Supermarket franchises are challenging to run, grow, and succeed in. In supply chain issues, we face material and labour shortages, port congestion, high return rates, and transportation and logistic constraints.
Supply chain management strategies help supermarket franchises reduce costs, increase efficiency and improve customer experience. In this article, we will discuss common supply chain issues, their impact, and strategies for solving them.
An Overview Of the Supply Chain in Supermarket Franchises
The supply chain in supermarket franchises is a chain that includes various resources and activities necessary to produce products. In the supply chain, the suppliers, producers, distributors, retailers, and customers are the key players.
Suppliers provide the necessary materials for production, producers manufacture the products, distributors deliver the products to the consumers, retailers sell the products to the customers and customers buy the products.
Common Supply Chain Issues for Supermarket Franchises:
Supermarket Franchises face many types of supply chain issues that lead to a decrease in both the sales of products and customers. This is the reason why more than 50% of supermarket franchises fail to operate in the market for 5 years or more.
The common supply chain issues faced by supermarket franchises are given below-
- Supplier Delays: If suppliers delay in delivering the products to the stores, then it affects the sales of the supermarket franchise.
- Inventory Shortages: It is important to manage inventory storage at the right time. Failure to do so can lead to a decrease in product stock.
- Logistics Challenges: Logistics challenges such as problems in transportation and distribution do not make the products available to the customers on time. This leads to a decrease in customers.
- Demand Forecasting Errors: It is important to forecast the demand for products in the supermarket franchise business. Sales decrease due to more or less stock as per the demand.
- Seasonal Fluctuations: It is natural for the demand of a product to increase or decrease in the market due to seasonal fluctuations. This affects the market. Therefore, if this demand is not taken care of, the stock falls short.
- Regulatory Issues: Changes in government rules have a great impact on businesses. Many times your costs increase due to regulatory issues in supermarkets. Due to this, you are not able to earn much profit. Due to this, your business can also go into loss.
Impact of Supply Chain Disruptions on Supermarket Franchises:
Supply Chain disruptions have a profound impact on supermarket franchises. This leads to customer dissatisfaction, business failure, and a decrease in sales. We can see its impact as follows-
- Lost Revenue: It is necessary for products to be available on time at all stores. If products are not available in stores on time, then sales decrease. Due to this, the supermarket franchise has to face lost revenue.
- Reduced Customer Loyalty: Due to the non-availability of products in the franchise as per demand, customers are disappointed again and again. Due to dissatisfaction, they buy the same products from other stores. This reduces customer loyalty in your supermarket franchise.
- Increased Operational Costs: The owner spends extra to solve the issues coming in the supermarket franchise. This increases the operational cost.
- Brand Reputation Damage: Many times the products are not available in the supermarket franchise as per the market demand. If this happens repeatedly, customers start shopping from other stores. This damages the brand reputation.
Strategies for Solving Supply Chain Problems:
You have to face several problems while solving Supply chain problems. Using the right supply chain management, you can grow your business as well as achieve success in it. The following are the effective and appropriate strategies for this-
- Diversify Your Supplier Base: We can solve supply chain problems by reducing the delay in the supply chain. For this, take products from other suppliers and supply them to other stores. This maintains the availability of products in the market.
- Implement Inventory Management Software: Availability of products in your franchise is important to retain customers. Take the help of inventory management software to track this. With this, you can monitor the stock and prevent inventory shortages.
- Enhance Demand Forecasting: Enhancing demand forecasting is essential to grow a supermarket franchise. For this, collect information by estimating based on past data and market demand. Accordingly, maintain the availability of products in your franchise.
- Build Strong Supplier Relationships: In the supermarket franchise business, you have to build strong relationships with other suppliers. This brings stability to your supply chain and also reduces the problems in the franchise business.
- Invest in Transportation and Logistics Solutions: Transportation and logistics solutions are very important in the supermarket franchise business. Improve it and deliver your products to the stores on time so that its availability becomes easy for the customers. This increases the loyalty of your customers towards your brand. This also increases the sales of your products.
- Utilize Local Sourcing: Local sourcing is required to grow the supermarket franchise business on a large scale. By making the products available locally, customers quickly become aware of your products. This saves both your time and cost.
- Establish Contingency Plans: Every company or franchise business should be prepared in advance for emergency situations and make proper plans. By preparing contingency plans, you can overcome the obstacles coming into your supply chain.
How 7Heven Overcame Supply Chain Issues?
7Heven is one of the most profitable supermarket franchises in India. It has managed its supply chain with the help of many special strategies. The main methods of its effectiveness are as follows-
- It has adopted advanced technology to track and manage proper information and data of the products.
- It has ensured the availability of products in all stores locally in collaboration with local suppliers. This strengthened their relationship with the customer over time.
- It created a Resilient Supply Chain, which made it easier to face potential obstacles. Potential problems can be avoided by using different supply sources.
Conclusion:
Proactive supply chain management is necessary to grow the supermarket franchise business on a large scale and make it successful. Competitive market Adopt technology and use technological solutions to build your brand identity.
Take the help of local sourcing to build a strong relationship with customers and provide products as per demand. By bringing flexibility into the supply chain, you can strengthen your business capability.
FAQs:
Q1. What are the top challenges in supply chain management for supermarket franchises?
- The top challenges in supply chain management for supermarket franchises are inventory management, lack of supply chain visibility, restructuring, complex demand forecasting, seasonal fluctuations, etc.
Q2. How can I improve supplier relationships in my supermarket franchise?
- In your supermarket franchise, you can improve supplier relationships by treating them like partners, understanding their needs, maintaining regular communication, and rewarding good service with loyalty.
Q3. What technology should supermarkets invest in to improve supply chain efficiency?
- Technologies like data analytics, machine learning, the Internet of things, blockchain, generative artificial intelligence, automation, etc. should be invested in to improve supply chain efficiency.
Q4. How can local sourcing benefit a supermarket’s supply chain?
- Local sourcing helps to reduce the cost and risk of damaged products, provides faster delivery times, and improves flexibility and customer service to the supermarket’s supply chain.