As ongoing volatility and razor-thin margins force a rethink of traditional retail models, the focus seems to be shifting from expansion to precision. Whether by curating product variety, refining categories or standardizing packaging, The Great Supply Chain Simplification may be upon us.
This isn't just a theoretical shift; a growing wave of headlines suggests a definitive industry trend as numerous major brands pivot toward leaner operations. For example, Bath & Body Works recently announced a major efficiency initiative. The personal care and home fragrance store will begin rationalizing inventory and exiting select product categories such as men’s grooming. This move also serves as a direct response to customers finding the current assortment overwhelming.
Also on the SKU-slashing bandwagon are hardware megastore Lowe’s (with a 15% reduction) and discount chain Dollar General (1,000 products have been cut). Meanwhile, J.M. Smucker is shedding 25%: “This targeted action will improve velocities and deliver margin expansion as we prioritize high-velocity, margin-accretive SKUs that better serve our consumers and drive increased operational efficiencies,” says CEO Mark Smucker.
Interestingly, this drive for precision is also reshaping how the world’s largest brands organize their leadership. PepsiCo recently announced a major organizational restructure designed specifically to unify its food and beverage operations. The company is hoping to bridge the traditional gap between the sales floor and the warehouse. Plus, creating a unified selling structure suggests a move toward more integrated logistics and distribution channels.
Of course, there are other ways to simplify beyond SKUs and leadership charts. Several years ago, fragrance and skin care giant Coty Inc. set out to boost margins by stripping away fixed costs and streamlining procurement. Today, the company credits its success to a strategy that involved centralizing global planning and investing in localized distribution centers. Not only was a fragmented network transformed into a synchronized system, but heightened visibility enabled Coty to position inventory closer to local demand while cutting $700 million in costs between 2021 and 2024. To maintain this precision, the business now uses AI for hyper-granular forecasting at the individual SKU, channel and retailer levels.
Also tapping the power of AI is trendy discount brand Five Below. Recognizing inventory management as a critical business constraint, the brand turned to AI to optimize levels and address overstocking, while ensuring that each location has the right products at the right time. The company is now using proprietary algorithms to forecast sales across millions of SKUs, maximizing inventory turns and avoiding overstocks.
A streamlined path to success
As more companies strip away operational friction, the demand for leaders who can drive transformation is surging. That’s why ASCM created the Certified in Transformation for Supply Chain (CTSC) designation. This program will help you identify key opportunities, select the right frameworks and apply systems thinking to confirm concept alternatives. Plus, earning the CTSC validates your expertise in supply chain strategy and proves your ability to lead a major transformation project.
In an era defined by cutting through the noise, the best way to advance your career is simple: Start your CTSC journey today.
