Unlock the potential of pre-retail logistics: move products quickly, accurately and effectively

Squeezed margins and supply chain disruption make it more important than ever to get logistics operations right first time, every time. This is shining the spotlight on pre-retail logistics – the movement of products before they reach consumers – with retailers, manufacturers and brands all seeking solutions to eliminate errors and inefficiencies that cause margin dilution and lengthy lead times.

Logistics company Advanced Supply Chain (ASC), which is the headline sponsor of Drapers Supply Chain Summit, taking place on 3 July at The Soho Hotel in London, works closely with retailers and suppliers to optimise performance and productivity throughout pre-retail logistics. Here, the company’s sales director, Stuart Greenfield, lifts the lid on how to move products quickly, accurately and effectively.

Stuart Greenfield

Pre-retail challenges 

Many different – and evolving – factors have brought pre-retail compliance challenges for both retailers and their suppliers. Growth in omnichannel retail has added more sales channels, as well as multiple formats of packaging and labelling. The path to net zero carbon emissions can also create new complexities. Looking at scope 3 emissions (those that are the result of activities not owned or controlled by your business), for example, intensifies the focus on packaging efficiencies. Extended Producer Responsibility (EPR) obligations are also likely to do the same soon.

Competitive markets and tough trading conditions over recent years have added further pressures for eliminating errors and waste during pre-retail logistics.

We recently conducted an Advance Supply Chain survey of 200 manufacturers and brands, and found that 44% of those interviewed said retailers are placing the most emphasis on time to market and delivery deadlines. Optimising processes is key to reducing lead times, enabling this quicker time to market, and giving retailers an edge when it comes to winning sales and building brand loyalty. Optimisation can also drive efficiencies that address margin dilution.

These challenges have sharpened the focus on pre-retail logistics, particularly as our survey found that 20% of those interviewed had lost business with retailers as a result of non-compliance issues.

This is prompting many suppliers to prioritise a retailer-centred approach to compliance.

And while 51% of our survey said they have incurred financial penalties from retailers for non-compliance – with an average penalty of £1,658 during the past 12 months – this retailer-centred strategy is being driven by more than just a keenness to mitigate financial penalties.

Understanding retailer requirements 

Avoiding chargebacks (financial penalties) for failure to meet specified standards agreed with customers and key performance indicators (KPIs) is important. However, we are seeing a growing trend of suppliers motivated more by the desire to strengthen relationships and build effective partnerships with retailers. Our research found that 63% of those surveyed believe improving retailer satisfaction is a very important motivation for outsourcing pre-retail logistics. Vendors are therefore working to better understand the standards and conditions set out by retailers, and thinking about why these are crucial. Instead of focusing on penalties, suppliers are looking at the upstream benefits of compliance, and how they can add value here.

With this approach in mind, suppliers are developing pre-retail solutions that save time, resources, usage of materials and touchpoints. This stretches from the order booking portals used by retailers, right through to the quality control of outbound goods.

Automation and digitalisation 

Touchscreen kiosks are being used in warehouses to improve the digitalisation of orders, and enhance traceability and visibility throughout storage, handling and distribution. Live tracking better supports capacity planning, right down to the level of units and cartons, and provides insights that enable more accurate and effective stock inventory management, both for suppliers and their retail customers. Automated stock inventory management systems can also be configured to send email notifications to retailers about order status.

Digitalisation and automation throughout pre-retail logistics is a vital step towards maximising packaging and labelling consistencies, too. Via touchscreen kiosks, suppliers can easily print labels on demand, with these set according to formats provided by retailers, or developed bespoke to their requirements. This minimises errors caused by the manual writing and filling-out of labels, saving time and avoiding mistakes that have to be corrected.

In addition to improving the quality of data input, digitalising and automating pre-retail processes streamlines and standardises working methods. Levels of administration can be cut, and workflows and throughput better planned. For example, capable IT systems and transport management systems allow suppliers to accurately calculate cube optimisation, which is a measurement of how effectively the total storage capacity of a vehicle is used, potentially reducing the number of vehicles on the road and their movements.

The combination of these performance benefits is driving retailer satisfaction and helping build closer partnerships between retailers and suppliers, because they are not only driving compliance, but also eliminating delays and bottlenecks. There is less duplication of processes and fewer mistakes, meaning suppliers can move goods through warehouses more quickly, without risk to quality. Material usage, such as how goods are packaged during inbound and outbound logistics, can also be better co-ordinated to avoid time and wastage caused by any unnecessary re-packing or re-branding.

A focus on these key areas – labelling, connectivity, dwell time and consolidated deliveries – can help to significantly improve speed to market. In some cases, we have seen fashion brands cut average lead times from five days to two days for deliveries, while a fashion retailer has reduced average dwell time at its fulfilment centre by 48 hours.

Suppliers are increasingly embracing this retailer-centred approach to optimisation during pre-retail to get their orders right first time, every time. This is delivering greater levels of productivity, which is being appreciated upstream in retail supply chains.