Mikkel Rasmussen, Head of Supply Chain Services, Europe, Maersk

Why are retailers and fashion stores running out of stock? What is causing the bottle necks? According to Mikkel Rasmussen, Head of Supply Chain Services, Europe, at Maersk, there are two potential reasons: misalignment between different functions at companies and the lack of end-to-end supply chain visibility.

Many companies manage their whole supply chain on a spreadsheet and this does not give them the visibility they need of where the stock is within the supply chain. There are solutions available, so companies should use them to their advantage. On top of this, three main mega-trends are currently disrupting supply chains and impacting the availability of goods globally: the push for reducing complexity, managing speed and driving insights.

Overcome complexity, manage speed and make the most of data

With supply chains becoming more and more complex, companies are continuously looking for ways to organise them more effectively. This may involve not just optimising the way goods are transported, but also improving flow between physical and ecommerce sales and adapting to changes in sourcing patterns.

In this situation, it is important to have agility in your supply chain. This can also help when external factors such as trade wars emerge that can have a major impact on businesses and their stock levels. By understanding where the bottlenecks are and being agile, there are ways to overcome these barriers.

Speed is another important factor, but it means different things to different companies. While some of them may simply want to move their goods faster, others will be more interested in securing the right level of inventory based on their selling cycles. By adding flexibility into the supply chain and seamlessly switching between different modes of transport, it is possible to speed up or slow down as needed.

Finally, driving insight has also become crucial. We get more and more data today from various sources, almost to the point where it becomes impossible to navigate through and use it in a meaningful way. The role of logistics providers is to help companies cut through that information noise and select appropriate data points to support decision-making.

Always start with the customer experience

Changing consumer demand has a massive impact on the supply chain, as the customer journey becomes more complex and customers expect to have choice. This leads to smart decisions in terms of placing the inventory. Many retailers divide their supply chains into two parts – international and domestic – but keeping those apart might not be a wise choice. By seeing the supply chain as one flow and having visibility of that flow, there is more chance of meeting the ever-changing customer demand.

There are also clear opportunities for supply chain improvements, but these need to start with the customer experience. By understanding what customers and consumers want, companies are able to organise their supply chains in the way that best addresses those needs. Companies often look at the supply chain as a cost, whereas it should be perceived as a growth enabler.

The key to designing future-proof supply chains is to think about it as an end-to-end flow, with agility and efficiency all stemming from this approach.

How can retailers review their supply chain to ensure they don’t run out of stock?