- August 31, 2018
Know the Role of Sourcing Software in Retail Supply Chains
Since the overseas production of retail goods has become the norm, every retail establishment has tried as hard as possible to find the lowest cost product. This is created a race among retailers to find the lowest cost location. That race has made retail sourcing important in and of itself and has led to powerful global sourcing software solutions; in fact, one can argue sourcing is the most important element in the supply chain matrix and retail sourcing software helps manage it effectively.
As competition has increased, retailers have actively and continuously looked for less expensive production costs, which has forced them to look in geographic regions they previously ignored. Global labor force changes, however, as well as raw material prices, have forced retailers to be on a constant search, which has also led to some retailers reassessing international sourcing altogether. That has opened up a window for American manufacturing.
Increased Challenges Mean Integrated Supply Chains
Less expensive manufacturers, however, or just one part of the equation. Speed in which product can get the market as well as the fickleness of purchasers for additional challenges that every retailer has to face in a global market. The only way to effectively address this is to integrate supply chains More than ever before.
That need to integrate supply chains has led to a retailer embrace of technology. Technology has allowed retailers to collaborate, track shipments, analyze trends and make practical decisions at the ground level regarding getting products to market. Technology has also helped retailers manage risk through more powerful sourcing software.
One of the greatest risks is not knowing who your suppliers are. This created a problem for major retailers such as Primark, Kik, Benetton and The Children’s Place when in 2013 a Bangladeshi manufacturing plant roof collapsed and over 1400 workers were killed. New supply change management software allows retailers to track exactly where their products are made and to adapt their policies accordingly.
Because of the Bangladeshi tragedy as well as other manufacturing catastrophes and the evolution of supply chain software, retailers have been able to answer political pressure regarding their sourcing of products. On the ground, assessments are still needed to determine if a manufacturer lives up to the policy expectations of a retailer, but once that is established, supply chain software has helped not only weed out the bad guys, but improve the conditions for workers worldwide as manufacturers have been told to clean up the acts.
Manufacturing costs and the need for political awareness has increased the importance of supply chain global sourcing software. Today, no responsible retailer goes without at least a dedicated sourcing software if not an overall supply chain management solution.