Today’s consumers expect easy shopping, fast fulfillment, and a wide product selection, putting pressure on retailers to operate across multiple channels, work with diverse suppliers, and manage orders efficiently amidst demand fluctuations and supply chain disruptions. So, what are retailers to do if a major port they rely on closes unexpectedly and creates logistical nightmares for importing and exporting goods? The Port of Baltimore’s closure serves as a reminder that the global supply chain must be fortified and ready when things go awry.

“The State of Retail Supply Chains & Sourcing Strategies in 2024” report shows that 70% of respondents admit to using manual processes to manage disruptions and risks, highlighting the urgency for automation and resilience-building measures. During the COVID-19 pandemic, companies learned some hard lessons about supply chain vulnerability. The delivery of items like washing machines and couches was delayed by several months after the pandemic led to production, shipment and demand fluctuations. Subsequently, the home industry was able to develop a variety of manufacturing relationships which resulted in increased nearshore manufacturing in places such as Mexico and Brazil. While strides were made there is still room for improvement. 

As companies continue to strategize and adapt to future disruptions, it’s critical for them to employ innovative logistics solutions, foster collaborative ecosystems, and leverage technological advancements that can help navigate the complexities of global supply chains with confidence and precision. Here are three ways companies can ensure they are prepared for the next supply chain disruption while gaining a competitive advantage.  

Let Go of ‘This is How We’ve Always Done It’

Leading retailers are investing in technology that provides them with quick and precise data. They understand disruptions will happen and consumer behaviors will shift, so adapting to these changes is the only way forward.  Technology solutions like Electronic Data Interchange (EDI) and Vendor Managed Inventory (VMI) can help retailers regain control of their supply chain and scale their businesses in real time.

EDI technology allows organizations to seamlessly exchange important documents and transaction data, eliminating the need to manually input data into spreadsheets. EDI workflows can accelerate the order-to-cash cycle, reduce errors and prevent chargebacks. They also enable better supply chain visibility to keep your business agile.

VMI provides management tools that enable trading partners to easily share inventory data, creating a demand-driven supply chain. With VMI, organizations can accelerate order forecasting, optimize shipments, and improve inventory levels without causing the bullwhip effect.

Both EDI and VMI technology contribute to minimizing supply chain disruptions by improving communication, visibility, and responsiveness throughout the supply chain network. They enable businesses to anticipate, identify, and react to disruptions more effectively, thereby enhancing overall supply chain resilience and continuity.

Embrace Nearshoring and Drop Shipping

Reshoring and nearshoring strategies are becoming more popular as effective methods to address supply chain risks linked with geopolitical tensions, global health crises and unforeseen port closures. By relocating production closer to end markets, companies can gain better control over their supply chains, cut transportation expenses, and reduce environmental impact. These tactics improve visibility within the supply chain and align with broader industry goals of sustainability and social responsibility. As businesses transition toward more localized and responsive supply chains, the importance of establishing strong supplier networks and fostering regional partnerships grows increasingly evident.

Drop shipping is a supply chain model and fulfillment strategy where a business does not own and store the products it sells and instead, its dropship suppliers pick and deliver stock directly to the consumer on the business’s behalf. This allows for increased flexibility and scalability within their supply chain. As vendors expand their reach by opening multiple distribution centers across the globe, retailers must determine the nearest ship point to each customer. To thrive in this demanding marketplace, retailers must invest in software solutions that streamline the drop shipping process.

Where’s My Item?

Inventory visibility is one of the biggest challenges among home goods retailers and suppliers. The ability to track inventory in real-time is crucial to ensuring they have the correct information to inform the customer when their item will arrive. The key to having full inventory visibility is to leverage a supply chain network that connects all stakeholders. This not only provides control over data but also allows data to be shared with supply chain partners and customers. Achieving the right inventory balance requires advanced tracking systems and predictive tools to gauge demand accurately. By analyzing data, distributors can anticipate market shifts, ensuring optimal inventory levels and avoiding shortages or excess stock. Integrating inventory management software with existing business systems enhances visibility, simplifies restocking procedures, and minimizes instances of inventory depletion.

The Path to an Efficient Supply Chain is Within Reach 

Technology, agility, communication, transparency, and collaboration all play a vital role in navigating the complexities of global supply chain operations to ensure long-term success and shape the future of retail. Essential tools like EDI and drop ship solutions can automate inventory management, order processing, and shipping, enabling retailers to offer a more comprehensive selection of products and meet consumer demand.

As more emphasis is placed on automating and fortifying the supply chain, disruptions like the Port of Baltimore’s closure will have less of an impact. Retailers and suppliers can instantly and efficiently communicate about everything within the global supply chain operation, emerging stronger and more resilient.

About the author

Seth Weisblatt is the Director of TrueCommerce Home, the home vertical within TrueCommerce which provides digital integration solutions to key suppliers. With over 20 years of experience in the home furnishings industry, he owned and operated a successful retail store in Fort Worth, Texas, transforming and modernizing the “mom-and-pop” retailer into a regional powerhouse. Seth also led the home furnishing division for a national buying group, consulting with hundreds of furniture brands and retailers. Additionally, he served as the VP of Digital Marketing for the world’s largest furniture manufacturer, Ashley Furniture. When he’s not telling dad jokes or driving the oversized dad-bus (SUV), Seth is likely in the kitchen putting together an over-the-top meal or on the road, enjoying the chance to create new memories and chasing sunsets.