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How can Solar Industry Learn from Retail's Supply Chain Strategies?

By CIOReview | Thursday, June 6, 2019

FREMONT, CA: In the world of the retail industry, a highly efficient supply chain marks the difference between success and failure. The same is valid for the solar sector too, but it’s essential to know the prerequisites of building such a balanced supply chain ecosystem.

Examples from the Retail Industry

7-Eleven, one of the most dominant chains in the retailing industry, operates in more than 58,000 locations worldwide. Each store provides around 2,500 products and services. Only a few of these stores have warehouses for inventory stockings. Instead, they maintain their stocks through a complex yet effective supply chain.

Walmart maintains a short supply chain by buying directly from manufacturers, if appropriate. It delves upon the suppliers who can meet the quantity, price, and frequency needs. Operating with a shared communication network and purchasing at large quantities allows them to leverage the market and move items directly from manufacturers to warehouses.

Navigating through Complexity

The above two examples imply that a cooperative network holds the key to future supply chain mechanisms. The manufacturers at various levels of production chain must cooperate with their customers. Though the process seems complex, it has significant rewards for those willing to navigate the complexity. According to a survey by Accenture, collaboration with suppliers can account for 50 percent time savings and 30 percent cost savings.

As the solar industry is gaining momentum, market leaders in the industry can improve their costs (manufacturing, raw materials, and logistics) by improving their supply chain. For instance, Silicon Module Super League (SMSL) accounts for 50 percent of the solar panel shipments globally. Enhancing their supply chain capabilities will not only reduce the end price but also encourage a competitive market for the industry.

Careful Selection of Partner

Chasing any supplier who is ready to offer a lower bid is short-term thinking. Long-term factors like warranty, performance, capacity to grow, and long-term investment in research and development are the real signs. Building a great relationship takes time, but it is worth the effort. A careful selection of partner with similar standards and values guarantees a high-quality and cost-effective operation in the modern, competitive market.

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