U.S. retail supply chains still struggle to meet holiday demand

For the last couple of decades, retailers have worked hard to hone their supply chains so that they can meet customer demands during the holiday shopping season. But the "Supply Chain Impact" study commissioned by the consulting firm Capgemini reveals what most observers already understand: Many retailers still struggle to meet peak time demands, and that means lost sales not only immediately but in the future.

According to the survey, 83 percent of U.S. supply chain managers admit it is challenging to plan for supply chain capacity to address peak requirements or fluctuations in demand. Only 21 percent of the surveyed managers said their systems do an excellent job of providing accurate real-time insights into supply chain performance. Moreover, 80 percent of the supply chain managers who participated in the survey said they recognize that consumers' expectations for perfect, on-time delivery of their orders has increased, yet nearly one-third (31 percent) think their company's top executives are not concerned about the impact of supply chain problems during the holidays on revenue or profitability.

The "Supply Chain Impact" survey was an online poll of 1,000 consumers and 150 senior supply chain managers at retail, consumer products, and distribution companies with at least $1 billion in revenue. The survey, which was conducted for Capgemini by KRC Research, revealed:

• 89 percent of U.S. consumers said they are likely to shop with another retailer in the future if an item is delivered late;
• 73 percent would shop at a different store than originally intended if they were unable to find an item they wanted in stock, and 29 percent would not purchase the item at all; and
• 54 percent of the supply chain managers admitted that supply chain issues have had a negative impact on their company's revenue or profitability over the past few years.

Why is it so difficult to run a seamless supply chain? Eighty-six percent of respondents said it is difficult to have the right processes in place to respond to volatile demand in real time, and the vast majority said they had a hard time finding and retaining employees with the right analytical skills or functional knowledge.