continue to change and evolve, including: sustainability, fluctuating fuel costs, new government regulations, evolving multi-channel operations, and utilization of the latest technological advancements.

Analyst Insight: Thanks to cost reduction initiatives introduced by supply chain management executives, retailers were able to tap into existing opportunities to streamline their supply chains, which lowered their bottom line costs, saved billions across the industry and enabled them to survive the worst recession in history. Moving forward, these cost structure enhancements and efficiencies will enable retailers to thrive as the economy becomes healthy again.

-Casey Chroust, executive vice president of retail operations for the Retail Industry Leaders Association

Expert analysis finds that leading retailers have survived the economic downturn in part because of the cost containment strategies implemented by supply chain management executives. By streamlining their processes and coming up with creative ways to cut costs out of the supply chain at a time when top-line growth was held in check, retailers were able to stop the bleeding and put themselves in a stronger position for success as the climate now shifts toward recovery.

The positive effect of these efforts has led to the growing stature of supply chain management throughout the retail organization and recognition of its importance from retail CEOs. The expansion of SCM influence up and downstream within the organization is paving the way for new and improved strategies from supply chain management executives.

While last year's strategic emphasis was focused solely on cost control, the shift from survival to recovery has spurred a change to a more balanced approach in terms of cost, service and revenue growth. Supply chain management executives are also placing an emphasis on responsiveness, agility and lean operations.

Looking ahead to 2011, supply chain management executives will want to make supply chain processes easier to manage. They are utilizing technology and increasing visibility to support brick and mortar, online and mobile channels. They are also shortening lead times and strategically locating products for effective response to demand, while partnering with service providers to reduce replenishment cycle times.

Supply chain executives are working to extend planning all the way to the store shelf and support the rapidly evolving multi-channel space. They are also collaborating with store operations managers to design efficient dock-door-to-shelf product flows and optimize receiving, backroom management and shelf restocking operations.

Leading retailers are also embracing the growing private-label trend, and in some cases they are taking greater ownership and even control of the manufacture of private-label goods. This gives retailers greater control over product flow and availability and helps to reduce safety stocks.

The Outlook

In 2011, supply chain management executives will still need to effectively address the myriad issues that continue to change and evolve, including: sustainability, fluctuating fuel costs, new government regulations, evolving multi-channel operations, and utilization of the latest technological advancements.