The Future of Retail Post COVID-19: Brexit & Supply Chain Diversification

Digital Workers are Key for Retailers to Diversify Their Supply Chains

One month on from the last-minute Brexit deal and retailers in the UK, across the EU and around the world are still working out exactly what these new trading terms mean for their businesses and how they should to adapt their supply chain and operating models accordingly.

There is growing frustration amongst business leaders on both sides of the channel at a lack of clarity on how the new rules will be applied and high levels of bureaucracy at borders slowing down imports and exports. Worryingly, there are ongoing examples of retailers and courier firms suspending or cutting back deliveries into the EU as they grapple with new border controls as well as import taxes.

The idea that the Brexit deal will put an end to five years of uncertainty for retailers is proving to be wishful thinking.

And of course, it’s not just Brexit that retailers are contending with – there is also the ongoing disruption caused by COVID-19.

Across the industry, whether within the grocery sector, where demand (and sales) continue to soar, or within high street fashion, where enforced store closures and reduced demand is having such a catastrophic impact, the Retail sector finds itself under immense levels of pressure.

Managing supply chain risk in 2021

For Retail leaders, this year is likely to require a similar approach to last year, based around operational agility, resilience and risk mitigation.

Retailers will need to ensure they have the technologies, processes and resources to react quickly to changing circumstances, particularly as lockdown measures continue to be eased and tightened with very little notice.

The need to ensure continuity of services and deliver optimal customer experience across multiple channels will be heightened in the current marketplace. Consumers will not tolerate products being unavailable or poor customer experience, even where it’s due to factors outside of the retailer’s control.

A heightened focus on supply chain diversification

Retailers and manufacturers have been focused on supply chain diversification for a number of years, driven by a marked shift towards economic nationalism in many of the world’s major economies and the ongoing U.S. – China trade war.

Even before the onset of COVID-19, many retailers had identified broadening the range of suppliers they work with as a key strategic imperative and reporting on their progress within their financial reporting.

However, the pandemic has highlighted exactly how far many of these organizations still need to go.

As this Baker McKenzie report states: “COVID-19 has now unleashed a global supply chain crisis across a huge number of organizations, stemming from a lack of understanding and flexibility of the multiple layers of their global supply chains and a lack of diversification in their sourcing strategies.”

Retailers are fully aware of the need to spread thinner their supply chains to minimize the risk (and potential impact) of a key supplier going out of business or being unable to fulfil orders due to the pandemic.

Brexit has emphasized this need even further.

However, identifying, verifying and bringing on board new suppliers, who could be located anywhere in the world, is no easy task, and it’s a lot harder during a global pandemic.

More than ever, retailers need to work with suppliers that they can trust, who have the infrastructure and processes to deliver in challenging times, and who share the same values and approach to business. It requires a huge amount of due diligence to identify the right supplier and agree commercial terms. And then it’s a complex logistical exercise to get the new supplier onboarded, integrate systems, processes and people, and activate the new working relationship.

With so many other immediate priorities, it’s no surprise that retailers are still struggling to diversify their supply chains in a meaningful way. And that means that we’re likely to see increasing numbers of stories of retailers being let down by their supply chains and pictures of empty shelves where certain products should be. The potential impact of this on customer experience, brand reputation and sales are obvious.

The role of Intelligent Automation in supply chain diversification

The biggest barrier to supply chain diversification for most retailers is resources and cost. They simply don’t have the time to undertake what is rightly seen as a rigorous, painstaking process, particularly during the pandemic, when there are so many other more immediate, more visible priorities.

However, we’re now working with a number of retailers to explore how intelligent automation can help them to address this resourcing problem, with digital workers being deployed to undertake the ‘heavy lifting’ work that goes with finding, engaging, selecting and onboarding new suppliers, whether domestic, regional or global.

By introducing an intelligent digital workforce, which can be scaled up or down in real-time according to business need, retailers can automate process-driven work across every area of supply chain management and optimization.

When it comes to supply chain diversification, digital workers can be used to in a whole host of ways, including:

• Gathering and analyzing data to compare suppliers
• Verifying responsible sourcing credentials
• Co-ordinating contractual processes
• Onboarding new suppliers and integrating systems and processes
• Managing ongoing relationships
• Reporting on supplier performance

There is massive potential here for retail leaders to completely transform the way that they approach this important strategic imperative. A digital workforce can dramatically accelerate the time it takes retailers to find and onboard new suppliers, and then they can manage these relationships in a transparent and strategic way.

What’s more, retailers can free up time within their teams for skilled workers to focus on establishing close relationships with suppliers, enabling early identification of potential supply issues so that problems can be addressed before they have an impact on customers and commercials.

So as the fallout from Brexit continues to cause chaos at UK borders and wider confusion around the world, and COVID-19 continues to threaten the fortunes and existence of businesses large and small, supply chain diversification can no longer be seen as a long-term objective for retailers. It has become one of the most urgent priorities, critical to remaining competitive in a turbulent economy.

With Intelligent Automation, retailers can navigate around many of the traditional obstacles to finding and onboarding new suppliers, minimizing their risk and ensuring they are able to deliver product availability and meet customer needs throughout the pandemic and beyond.

Join me next week for my 3rd blog in this series, where I will take a look at how COVID-19 will impact Retail Transformation and Innovation initiatives.

Until next time!

Coreen

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