US retailers to spend more on SCM

31 May 2018

US retailers plan to increase spending on supply chain management against a background of online retail expansion, according to a report.

The 2018 State of Retail Supply Chain report, by Auburn University’s Harbert College of Business, said the country’s online retail sector expanded in 2017 at its fastest pace since 2011.

A survey of 83 retail supply chain professionals found more than half planned to increase spending to improve SCM processes, expand omnichannel fulfillment capabilities, and upgrade technology.

“These anticipated spending levels suggest that retailers are investing in supply chain capabilities that will enhance service quality and competitiveness,” said the report.

“Better supply chain execution through such investments will provide retailers with greater agility, especially in the omnichannel space where speed and responsiveness are rewarded.”

When it came to investment priorities for 2018, 53% said they would increase their spending on supply chain management process upgrades compared to 2017.

“Supply chains of these forward-thinking retailers are undergoing transformative changes due to shifting customer requirements,” said the report.

One of the main capabilities retailers should have to be “best in class” is developing relationships with logistics service providers for fulfilment, supply chain execution and operations.

Another vital capability is supply chain sustainability, although the report noted that many customers do not make the connection between their ordering patterns and their impact on sustainable operations which could make such changes difficult to implement.

“Retailers cannot resolve this quandary alone – consumers must also be part of the answer,” the report added.

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