Supply chain disruption continues to be a challenge for retailers across the globe. It’s the product of multiple factors, including economic downturn, geopolitical tensions, natural disasters, logistics complications, and inventory-related challenges.

Nevertheless, there are some proactive measures that retailers can take to mitigate risk, in the form of “smart” packaging tools that boost inventory visibility, and make possible informed decisions about production, procurement, and predictions.

To ensure a more efficient supply chain, retailers first need to streamline inventory management. Outdated or inaccurate data can lead to poor demand forecasting, resulting in stock bloat and shortages. To keep that from happening, retailers need to acquire real-time visibility into inventory.

Smart packaging is equipped with identification technologies such as radio frequency identification (RFID) tags, sensors and QR codes, allowing for the tracking of individual items in real time as they move through the supply chain. Retailers can monitor inventory at all stages and identify potential bottlenecks or delays. With improved visibility, they can make demand forecasting more effective, resulting in better operating margins.

Another key factor that impacts order fulfillment and supply chain efficiency is shrinkage. Smart packaging equipped with RFID technology can boost traceability at the item level, allowing retailers to mitigate shrink while maintaining supply chain continuity.

With the growth of “conscious consumerism” comes an increase in demand for sustainable products, packaging and practices. According to a report by Capgemini Research Institute, 66% of customers choose to purchase products or services based on their “environmental friendliness.” To avoid the risk of supply chain disruption resulting from a decrease in demand, retailers must align their operations and products with sustainability requirements. One effective approach is to adopt sustainable packaging.

Sustainable materials that are recyclable or biodegradable are crucial to thriving in today’s retail landscape. Additionally, by streamlining inventory, smart packaging significantly reduces unnecessary production, transportation and storage. In the process, retailers can minimize waste, reduce their carbon footprint and boost customer satisfaction. Nearly 80% of executives point to an increase in customer loyalty as a key benefit from sustainability initiatives, and 63% of organizations say that sustainability helps boost revenues.

By automating supply chain operations, retailers can eliminate friction and seamlessly match supply with demand. They can automatically receive and deliver appropriate products at the right time, reducing the risk of supply chain disruption.

Smart packaging aids in supply chain automation. It generates real-time information about inventory levels, allowing retailers to set specific thresholds for triggering replenishment. They can eliminate manual verification and line-of-sight processing while automating inventory tracking and shipment verification.

The retail industry operates on razor-thin margins, and supply chain disruptions can be a serious drag on profits. Retailers that are able to streamline their supply chains can ensure seamless operations, reduced carbon footprint, and business continuity.

Gary Moskovciak is vice president of global sales management at SML Group.