A supermarket supply chain is the management of the flow of goods such as food and drink from origin to consumption. It’s a process required by supermarkets and local and online grocery stores alike. A range of activities is required to plan, control and execute product flow. It starts from acquiring raw materials to production to distribution. Optimally, this process is streamlined and implemented using the most cost-effective methods possible.
There are several channels to go through in the supply chain process. And traditionally, supermarket and grocery store margins are low. Therefore, these businesses generally want to make their supply chain process as efficient as possible.
In this article, we’re going to cover the supermarket supply chain. We’ll discuss how it works, detail the process and talk about how supermarkets and grocery stores both online and physical can optimize the process for a more efficient and more profitable business.
For more on overcoming common challenges, check out our article on everyday online grocery business challenges and solutions.
How supermarket supply chains work
The supply chain of a supermarket is a process which manages all aspects to meet customers and business goals. Supply chains are suppliers, manufacturers, warehouses, distributors and retailers. Together they form the process responsible for delivering products and services from their respective points of origin to the end user. Networks of supply chain management must be able to respond quickly and efficiently to changing demands.
Typically, a supermarket supply chain runs in the order below:
- Products are sourced and sent from the factory (point of origin).
- Products are sent and stored in the supermarket or grocery store, ready to be sold.
- Products are available for sale to the customer (end-user).
Supply chain managers must consider the many factors involved when making decisions about their supermarket supply chain. They need to be aware of:
- What types of products do their customers want?
- Which suppliers offer the best quality and prices?
- How much storage space do they have?
Effective supply chain management also considers costs associated with each product, effects on business and staff requirements and its impact on customers.
How to optimize a supermarket supply chain
Optimizing the supply chain of a supermarket or grocery store will help make them more competitive, streamlined and profitable. With a better-optimized supply chain, businesses can more effectively meet customer needs.
Below are four steps and strategies to optimize your supermarket supply chain.
1. Use high-quality software to track inventory levels
Maintaining stock levels so that you can always provide for your customers is vital to any supermarket or grocery store business. Thankfully, innovative software and platforms such as Wave Grocery’s picker app are available to help you effectively track and manage your inventory.
Using specialized software or an ecommerce grocery platform to help you manage your inventory comes with a wealth of benefits. Not only can it eliminate the need for humans to count stock but it can also provide you with useful insights and projections. These insights can include past sales trends, best price changes and more. Consequently, it can help make your life easier and bank more profit by telling you the best times to reorder and sell particular products.
2. Integrate the supply chain
Using today’s technology, businesses can better integrate their supply chain process. In practice, this means bringing together all the steps in the chain into one intelligent, manageable system.
Traditionally, the many steps involved, which we’ve already covered, can be difficult to manage. Each step takes place in a different location at different times. This can make it difficult to track. However, integrating your entire supply chain using the right software enables you to view, track and manage your supply chain process so that you know what’s going on and where you are down the line. Moreover, it means that you can find and fix issues that may arise.
3. Prioritize collaboration between your teams
A smooth and successful supermarket supply chain requires strong collaboration. More specifically, your teams at each touchpoint along the supply chain journey must work together to ensure the right products are constantly stocked, shipped and delivered.
Your marketing strategy helps you dictate what products sell, but your supply chain keeps products stocked so they can be sold. It’s a good practice to get your marketing and suppliers to work as closely together as possible to determine which products sell best throughout the year. That way you can keep the right products stocked at the right times, avoid missing high sales points and not waste money on unnecessary stock.
4. Use a tagging solution to monitor product movement
Supermarket supply chains are dynamic and complex. There are many steps with many moving parts. Therefore, management is as important as it is tricky. Thankfully, technology exists to monitor product movements through the supply chain.
Using professional-grade tagging software allows you to ensure product safety and quality. It allows you to track your products from supplier to store to shelf. Consequently, this improves visibility through each stage of the supply chain and helps your business keep on top of stock it can respond quickly and effectively to rising and falling stock levels.
Conclusion
In an increasingly competitive market, optimizing the supply chain and using best practices is necessary for grocery stores and supermarkets to compete. There’s no denying that technology is playing an ever-larger role in how stores operate. With tools and features built specifically for supermarkets, Wave Grocery is a great example of a dedicated ecommerce grocery platform that optimizes each stage of the supply chain.
Following the steps we’ve outlined in this article and implementing the right technology will optimize your online grocery store and maximize your chances of ecommerce success.
