The supply chain is at the heart of business operations. However, it is often affected by many challenges and securing greater operational efficiencies is an age-old battle for supply chain and logistics companies. However, industries across every sector are now demanding increased accuracy – in order to drive cost efficiencies, maximise productivity and ultimately, improve customer service – as companies fully realise the benefits that this factor can hold. Accuracy is a hugely valuable business metric that mustn’t be overlooked, and its importance only increases within the digital supply chain.
Honing in on inventory management
A 2019 report from Accenture found 70 per cent of industry professionals surveyed believe the supply chain is becoming increasingly important in delivering better quality customer service in 2020.
One such process that is crucial when it comes to providing excellent customer service is inventory management. By getting this right, supply chain businesses will have the ability to track resources and ensure they are appropriately stocked for the demand predicted, and that stock levels can be relayed along the chain – for example, so a consumer can’t order a good online that is not actually available. This is key to meeting evolving customer demands for exceptional service.
As eCommerce is thriving, supply chain companies must fine-tune the balance of matching supply with demand. Businesses with an overstocked inventory risk placing pressure on limited and costly warehouse capacity, or grapple with lost revenue due to the loss of perishable or unsaleable goods. On the other end of the spectrum, those with low stock levels face the dilemma of losing customers due to items being unavailable or a lack of diversity within product lines. Accurately managing the flow of inventory is core to avoiding such issues and maintaining a good relationship with customers. By championing accuracy within inventory management, businesses can work towards maintaining balance and preserving the bottom line.
Manual inventory management is an area particularly susceptible to human error, leading to poor quality customer service. Businesses that have a manual inventory management process are at risk of over or underselling, due to the time-consuming and complex nature of such a task. In the event that a customer purchases an out of stock item, the company’s brand reputation will be affected and the customer service team may need to offer discounts or promotions in order to win them back. This in itself can negatively impact profit margins.
The ability to access inventory in real-time is vital in enabling businesses to prevent issues and maintain customer satisfaction. Implementing an IT system, such as an order management system (OMS), can allow businesses to gather information rapidly from throughout the chain and enable them to make smarter decisions in the future.
Solutions that unify the supply chain allow companies to monitor goods in real-time, and track them as they make their way to the customer. Collecting this data is imperative in helping companies maximise the capacity of their storage space – by never having too much or too little stock – and determine supply and demand, as well as allowing them to benefit from data-driven insights, which are especially valuable when combined with analytics.
Automation, AI and data analytics have brought untold benefits to supply chain processes. Automated supply chain solutions can be integrated seamlessly into existing workflows with little to no downtime, allowing businesses to feel the benefits almost immediately. In a fast-moving technological landscape, these solutions allow businesses to stay agile, and adapt to changing customer needs and any issues that may arise in the future. They also work to free up workers’ time from lengthy and tedious manual input tasks, allowing them to reapply their skills to more fulfilling and impactful work elsewhere in the production cycle.
Unlocking profit with picking
The picking process is another factor that is key to improved customer service and profit. Many businesses perform thousands of picks every hour, and accuracy is crucial to ensure that the wrong products are not mistakenly delivered, negatively impacting the customer experience and the business’ bottom line due to returns and redelivery. By empowering workers with Enterprise Resource Planning (ERP) systems, businesses can minimise the risks of missed orders or incorrect delivery locations using barcode scanners, digital data entry, voice-directed technology and RFID tags, continually scanned throughout the supply chain.
By implementing voice-enabled picking systems, the warehouse team is free to focus on the picking process without being overwhelmed by paperwork. When employees have both hands free, picking accuracy and speed are improved significantly. The issue with manual picks carried out by workers is that they typically are not verified. So, if the wrong item is selected by accident, the mistake is not highlighted until the customer receives it, by which point the reputational damage has been done. This also harms profit margins, as businesses must replace items and might offer promotions as compensation. In fact, TaylorMade, the golf equipment manufacturer, reduced picking errors from 40-50 per cent to 1 per cent after moving to a voice-directed picking system, and Dorman Products, a supplier of automotive replacement parts, reduced its picking inaccuracy by 86 per cent.
Another tool that can be used to help improve accuracy within the supply chain is performance metrics, such as Perfect Order Rates, which details how many orders are completed without incident. This allows companies to evaluate the precision of their fulfilment, which can help them to hone in on areas of improvement and strive for perfect accuracy, improved profit margins and overall operational efficiency.
Investing in improving supply chain processes that will have a positive effect on the accuracy of operations is a no-brainer when it comes to meeting consumer expectations and increasing profit. By digitalising processes, such as inventory management and picking, and standardising and converging key supply chain functions, such as transportation and warehousing, companies will not only be able to better fulfil orders and track the status of stock as it moves along the chain, but will be able to utilise data-driven insights to ensure they are constantly improving and that no part of the supply chain gets left behind.
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Marcus Jeffery is Territory Manager - UK and Ireland, Ivanti Supply Chain