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    Blog Image

    How Managed Services Supercharge Retail Supply Chains

    • Managed services can drive cost savings, improve efficiency and provide a competitive edge for retailers.
    • Teaming with a managed services provider helps retailers address talent shortages and keep up with the rapidly evolving AI technologies transforming procurement and supply chain.
    • By partnering with the right firm, companies can turn supply chain from a cost center to a strategic value driver.

    February 13, 2025 | Procurement Strategy

    In the retail world, it's a constant battle to stay ahead of the curve. Supply chains are more complex than ever, global disruptions (tariffs, anyone?) are becoming the new normal and consumer demands change at lightning speed. 

    Case in point: more than two thirds of online retailers have seen consumer satisfaction decline in the last year, according to the recently released American Customer Satisfaction Index. 

    If you’re spending more time reacting than strategizing, it might be time to consider a game-changer: retail managed services.

    What Exactly Are Retail Managed Services?

    Think of managed services as a strategic partnership with experts who become an extension of your own team, working collaboratively to improve your procurement and supply chain operations. This can cover a wide range of areas, from spend analytics and category management to supplier relationship management and logistics. It's like having a dedicated crew for your supply chain, fine-tuning every aspect to maximize performance.

    Why Should Procurement and Supply Chain Care? 

    So, why should you, as a seasoned procurement and supply chain professional, care about managed services? Let's talk about the real, tangible wins that can make a difference to your bottom line:

    1. Cost Optimization

    Managed services can help you achieve significant cost savings through process improvements, better negotiation with suppliers and smart technology implementation. Think about it: better data, better decisions, better deals.

    2. Focus on Core Competencies

    You and your team have strategic initiatives to pursue, innovative ideas to explore. Offloading non-core tasks to a managed services provider frees you up to concentrate on driving value for your business.

    3. Access to Expertise

    Managed services give you access to specialized skills and knowledge in areas like data analytics, risk management and global sourcing. It's like having a team of all-stars on your bench, ready to jump in and make a difference.

    4. Improved Visibility and Control

    To manage complex supply chains, visibility is key. Managed services can provide you with real-time insights into your supply chain performance, allowing you to identify bottlenecks, anticipate disruptions and make informed decisions.

    5. Enhanced Agility and Resilience

    Consumer preferences change on a dime, and global events can throw your supply chain into chaos. Managed services can help you build a more agile and resilient supply chain, enabling you to respond quickly to changing market conditions and mitigate disruptions.

    6. Bridging the Talent Gap

    Finding and retaining top talent in procurement and supply chain is a major challenge. Managed services can help you bridge that gap, providing you with access to experienced professionals without the headaches of recruitment and retention.

    The Future of Retail Managed Services: AI and Beyond  

    AI-powered tools are ushering in a fundamental shift in how enterprises approach procurement and supply chain management. Let's delve into some specific use cases, illustrating how AI tools are already transforming managed services for retailers:

    • Demand Forecasting and Planning

    Imagine a system that can analyze historical sales data, seasonal trends, social media sentiment and even weather patterns to predict future demand with unprecedented accuracy. AI-powered forecasting tools within managed services providers can do all that, allowing retailers to optimize inventory levels, minimize stockouts and avoid costly markdowns.

    • Supplier Relationship Management

    AI’s ability to analyze vast amounts of data, such as supplier performance, market trends or risk factors, to identify the best suppliers and negotiate the most favorable contracts. Managed services can provide retailers with a clear picture of supplier capabilities, enabling them to build stronger, more strategic relationships.

    • Logistics Optimization

    Getting products from point A to point B efficiently and cost-effectively is a constant challenge for retailers. AI-powered logistics tools can optimize routes, predict potential delays, and even automate warehouse operations. Managed services incorporating these tools can help retailers reduce transportation costs, improve delivery times, and enhance overall supply chain visibility.

    • Personalized Customer Experiences

    AI’s value isn’t just limited to back-end operations; it can also enhance customer experience. Managed services providers can leverage AI to personalize product recommendations, offer targeted promotions and even provide proactive customer service. This level of personalization can drive sales, build loyalty and create a truly differentiated brand experience.

    • Risk Management

    Global supply chains are inherently complex and vulnerable to disruptions. AI can analyze a multitude of factors to identify potential risks and develop mitigation strategies. Incorporating AI-driven risk management can help retailers build more resilient supply chains and minimize the impact of unforeseen events.

    • Automated Procurement

    Repetitive tasks, such as purchase order processing, can be automated using AI. This frees up procurement professionals to focus on more strategic activities, such as supplier negotiation and category management. Managed services with AI-driven automation can significantly improve efficiency and reduce costs.

    • Quality Control

    AI-powered image recognition and machine learning can automate quality control processes, identifying defects and inconsistencies with greater accuracy and speed than traditional methods. This is particularly valuable in industries like fashion and food retail, where product quality is paramount. Managed services can leverage these tools to ensure consistent product quality and minimize returns.

    As AI technology continues to evolve, retailers can expect even more innovative applications to emerge, further enhancing the efficiency, agility and resilience of retail supply chains. Working with the right managed services provider who is leveraging these new tools can give your enterprise a competitive advantage.

    Embracing the Change

    Managed services are strategically necessary for retailers looking to thrive in today's dynamic environment. By partnering with the right provider, enterprises can unlock significant cost savings, improve efficiency, enhance agility and gain a competitive edge. 

    Contact GEP today to learn more about our managed services solutions and how we can help you achieve your business goals.

     

    Tags: Procurement Strategy , Procurement Outsourcing

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