Supply Chain Digitalization Drives the Bottom Line for Long-Term Retail Growth

QIMA is a Business Reporter client.

Businesses that digitalize their supply chains can improve quality and compliance, unlocking long-term bottom-line benefits.

The Covid-19 pandemic, which began as a public health crisis, has triggered significant changes in how global brands, retailers and importers manage their supply chains, and underscored the importance of speed, agility and efficiency. And, as a result of recent global manufacturing and transportation disruptions, the path toward effective supply chain digitalization has been accelerated.

In today’s increasingly digital marketplace, digitalization of a business’s supply chain is a distinct competitive advantage and bolsters brand reputation. Furthermore, in a constantly evolving global business climate, these businesses are able to more nimbly shift their sourcing operations between geographies so they can hedge against disaster and disruption.

Digitalization future-proofs a business by unlocking long-term growth opportunities, ensuring customer satisfaction and driving the bottom line.

Supplier disruptions left businesses in the dark

Covid-19 has challenged organizations involved in global trade to take a hard look at areas of their business that leave them most vulnerable to risk and unable to meet ever-changing consumer demand. With no roadmap to guide retailers and suppliers on how much to order or manufacture, or where to stock, the demand forecasts they typically relied on before the pandemic were shattered. Sudden lockdowns and the shift to working from home caused panic buying of essential food items and household goods, while other items lingered on the shelves of shuttered stores, unsold. And this uncertainty has continued.

Apart from missing the supply-and-demand mark, businesses with a low degree of supply chain digitalization are also twice as likely to suffer from serious product quality and supplier communication issues, according to a recent survey of 700 global businesses conducted by QIMA. When product quality issues combine with supplier delays, it’s a recipe for disaster. That is why it’s alarming that less than half (44%) of the surveyed businesses reported having a highly digitalized supply chain, and 85% admitted to blind spots within their supply chain.

Cash is still king—and quality is its close confidant

Against the backdrop of a global recession and mass uncertainty, cash flow is a boardroom centerpiece. But innovative businesses know that if cash is king, quality is among its closest confidants. Above all else, quality-control measures in the supply chain secure the bottom line by helping businesses deliver flawless products cost-effectively and on time, while bolstering the brand in the marketplace.

Notably, Covid-19 profoundly changed consumer behavior, with the rise in online shopping pressuring businesses to consider how product returns, fast shipping and reviews impact operational decisions and profit margins. Moreover, as ethical and environmental consumerism continues to rise, businesses are also prioritizing sustainable sourcing, transparency and traceability mechanisms in their supply chains.

Quality-related costs can consume 15%–20% of sales. According to Shopify, 10% of products purchased online are returned for preventable reasons, including poor quality, damage and not matching the description. In addition, 93% of customers reference online reviews before buying a product, and four out of five consumers have changed their mind about a purchase after reading negative reviews.

Global supply chains need a 360-degree view, from factory to shelves

In order to hedge against compliance and quality risks, businesses must gain a holistic view into the entire product journey—from the raw material producer to the factory, to the moment the item hits shelves or arrives at a customer’s door.

With a digital quality inspection platform like QIMAone, inspectors anywhere in the world, at any step of the manufacturing process, can upload data immediately using their mobile device, increasing speed, accuracy and convenience, and gaining up to 50% in efficiencies over manual entry. Furthermore, cloud-enabled features facilitate remote collaboration among inspectors and suppliers—a critical capability during travel restrictions and quarantines. Multilingual interfaces, live chat, in-app training content and efficient corrective action tracking help foster collective intelligence within the supply chain, ultimately improving quality and compliance.

Overall, workflow automation for inspection and auditing processes can help save time for all stakeholders of the supply chain, accelerating products to market and mitigating expensive buybacks.

Now is the time to future-proof supply chains

Perhaps the most prized feature of a digital inspection platform is that it transforms supplier relationships and encourages continuous improvement. The digitalization of quality and compliance processes allow for the collection of harmonized, reliable data that can help retailers and suppliers go from a reactive mode to a proactive, risk-based approach where they can predict and anticipate quality risk.

Thanks to real-time visibility of the factory floor, supply chain relationships are no longer solely based on a standard client-vendor contract. Instead, the mutually beneficial relationship is anchored by transparency, partnership, teamwork, cost-effectiveness and, ultimately, customer satisfaction. This level of visibility can save businesses precious margin points annually by streamlining processes, reducing human error and enabling cost-effective supplier diversification.

By reimagining supply chains as partnerships built on visibility, trust and collaboration, businesses are fortified to successfully overcome costly challenges brought by the pandemic and other unexpected disruptions.

For more information please visit QIMAone.com

_{This article originally appeared on Business Reporter. Image credits: iStock-1145419378}