May 17, 2020

2011 Global Supply Chain Trends

Supply Chain
Supply Chain Solutions
Supply Chain Trends
G
Freddie Pierce
3 min
With 2012 right around the corner, E2open CEO Mark Woodward contributes his Top 5 logistics trends that all supply chain managers should
High volatility, massive swings in customer demand, and challenges in ensuring sufficient supply are the current reality for global supply chain execut...

High volatility, massive swings in customer demand, and challenges in ensuring sufficient supply are the current reality for global supply chain executives—making supply chain flexibility the new imperative for growing company revenues while keeping supply chain costs under control.

The findings are part of a new survey—2011 Global Supply Chain Trends—from global management consulting firm PRTM.

Based on interviews with senior executives from 150 companies across industries, this 2011 supplement to PRTM’s 2010–2012 Global Supply Chain Trends report identifies five levers that increase operational flexibility, drive revenues and cut costs.

Companies that have implemented the five supply chain flexibility levers have, on average, achieved a 12 to 15 percent revenue increase and reduced supply chain costs by 8 to 10 percent, according to the supply chain study.

However, PRTM found that operational flexibility requires significant investment as well as a top-down commitment from supply chain executives.

“Volatility is the new norm for supply chain operations, and continuing economic uncertainty is affecting demand by driving shorter capital investment cycles and tighter inventories,” Dr. Reinhard Geissbauer, director at PRTM and leader of the study, said. “At the same time, political unrest, growing competition for resources, and a supply base not yet fully recovered from the financial crisis is generating supply shortages. And that outlook does not even include singular events such as Fukushima, Icelandic volcanoes, and other natural events.”

As part of the study, PRTM found five “operational flexibility” levers that boost revenues and reduce supply chain costs:

Supply Assurance/Proactive Capacity Management: More than 70 percent of respondents said that supply assurance management—ensuring that the necessary resources to satisfy customer orders are available—is the most important lever to boost operational flexibility. Yet nearly half of respondents have not fully implemented partnerships with key suppliers and one-third said they haven’t focused on it at all.

Collaborative End-to-End Demand and Supply Planning: Supply chain leaders have established end-to-end, real-time supply and demand planning with both key customers and suppliers. Collaborative forecasting, executive sales and operations planning and real-time demand planning are being implemented, on average, by more than 50 percent of the companies surveyed. However, more than 20 percent said their companies have not even started to execute these key end-to-end planning initiatives.

Tighter Integration/Partner Supply Chain Architectures: All players in the global supply network must work together to execute agreed upon performance standards. In the last two years, more than 70 percent of respondents began establishing flexible production facilities, but more than one-third reported issues with key supplier architectures and nearly the same percentage found major gaps in their customers' architecture.

Tearing Down the Wall: Eliminating the divide between supply chain management and product development/engineering is essential for accelerating ramp-up and ramp-down of products into diverse customer markets. Half of those surveyed understand this and consequently have invested in higher development responsiveness. A “win-win” collaborative set-up includes joint consideration of product development, sales and supply chain requirements.

Superior Collaboration and Flexibility: In today’s volatile environment, collaboration and flexibility are critical for success. Only 10 percent of respondents reported that they have developed these capabilities to the point where they can adapt their business models faster than the competition.

Edited by Kevin Scarpati

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Jun 17, 2021

Cainiao Network Launches Customer-Centric Logistics

Cainiao
Alibaba
Logistics
Tmall618
3 min
Cainiao will focus on the customer experience in Singapore and Malaysia during its Tmall 618 Mid-Year Shopping Festival

As the logistics division of the Alibaba Group, Cainiao Smart Logistics Network has decided to provide its Southeast Asian customers with unsurpassed service during its annual shopping festival. Based on customer feedback surveys, the company will expand its real-time customer service support and speed up delivery times. ‘By expanding and deepening our services, we aim to provide a stronger logistics infrastructure that can bolster the booming eCommerce sector, support merchants’ expansion into new markets and diversify retail options for consumers’, said Chris Fan, Head of Cross-Border, Singapore, Cainiao Network.

 

Who Is Cainiao? 

According to TIME Magazine, Cainiao ‘is far from a typical logistics firm’. The company controls an open platform that allows it to collaborate with 3,000 logistics partners and 3 million couriers. This means that merchants can choose the least expensive and most efficient shipping options, based on Cainiao’s real-time logistics analytics. The company’s goal is to ship packages anywhere in the world in under 72 hours—and for less than US$3.00. 

 

For countless small business owners around the world, from coffee-growers to textile-weavers, this could change everything. Usually, it costs about US$100 to ship a DHL envelope from Shanghai to London in five days. Cainiao aims to change that. Said its CEO Wan Lin: ‘The biggest barrier to globalisation is logistics’. 

 

What’s Part of the Upgrade? 

Throughout the Tmall festival, Cainiao’s logistics upgrade will be divided into four critical segments: 

 

  • Real-time customer service support. Cainiao has launched a direct WhatsApp channel for customers to receive logistics updates and ask questions. 
  • Expansion of air freight parcel size and weight limits. Packages can now be up to 30 kilograms or 1-metre x 1.6 meters to help ship large items such as furniture. 
  • Daily air and sea freight connections. Shipping frequency will almost double to seven times weekly to maintain resilience and efficiency. 
  • Compensation for lost or damaged packages. Customers will be reimbursed up to RMB 2,000 (US$311). 

 

Where is the Company Headed? 

From June 1st to June 20th, the finale of Tmall, Cainiao will ensure that its customers feel confident in the company’s ability to deliver their packages. Despite global shipping delays due to COVID, the show will go on. Said Fan: ‘This series of customer-centric logistics upgrades reaffirms our goal of pursuing value-added services to enhance customers’ shopping experience while mitigating challenges posed by external factors’. 

 

Furthermore, Cainiao has recently expanded its Southeast Asian operations, achieving revenue growth of 68% year-over-year. In Malaysia, the logistics operation has partnered with BEST Inc. and Yunda; in Singapore, the company has partnered with Roadbull, Park & Parcel, and the Singapore Post. And if its recent measures help retain and grow its customer base, the company will be well-poised to lead the industry in resilient and customer-centric global logistics. ‘COVID-19 made everyone realise how important the logistics infrastructure backbone is’, said Wan. ‘And it gave us a peek at what Cainiao should look like in three years’. 

 

 

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