Navigating supply chain conundrums

Retailers around the world are under tremendous pressure due to supply chain constraints. The importance of efficient supply chain management can’t be stressed enough especially when businesses are to operate in a world faced with geopolitical issues, rising costs, bottlenecks due to shipping congestion, global shortages. Many retailers have resorted to measures such as turning to experienced logistics operators, hiring the best chief supply chain officers and so on to mitigate the risks. Some steps that have proven to be useful in reducing the troubles include integrating retail systems, accounting for reverse logistics and increasing accuracy of forecasting.

Majid Al Futtaim have been making strides in implementing advanced technologies within their supply chain to improve efficiency, exploring innovative fulfilment solutions, opting for local-for-local sourcing options when feasible and adopting a responsible procurement policy in line with its ESG commitments.

Jean Luc Graziato, Chief Commercial Officer, Majid Al Futtaim – Retail discusses logistics and supply chain in an exclusive interview with RetailME.

What are the key measures Majid Al Futtaim Retail is undertaking to tackle the supply chain and logistics challenges post-Covid?

Jean Luc Graziato: Since the arrival of the pandemic, food security has been one of the more challenging aspects of grocery retail, not only in the UAE but worldwide. Although the global situation is adapting, the immediate outlook remains chaotic. Here at Majid Al Futtaim, we continuously seek new and innovative ways to manage the logistics and supply chain challenges we face and double down on our dedication to cost control to ensure that rising prices are not passed on to our customers. We do this by sourcing for multiple countries, mainly within the GCC, in our negotiations and direct farm sourcing from one country’s operations to another. We also stock up on non-perishable and long-life products wherever possible, allowing our team to anticipate and mitigate critical inflation-related business pressures. While there is no ‘one-size-fits-all’ solution for grocery retailers as we emerge from the pandemic, we remain dedicated as a business to identifying areas for improvement while testing new solutions to try our best to maintain robust supply chains and continue offering value to Majid Al Futtaim customers.

Given the increasing rates of inflation, how can you ensure cost-efficiency while not passing on the prices to the consumers?

Jean Luc Graziato: We work closely with our local partners and global suppliers to understand the reasons behind any price increase, searching for solutions to tackle this and protect the purchasing power of our customers where we can. By taking this approach, we will continue to provide customers with the discounts and promotions that Carrefour is known for, allowing customers to access the goods they want at a reasonable price. To further ease the burden of inflation, we launched our lowest price guarantee campaign, which offers customers the chance for a full refund in SHARE points if selected products can be found cheaper at a different retailer. The initiative includes 500+ essential items across the UAE, and our end goal is to provide access to an unrivalled choice of quality products at an unbeatable value for the 750,000 customers Carrefour serves daily.

What are the key supply chain concerns for retailers in the region? What are the key trends in supply chain likely to disrupt the market?

Jean Luc Graziato: In the not-too-distant past, supply chains were much more predictable than we experience today. Pre-pandemic grocery retailers could rely on suppliers to fulfil orders accurately and quickly. However, securing goods, especially fresh produce, became a challenge during the pandemic, the legacy of which continues to present obstacles today. The ongoing geopolitical situations in other regions and other market forces have also exacerbated the problem by adding rising inflation. For example, there are no guarantees that deliveries will arrive on time or with the correct supply volume. This reality can lead to price fluctuations because there is an oversupply in some months and in others, an undersupply. Planning therefore has become a real challenge and a critical supply chain concern for regional retailers. Key trends likely to disrupt the market further depend upon each retailer’s ability to navigate and negotiate the procurement and supply chain stresses that we see continuing in 2022 and as we look ahead. Success in this regard will require a diverse and creative approach to securing goods and predicting and delivering on consumers’ needs.

Read the full article in the October edition of RetailME to know more about emerging technologies that will improve supply chain efficiencies and drive sustainable sourcing.