Supply chain optimization in the retail industry

The speed of retail is accelerating while customer demands evolve. An astonishing 74 percent of consumers say they're more likely to purchase again from a company after receiving same-day delivery. In the store, if a product isn't on the shelf, a customer can order from another retailer on their mobile phone.

Supply chain optimization is necessary for retailers to meet and exceed your customer expectations. In optimization, you gain visibility into the operational bottlenecks that exist between procurement, logistics, and delivery.

Business outcomes of supply chain optimization

Supply chain optimization hinges on the creation of a modernized data environment that collects information from siloed sources, creates a single source of truth, and bridges the gap between systems to provide a complete picture. You can use this visibility for the following activities:

  • Improve demand forecasting: Real-time analytics enables retailers to optimize labor and logistics and effectively forecast demand.

  • Drive operational changes and efficiencies: A unified view of the business allows you to optimize existing processes. You can turn operational data into actionable insights through data, analytics, and AI.

  • Reduce costs and improve customer experience: Analyzing supply chain data with analytics helps you put the right products in the hands of customers. Providing products to customers when they want them reduces unnecessary inventory.

  • Increase safety and security of goods and shipments: A modernized data environment optimizes logistics. It reduces loss by tracking assets over the entire supply chain.

Top supply chain optimization challenges

Retail organizations can have disconnected business processes and data silos. This situation makes it difficult to make decisions quickly, confidently, and accurately. Three key challenges stand out for supply chain optimization:

  • Retailers lack the infrastructure to improve inventory management and cost savings.
  • Retailers have limited visibility into key data and little digital feedback, which creates a lack of agility and responsiveness.
  • Retailers lack ability to discover and identify patterns in their supply chain experience.

These challenges are significant. It's possible to overcome them with the right technology solutions.

How Microsoft helps optimize the supply chain

Microsoft Azure offers best-in-class analytics and IoT services. These offerings enable you to create a single data source and gain supply chain visibility by connecting data silos.

Our approach layers real-time IoT insights on a unified view of retail data.

  • Collect and ingest data: Use Azure IoT Hub and Azure Event Hubs to collect and ingest data from the following sources:

    • Point-of-sale transactions
    • Online and mobile purchases
    • Social media
    • Devices and IoT sensors
    • Supply chain or warehouse operations
  • Eliminate data silos: Store data using Azure Data Lake Storage and Azure Cosmos DB. This approach removes data silos, which ensures that data is secure and available. This approach also enables scalability.

  • Conduct complex data analysis: Use Azure Synapse Analytics to unify analytics across systems. Do complex queries on operational and transactional factory data rapidly.

  • Visualize analytics outputs: Integrate with Power BI to increase operational efficiencies, reduce costs, and optimize performance. You can visualize analytics outputs, such as the following information:

    • Contract cycle optimization
    • Available-to-promise
    • Price elasticity analysis
    • Route planning and scheduling
    • Demand forecasting

Supply chain optimization success story

Learn how Anheuser-Busch InBev brewed up business solutions with Microsoft Azure.

Next steps

To learn more about another strategic driver for retail customers, see Building management optimization.

The following articles can guide your cloud adoption journey and help you succeed in the cloud adoption scenario for the retail industry.