We are living through times of uncertainty – and for many large enterprises, the process of building efficient, sustainable supply chains, that deliver value quickly and efficiently to customers and shareholders, is becoming increasingly complex and difficult.
The pressure is on to achieve ever-faster lead times. Customers are becoming more demanding. Often today, they expect next-day or even same-day delivery. Amazon has raised the bar in getting deliveries out quickly to customers and is now moving to a global next-day delivery capability. Other businesses running global supply chains need to follow suit and ensure they do not get left behind by their competitors in the race to deliver increasingly fast and efficient customer service.
Organisations also need to think about making their supply chains as sustainable as possible. Pressures to minimise the environmental impact of operations are continuously ramping up. Organisations need to demonstrate they are serious about sustainability in order to build successful supplier partnerships and improve levels of customer engagement.
Gauging the challenge
- How ERP can drive sustainability in the supply chain (opens in new tab)
So how can global organisations best address these challenges and achieve these objectives? There is always a temptation to throw resource at the problem. However, depending on the market and seasonality, there will be restrictions on labour availability. The labour costs of bringing in large numbers of new workers, whether permanent or temporary, are also likely to be prohibitive. After all, the end goal for many businesses is to drive enhanced shareholder value, increase market share or attain faster RoI, or better still, deliver a combination of all three.
Integrated processes and connectivity to fully-automated machines are key to delivering supply chain efficiencies that are so necessary to achieving the goals highlighted above. But to stay competitive in this space, businesses must also ensure they implement the IT systems and infrastructure they need to support these automated processes quickly and efficiently.
The ongoing roll-out of the Internet of Things (IoT) is driving enhanced connectivity across the supply chain, thereby supporting streamlined processes. Robotics and the latest transactional information systems can drive further efficiencies and help businesses not only to operate more efficiently but also gain a broader insight into how their supply chain is operating today.
At the most granular level, AI is helping organisations in areas of warehouse management to predict how demand is likely to change based on the latest weather forecasts or historical data patterns. Businesses can then use that data within automated processes that position and rearrange stock for picking processes based on projected demand. Slotting allows the fastest movers to be positioned in the optimal position in the warehouse, thereby reducing the time spent picking.
As a result, throughput is increased. customer demand is met more effectively, operational costs are reduced and the entire warehouse management process becomes faster and more efficient.
Technology fuelling global supply chain success
- How AI technology is digitising supply chain processes (opens in new tab)
At a more global level, supply chain visibility is another increasingly AI-driven capability. Having visibility of stock availability across the world, for example, could be crucial in enabling businesses to decide where best to source goods from. If, for instance, the business concerned has visibility across the chain and can supply in Europe from a number of different locations, it has the peace of mind of knowing that if it can’t supply from the UK for whatever reason, it could choose to do so from a range of other nearby countries instead.
This end-to-end visibility is key to the successful running of any global supply chain today, but it also needs to be combined with global consultancy. In the past, many global supply chains have had their hub in Europe or the US. That is all changing today with the rise of China as an economic power, which is becoming the manufacturing and even warehousing hub of a growing number of global supply chains. So, to effectively manage and shape the supply chain of today and tomorrow, organisations need a strong international consulting capability with hubs not just in Europe and the US but also in China and other locations around the globe.
Having a global supply chain is a must for many large businesses today. They offer companies the opportunity to have access to higher volumes and a greater variety of inventory and they can enable them to more quickly and easily tap into new international markets. Making such extended supply chains sustainable could be seen as challenging.
The reality is, however, that global supply chains can be fully sustainable as long as the right processes and technologies are implemented. Technologies that drive efficiency will enable the supply chain to support cuts in costs by facilitating reduced resource consumption and improving productivity. Supply chains will also be more sustainable if technology can help ensure items are moved more quickly to their destination; there is little double-handling, full loads are transported and optimal routes taken.
The latest technologies also have the potential to drive enhanced revenues and productivity by streamlining and automating processes, and enabling enterprises to sell and ship more goods or materials more quickly. They can help build better customer engagement, thereby reducing churn. They keep a lid on costs through streamlined automation and they allow organisations to forecast accurately and plan more strategically. Indeed, if businesses are to overcome the challenges they face in running global supply chains, new technologies and connectivity are ultimately certain to have a key role to play.
- Nine steps for CIOs towards successful supply chain management (opens in new tab)
Richard Seel, Managing Director, Supply Chain & Logistics (UK & US), delaware (opens in new tab)