Building a sustainable supply chain in uncertain times
We are living in uncertain times – and for many large enterprises, building efficient, sustainable supply chains that deliver value quickly to customers and shareholders is becoming increasingly challenging.
Customers are getting 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 organisations running global supply chains need to follow suit and make sure they do not get left behind by their competitors in the race to deliver ever faster and more efficient customer service.
Businesses also need to think about making their supply chains as sustainable as possible. Pressures to minimise the environmental impact of operations are growing all the time. Organisations need to demonstrate they are serious about sustainability in order to build successful supplier partnerships and enhance customer engagement.
Meeting a need
So how can global organisations address these challenges and achieve these goals? There is always a temptation to throw resources at the problem. However, depending on the market, there will be restrictions on the availability of labour. The employment costs of bringing on 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.
Automated processes are key to the achievement of 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 solutions and infrastructure they need to support these automated processes quickly and efficiently.
The advent 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 the supply chain is working 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 then rearrange stock for picking processes based on projected demand. Slotting allows the fastest movers to be positioned in the optimal position in the warehouse so reducing the time spent picking.
As a result, throughput is increased. customer demand is met more effectively, operational costs are cut and the whole warehouse management process becomes faster and more efficient.
Technology driving global supply chain success
At a more global level, supply chain visibility is another increasingly AI-driven capability. It can be a key benefit of a global SAP system, for example. 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 example, the business concerned has visibility across the chain and can supply in Europe from a number of different locations, has the peace of mind of knowing that if, for instance, they can't supply on one occasion from the UK, they could choose 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. 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.
Ultimately, if global supply chains are to overcome the many challenges they face today, new technologies are likely to play a key role. They drive enhanced revenues by streamlining and automating processes and enabling businesses to sell more goods or materials more quickly. They help build better customer engagement, thereby reducing churn. They keep a lid on costs through streamlined automation and they allow businesses to forecast accurately and plan more strategically. All of this is, in a nutshell, why global businesses are increasingly embracing the latest supply chain technology today.
About delaware Consulting
Richard Seel is the Managing Director of Supply Chain & Logistics (UK & US) at delaware.
delaware consulting is a fast-growing, global company that delivers advanced solutions and services to organisations striving for a sustainable, competitive advantage. delaware guides its customers through their business transformation, applying the ecosystems of its main business partners, SAP and Microsoft. delaware continues to service its customers afterwards, assuring continuity and continuous improvement. For more information, please visit www.delaware.co.uk
Pandora and IBM digitise jewellery supply chain
Pandora has overhauled its global supply chain in partnership with IBM amid an ecommerce sales boom for its hand-finished jewellery.
The company found international success offering customisable charm bracelets and other personalised jewellery though its chain of bricks and mortar retail destinations. But in 2020, as the COVID-19 outbreak forced physical stores to close, Pandora strengthened its omnichannel operations and doubled online sales.
A focus on customer experience included deploying IBM’s Sterling Order Management, increasing supply chain resiliency and safeguarding against disruption across the global value chain.
Pandora leverages IBM Sterling Order Management as the backbone it its omnichannel fulfilment, with Salesforce Commerce Cloud powering its ecommerce. Greater automation across its channels has boosted the jeweller’s sustainability credentials, IBM said, streamlining processes for more efficient delivery. It has also given in-store staff and virtual customer service representatives superior end-to-end visibility to better meet consumer needs.
Jim Cruickshank, VP of Digital Development & Retail Technology, Pandora, said the digital transformation journey has brought “digital and store technology closer together and closer to the customer”, highlighting how important the customer journey remains, even during unprecedented disruption.
"Our mission is about creating a personal experience and we've instituted massive platform changes with IBM Sterling and Salesforce to enable new digital-first capabilities that are much more individualised, localised and connected across channels and markets,” he added.
Pandora’s pivot to digital
The pandemic forced the doors closed at most of Pandora’s 2,700 retail locations. To remain competitive, it pivoted to online retail. Virtual queuing for stores and virtual product trials via augmented reality (AR) technology went someway to emulating the in-store experience and retail theatre that is the brand’s hallmark. Meanwhile digital investments in supply chain efficiency was central to delivering on consumer demand.
“Consumer behaviour has significantly shifted and will continue to evolve with businesses needing to quickly adapt to new preferences and needs,” said Kareem Yusuf, General Manager, AI Applications and Blockchain, IBM. “To address this shift, leading retailers like Pandora rely on innovation to increase their business agility by enabling and scaling sustainable supply chain operations using AI and cloud.”
Yusuf said Pandora’s success was indicative of how to remain competitive by “finding new ways to create differentiated customer experiences that protect their enterprises from disruptions to help mitigate risk and accelerate growth”.