Supply chain logistics Retail Logistics Improvement Opportunities This guide outlines practical ways to improve decision-making in retail logistics by refining inventory strategies, strengthening supplier collaboration, and upgrading decision support tools. It also highlights different approaches based on product types.
Overall Strategies to Improve Retail Logistics 1. Tailored Inventory Practices Use different strategies for different types of products, not just based on sales volume. Factor in shelf life, storage needs, seasonal demand, and promotion cycles. 2. Better Decision-Making Tools Use forecasting tools and data dashboards to guide purchasing and replenishment. Track short-term sales trends and customer preferences where possible. 3. Stronger Collaboration Across the Supply Chain Align forecasts and delivery plans with suppliers, distribution centers, and stores. Share updates on upcoming promotions and new product launches.
Category-Wise Logistics Strategies
New or End-of-Life Products Short Lifecycle Products
Challenges: Hard to forecast, risk of overstock or markdown Actions: • Use early sales data and team input to refine forecasts • Compare to similar past products for planning • Plan discounts or offers in advance to clear leftover stock
Promotional Items
Challenges: Sudden demand spikes, mismatch between store and DC stock, substitution effects Actions: • Plan based on expected price sensitivity rather than only past sales • Push most stock in the first wave and adjust based on performance • Inform suppliers early to prepare production and delivery • Forecast and manage declines in substitute product sales
Procurement-Led Purchases One-Time Buys
Challenges: Irregular demand, no opportunity to restock Actions: • Estimate initial order size using past experience and shelf space limits • Use a two-phase distribution plan if feasible, with an initial push and adjustment later
Capacity-Driven Products
Challenges: Warehouse or transportation constraints during peak periods Actions: • Reduce delivery frequency for slow-moving items • Consolidate low-priority items into weekly deliveries • Pre-ship high-volume products like beverages during off-peak periods
Regular Everyday Items
Challenges: Maintain high service levels while minimizing inventory and waste Actions: • Hold more stock in central warehouses instead of store backrooms • Align store replenishment with shelf space and planogram • For perishables: • Increase delivery frequency to reduce spoilage • Use cross-docking or direct store delivery to shorten lead time • Factor in seasonality and substitution trends • Use shelf-life-based inventory policies
System-Wide Actions Forecasting and Planning Use store-level trends, weather data, and events to adjust demand planning Promotion and Assortment Ensure product displays and layouts match promotional timing Tailor assortments to store size and customer preferences Technology and Tools Use barcoding or shelf sensors where feasible to improve shelf availability and reduce shrinkage Ensure systems such as ERP, warehouse management, and order tracking are well-integrated Performance Metrics to Monitor • Forecast Accuracy • Inventory Turnover • On-Shelf Availability • Promotion Impact and Waste • Warehouse and Transport Utilization • Markdown Percentages and Margin Loss
Retail logistics can be greatly improved by applying differentiated strategies to product types, ensuring better coordination with suppliers, and using structured planning tools. The goal is not just to reduce cost but also to increase service reliability, reduce waste, and stay responsive to customer needs.