Is Your Supply Chain Software Giving You the Biggest Bang for Your Buck?
Published on 1 July 2020
If you’re only using a small percentage of your software’s capabilities, and if your platforms aren’t working from the same playbook, it’s time to reimagine your digital transformation.
Whether it’s orchestrating the movement of product within a warehouse’s four walls, automating fulfillment activities, coordinating transportation processes, or generating data for good decision-making, supply chain software has become a critical tool in helping companies work better, smarter, and faster in any business conditions.
Even before COVID became a top concern for organizations, governments, and individuals worldwide, problems like the national labor shortage, the trade wars, and changing customer expectations were all impacting companies’ bottom lines. Rooted in the rapid growth of e-commerce—a trend that was accelerated by the pandemic—consumer expectations now include (but aren’t limited to):
- Confidence that the product will be delivered.
- The products are available at the right location (e.g., customer satisfaction wanes if a florist doesn’t have the necessary materials to make the bouquet that was ordered).
- The products will be delivered on time. Customers expect products to be delivered on time (e.g., customer satisfaction falls off when food delivery is an hour late, or when holiday gifts don’t show up on time).
- After-sales support and returns processes are easy to access and utilize.
To accommodate these demands, more companies are investing in supply chain management (SCM) and supply chain execution (SCE) software that helps increase service levels while decreasing costs.
These platforms also enable supply chain visibility, or the ability to track orders from the point of raw materials through production to product orders and shipments. Armed with detailed information about these processes—right down to the daily lead times—companies can more effectively forecast demand, manage inventory, and meet their customers’ needs.
Getting the Highest Value from Your Software
Fully leveraging supply chain solutions requires a commitment to leveraging the highest value out of those investments. Simply implementing simple solutions and sticking to the low-hanging fruits usually winds up with mediocre results.
Here’s the good news: those companies that do work to maximize their supply chain software investments are seeing gains like labor reductions, improvements to service level agreement (SLA) timelines, more efficient utilization of resources, less rework, and true cost savings.
These benefits extend from the point of raw material sourcing all the way through to last-mile distribution—and all points in between.
These “wins” expand even further when siloed systems are replaced with synergistic supply chain solutions that manage the holistic supply chain (and not just bits and pieces of it). Using these holistic solutions, companies can manage their supply chain in a convergent manner, leveraging various analytics and reporting tools across their entire enterprises—not just in the warehouse, in the DC, or out on the road.
Digging down deeper, the holistic approach helps to minimize the burden on DCs to manage a tremendous amount of inbound quality assurance rework. Armed with more holistic data, logistics managers can see what’s happening all the way back to the manufacturing stage, monitor product as it makes its way through the distribution facility, and then track it across the transportation network. This enables good planning of both inbound and outbound freight, along the way minimizing challenges and helping companies get the most out of their software investments.
Managing by Exception
There was a time DCs and warehouses were largely managed by exception. If the operations were running smoothly, then there was no reason to intervene, make changes, or try to improve anything. When a problem occurred, resources were deployed to mitigate the issue and then move along to the next challenge. Logistics managers were there to put out fires, keep their operations running, and get orders out the door in a timely manner
As part of this disjointed, exception-management process, software systems were largely siloed and didn’t “talk” to one another. As a result, companies learned to function by using the bare minimum functionalities of these systems without giving much thought to how much more they could be getting out of those systems.
This approach has shifted dramatically over the last few years, and was pushed into completely new territory when the global pandemic surfaced in 2020. Traditional supply chains were turned on end and even those companies that thought they were advancing down the path to digital transformation found themselves dealing with a host of unprecedented challenges.
Needless to say, the warehouse or DC that was managing by exception when COVID emerged was hit with more than its fair share of problems. Lacking a holistic view of its operations, this organization not only wasn’t hitting SLAs, it was unable to accommodate any of the customer demands outlined above. Without good supply chain visibility enabled by a holistic platform—and the analytics and reporting to go along with it—these companies continue to face pandemic-related supply challenges.
“The COVID-19 pandemic has changed the business environment for many organizations around the globe, and has highlighted the importance of being able to react, adapt, and set up crisis management mechanisms in order to weather situations of uncertainty,” World Economic Forum (WEF) points out. “As the acute restrictions and lockdowns created many urgent situations that required immediate attention in the early days of the pandemic, many companies have now begun to move to a recovery mode and have started planning for the longer term.”
Individual shippers can use this recovery period to maximize inventory utilization and inventory effectiveness while at the same time decreasing inventory and reducing stock timelines needed to be able to meet customer demands. By using a holistic supply chain view to fulfill demand across the network and ensure that customer expectations are met—if not exceeded—companies can effectively navigate the current crisis while also preparing themselves for the next potential disruption.
For logistics providers, the focus should be on planning and ensuring that the right personnel, processes, and systems are in place to accommodate customer needs—mainly by meeting SLAs. Skip this step and it won’t be long before your best customers start shopping around from other logistics providers. With the consumer square in the driver’s seat, and with the Amazon Effect still in full swing, it’s time to carefully assess your supply chain solutions and ensure that they offer a convergent, holistic view of your business.
As the coronavirus outbreak has spread, the need to quickly develop and adopt new capabilities that ensure long-term resiliency is now firmly on everyone’s minds. Status quo is not achievable; there is no going back.