Confidence in supply chain returning for retailers

Red lorry

New research by Advanced Supply Chain Group (ASCG) shows high confidence amongst 46% of retailers in supply chains normalising to pre-2020 levels, this year.

According to the research of 212 retailers in January, a third think that 2022 will see some improvements in the timeliness and reliability of moving products.

The research also shows that strong levels of confidence exist amongst retailers despite supply chain issues.

Caroline Ellis, commercial director at Advanced Supply Chain Group, said: “Tackling big problems like Brexit and COVID head-on has seen retailers overhaul legacy supply chain systems and cheap, off-the-shelf management programmes.

“It’s fuelled strategic investment in bespoke supply chain software that is better equipping retailers to deal with uncertainty.

“Undoubtedly, there are still challenges on the horizon, but retailers are more optimistic about supply chain stability because they are finding new ways to win back control over inventory management in the face of adversity.”

“Likewise, they are also drawing on supply chain data to pinpoint new solutions for reducing errors and optimising supply chains to mitigate the wider impact of problems.

“We can expect to see continued investment throughout 2022 in supply chains, which will help alleviate pressures caused by ‘Buy Now, Pay Later’ trends leading to higher volumes of goods moving in and out of warehouses.”

Steps being taken by retailers to protect supply chains against uncertainty include improving efficiencies to boost margins and financial returns (30%), investing in supply chain software to enhance stock visibility and stock management (29%) and creating more supply chain contingency plans (26%).

However, the data revealed that 17% of retailers have low confidence in supply chains returning to pre-2020 levels of normality, with an additional 3% having no confidence - believing supply chains this year will experience similar disruption seen in 2021.

Retailers cited the ongoing impact of COVID, Brexit-related changes and rising shipping costs as the three biggest risks preventing supply chains from stabilising.

More than half of retailers (56%) believe environmental extremism poses an increasing risk to the movement of goods in 2022.

Looking beyond delays and disruption, more than a third of retailers (35%) think the ‘Buy Now Pay Later’ trend will have the biggest impact on supply chains in 2022, while 32% think growing consumer demand for same-day deliveries will have a leading influence on the movement of products.

‘Eco-anxiety’ amongst consumers growing more concerned about climate change, was ranked by retailers as the third highest factor most likely to have the biggest impact on supply chains in 2022.

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