Performance pressures on supply chains have reached unprecedented levels, but businesses can improve their operations by integrating digital tools and accessing real-time data, writes Ellie Williams, vice president of product management at Rithum, a provider of ecommerce, marketing, and delivery technology and services for retailers, brands and suppliers.

Supply chains are under constant pressure to be more efficient and cost-effective. Over the past four years, these pressures have reached unprecedented levels, prompting 86.2% of businesses to prioritize de-risking their operations since 2023, according to Deloitte. Companies are now restructuring and rebuilding their supply chains to optimize the balance between performance and cost. At the same time, they are moving closer to the end consumer to better meet their evolving needs.

As consumer expectations rise and profit margins tighten, the ability to make data-driven decisions becomes crucial for businesses aiming to enhance efficiency, agility and profitability. According to McKinsey and Co., 45% of supply chain leaders reported a lack of visibility into their upstream supply chain. By integrating the right digital tools that leverage real-time data, businesses can improve their supply chain operations.

Here are three ways data-driven insights can transform supply chain operations and contribute to a more profitable bottom line.

As more and more retailers use third-party commerce business models like drop-shipping and marketplaces, they are also working with third-party logistics (3PL) providers to handle logistics services, including warehousing, picking, packing and shipping to support those initiatives. These business models allow retailers to be nimble and scale operations without the need to invest heavily in their own infrastructure.

So, where does data play its role? Partnering with unified commerce platforms and 3PLs gives retailers more access to data, enabling them to optimize inventory levels, supplier performance and resource allocation, and understand customer demand patterns.

Technology that integrates with marketplaces allows retailers to work with various fulfillment sources in one place, which can significantly streamline this data. When managing orders from different suppliers, a centralized system allows businesses to maintain a clear overview of all orders. This transparency helps coordinate delivery statuses, tracking numbers and dates, which builds consumer trust through reliable information. Additionally, the flexibility to customize workflows and integrate with multiple shipping partners enables businesses to adapt quickly to changing customer demands. With the wealth of drop-shipping and 3P fulfillment data in one place, companies can shop the best rates, cut costs and ensure timely deliveries, which is critical for maintaining customer satisfaction.

With the explosion of multiple marketplaces, supply chain management is no longer as simple as stocking shelves. Thankfully, AI's emergence has empowered retailers to navigate the complex realities of balancing large inventories with tight profit margins. These AI-driven tools provide more accurate inventory management and product information and speed up the onboarding process for new products or suppliers.

For instance, predictive models trained on extensive shipping data can forecast warehouse processing times and identify the best fulfillment locations. This capability is crucial for making accurate delivery promises. In fact, 47% of consumers may stop purchasing from a retailer if a promised delivery date is missed by two or more days, according to the 2023 Online Consumer Behavior Global Report by Rithum and research firm Dynata. To provide reliable delivery date promises, retailers must understand transit time.

AI also supports omnichannel strategies like Buy Online, Pick Up In-Store (BOPIS), allowing retailers to offer a broader range of products by tapping into third-party inventories. By integrating 3P inventory, retailers can offer an expanded assortment without holding excess stock, resulting in optimized resources and reduced risk.

Efficient delivery management is key to reducing shipping costs and improving delivery density. Data-driven insights enable companies to refine delivery routes, ensuring products are delivered in the most cost-effective and timely manner. Doing so can result in substantial cost savings and better service for customers.

A clever strategy to consider is using remote pickup locations for order fulfillment, such as warehouses in areas without nearby stores. Take Ikea, for example. The company's strategy involves using remote pickup locations across the U.S. where stores aren't present. Customers can still order their favorite products online and pick them up directly from the warehouse when ready. This setup slashes shipping costs and offers customers a convenient alternative to home delivery, demonstrating how smart logistics planning can benefit everyone.

A comprehensive ecommerce platform supporting a wide network of brands and retailers can further streamline these efforts. With features like end-to-end monitoring and real-time alerts, businesses can uphold high delivery performance standards. Tools that compare shipping rates across carriers and methods can help businesses select the most cost-effective options. Companies can strategically manage delivery density by considering factors like warehouse locations, historical data, and current logistics trends, potentially saving significant amounts on overall expenses.

Retailers and brands have access to an abundance of data. The real value lies in leveraging that data effectively. With the right strategy and tools, retailers and brands can enhance efficiency, improve customer experiences, and protect their bottom line.

Ellie Williams is the vice president of product management at Rithum, a provider of ecommerce, marketing and fulfillment and delivery technology and services for a network of over 40,000 retailers, brands and suppliers. Rithum was formerly known as CommereHub.