Most retailers treat their supply chain as infrastructure, something to manage, not reinvent. That assumption works until it doesn’t, and by the time it stops working, the business has already paid for the delay. Rich McMahon, who scaled Bed Bath & Beyond from $1 billion to $12 billion across multiple brands and now advises retailers and AI companies operating in the supply chain space, has spent his career at the point where growth ambition collides with operational reality. What separates scalable retail from stalled growth, in his experience, comes down to one question most leaders ask too late: Is our supply chain built for where we are going, or just for where we have been? “The biggest mistake I tend to see is that retailers chase growth with their supply chain, still wanting yesterday’s playbook rather than thinking about how to evolve and reinvent it to be better for tomorrow,” McMahon says.
Reinvention, Not Extension
The default assumption when a retail business scales is that the supply chain simply stretches to accommodate the growth. McMahon watched that assumption create compounding problems firsthand at Bed Bath & Beyond, where the supply chain, when he arrived, was a predominantly direct store delivery model, product moving from vendors straight to stores with no distribution infrastructure in between.
“As we scaled from $1 billion to $12 billion, from a single brand to multiple brands, one of the biggest challenges was that we had to reinvent what our supply chain was,” he says. “What worked when we were growing to a billion dollars would not work when we were growing to two, five, eight, ten billion and more.” Product allocation, replenishment strategy, and network design all required fundamental redesign at each stage, not optimization of the existing model, but a wholesale rethinking of it. Multi-brand expansion makes that discipline non-negotiable.
Suppliers Are Strategic Partners, Not Vendors
McMahon’s current work on the wholesale and distribution side has sharpened a philosophy he carried through his time at Bed Bath & Beyond. The retailers who build resilient retail infrastructure treat their suppliers as strategic partners, not transactional vendors. The distinction has direct consequences for inventory performance, service levels, and carrying costs. “You can’t just keep pounding on your partners,” McMahon says. “If you’re a retailer, you can’t just keep demanding of your partners without providing them better insights, better data, better understanding of what you’re trying to accomplish with your business.”
The supply chain decisions that create long-term value, in his view, are built on joint planning, analyzing demand signals together, creating flexibility within commitments to reduce stock-outs and excess inventory, and aligning across channels so that every party in the ecosystem can move in concert. “If you have those strategic partnerships across that ecosystem, all parties can move in concert with one another and deliver better results for your ultimate customer,” he says.
AI Has Moved From Experimentation to Execution
The conversation about AI in retail supply chains has shifted. McMahon, who advises several AI companies operating in the space, is clear that 2026 marks a meaningful inflection point: from retailers dabbling in AI capability to organizations using it for real-time decisioning at scale.
The measurable lifts he is seeing are concentrated in three areas: demand forecasting accuracy, multi-echelon inventory optimization, and autonomous allocation. The shift is less about what AI can theoretically do and more about what it is now doing in production environments. “You’re moving out of the thought of what can this do, into less what should we do, and more into letting the systems intelligently act at scale,” McMahon says. The competitive implication is direct. “If you can consume the information, analyze the information, decide and act faster, that’s going to put you in a much better position than your competitors.”
Three Levers for the Next 18 Months
With tariff pressures, demand volatility, and global trade disruption reshaping the operating environment, McMahon is direct about where retail supply chain leaders should concentrate their focus. He identifies three levers as critical over the next 12 to 18 months:
- The first is network optionality, dual sourcing, near-shoring, and building flexibility into the supply network to reduce single-source exposure.
- The second is inventory productivity, precise placement, higher turns, and more disciplined management of stock across the network.
- The third is decision velocity, using AI-driven control towers to make faster, more decisive actions when conditions change.
“In a very volatile world, speed is going to beat size every time from a supply chain performance perspective,” McMahon says. “Creating a flexible environment, creating your optionality, getting better inventory productivity, and then creating better decision-making velocity is going to be critical.”
Building for What Comes Next
The supply chains that will define retail performance over the next decade are not the ones being stretched to accommodate today’s growth. They are the ones being deliberately redesigned around tomorrow’s demands, built for agility, powered by real-time intelligence, and supported by partnerships that treat the entire ecosystem as a shared asset.
“Expanding globally isn’t about copying what works at your home market,” McMahon says. “It’s about building that supply chain to really flex to that local reality.” The same principle applies at every stage of scale. Operational excellence in retail is not a fixed destination. It is a continuous reinvention, and the retailers who understand that are the ones who stay ahead of the curve rather than behind it.
Connect with Rich McMahon on LinkedIn or visit his website or company website for more insights.
