For these reasons, retailers are planning significant investments in their supply chains during 2021. According to a new Deloitte study, eight in 10 retailers expect moderate to major supply chain investment this year, with a particular focus on digitization. Warehouse management and procurement will also receive attention, as will the possibility of reshoring some supplier contracts to avoid the inherent risks that come with dependence on overseas suppliers.
Supply chain diversity and transparency
Perhaps the most notable changes for retailers in a post-pandemic era will be moves toward supply chain diversity and supply chain transparency. Diverse, transparent supply chains will empower retailers to avoid bottlenecks leading to stockouts— which damage customer loyalty — and allow them to react in real time to shifts in customer demands. Winning that last mile in the supply chain will go a long way to restore customer confidence in retailers following the supply challenges of the pandemic.
According to Deloitte, achieving this kind of transparency into what inventory a retailer has, in what locations, and where it is coming from (supply chain) is greatly assisted by digital technology that can integrate data from across the supply chain into a single view. Per the report: “Ultimately, the ideal inventory system is integrated end-to-end from production to last-mile delivery.”
Contract lifecycle management is critical
This kind of end-to-end integration is not possible without the critical business information contained in contracts. Contracts define every link in a supply chain, and, therefore, digitally transforming the creation and post-execution management of these documents should be a central component of any supply chain investment strategy.
Advanced CLM software acts as the critical system of intelligence for whom a retailer is doing business with and on what terms. When this information is connected to operational systems like point-of-sale and ERP, retailers gain unprecedented visibility into all their commercial relationships and can monitor in real time how these relationships are performing. And AI technology means that all this data can be analyzed at scale so retailers can respond dynamically and immediately to whatever challenges or opportunities arise.
This kind of contract intelligence can generate high-impact insights that help retailers overcome the key supply chain challenges highlighted by Deloitte. Supply chain warning signs—such as a supplier missing contractually obligated timelines or volumes—can be detected early and addressed before they become an issue. New suppliers can be quickly identified and onboarded into the supply chain through seamless, cloud-based collaboration and inbuilt risk assessments. And, again, AI enables retailers to actively monitor the immense amount of data that comes with these digitized processes.
2021 will be defined by those retailers who learned the lessons of 2020 and emerged the stronger for them. While supply chain disruptions like those experienced in 2020 cannot be predicted, they can be protected against with the proper diversity and transparency programs and a focus on contract lifecycle management.
Scott Mars leads Icertis’ retail organization. Scott has spent the last 17 years working in the CLM industryand has worked in roles ranging from strategy consulting,professional services, pre-sales, sales, and sales leadership.
Icertis Remains a Leader in the Q1 2021 Forrester Wave
Icertis has again been recognized as a Leader in the Forrester Wave: Contract Lifecycle Management For All Contracts Q1 2021 report. This is the second consecutive Wave report to recognize Icertis as a Leader. Read the report and learn more about the impact of CLM and why Icertis has been named a Leader.