Addressing future demand levels now – a crucial differentiator
Wholesale supply chain capacity has fast become critical to maintaining a competitive edge in meeting the current demands of buyers. However, demand is always subject to change and only the most responsive and integrated vendor teams are able to meet this head on.
Increased variation in what buyers require at a given time means it is no longer sufficient to rely on traditional baseline ordering patterns. Meeting demand on a more consistent basis therefore requires complex stock management systems, building and maintaining key relationships throughout the supply chain and a review of the triggers that influence buying behaviour. Recent years have seen a concerted focus on suppliers adopting more products lines – both in terms of volume and variation – in order to react quickly to the demands of buyers, which can often come at a moment’s notice.
However, consolidated product offerings should only be part of a major drive to improve the efficiency of a supplier’s infrastructure if demand is to be met far into the future. Part of this comes from suppliers ensuring they have a robust and responsive pool of vendors to source from. It is therefore key to have a secondary and even a tertiary option for sourcing in place on an ongoing basis if a last minute delivery failure is to be quickly resolved. Without this in place, it is almost impossible to provide an attractive ongoing solution for buyers.
Beyond this, suppliers need to appreciate the particular way a buyer likes to operate and map their service around this. However, larger customers ideally need to be engaged at the beginning of the relationship to allow account teams to identify historic demand patterns and really get a deep understanding of their buyer operations and customers, in order to anticipate future needs without being prompted.
Internal relationships are also key to efficient service and delivery where fast-moving demand is concerned. Sales and operations teams are naturally closer to the customer in terms of what is required ‘right now’ but also in terms of picking up on future developments for the buyer. The degree to which these teams communicate with the supply chain side of a vendor’s business can therefore make or break the ongoing service provided. Those teams that regularly collaborate to review the products that customers require on an ongoing basis are naturally in a much more agile position than they otherwise would be, when it comes to satisfying current and future requirements.
This then needs to feed into a more official review to establish when and how specific products will be required, thereby allowing the supply chain team to fulfil the customer requirements for a given period. Key to making this work is seeing it as an essential component of retaining customers, instead of merely a box ticking exercise. Those that fail to take this stage seriously risk losing long-standing customers for reasons that could have been avoided if the right kind of efforts had been made originally.
Change is now a constant state of play where all businesses are concerned. Gone are the days of gradual change, where suppliers could be confident of year-on-year demand levels without micro managing their buyers needs – remaining complacent about this leads to lost business and reputation. Suppliers that anticipate demand through a combination of market / product insight, customer relationships, and a robust inventory forecasting system are therefore in the most competitive and sustained position possible.
Mike McCreesh is VP Supply Chain at Office Depot
FedEx is Reshaping Last Mile with Autonomous Vehicles
FedEx is embarking on an expanded test of autonomous, driver-less delivery vehicles to develop its last-mile logistics.
The US logistics firm piloted autonomous vehicles from Nuro in April this year, and the pair will now explore that further in a multi-year partnership. Cosimo Leipold, Nuro’s head of partnerships, said the collaboration "will enable innovative, industry-first product offerings that will better everyday life and help make communities safer and greener".
FedEx will explore a variety of on-road use cases for the autonomous fleet, including multi-stop and appointment-based deliveries, going beyond more traditional applications of the technology in single-route movement of goods from A-B. Exponential growth in ecommerce is spurring its broader experimentation in new autonomy solutions, Fed-Ex says, both in-warehouse and on-road.
“FedEx was built on innovation, and it continues to be an integral part of our culture and business strategy,” said Rebecca Yeung, Vice President, Advanced Technology and Innovation, FedEx Corporation. “We are excited to collaborate with an industry leader like Nuro as we continue to explore the use of autonomous technologies within our operations.”
The changing role of couriers
Unlike structured delivery networks, operating under long-term partnerships and contracts, agility is where couriers deliver true value - and their ability to deftly solve last-mile fulfilment has most acutely been felt during the pandemic. For the billions of people around the world forced to stay at home to protect themselves and their communities from the spreading COVID-19 virus, couriers have been a constant. They may have been the only knock at the door some people experienced for weeks or months at a time.
But the last-mile has been uprooted by a boom in ecommerce, a shift that has been most apparent in the UK, US, China and Japan, according to the Global Parcel Delivery Market Insight Report 2021 by Apex Insight. These are markets with dominant economies and populations used to running their lives with a tap of a screen or double-click of a mouse.
“Getting last mile delivery right has long been a challenge for retailers,” says Kees Jacobs, Vice President, Consumer Goods and Retail at Capgemini. “In 2019, 97% of retail organisations felt their last-mile delivery models were not sustainable for full-scale implementation across all locations. Despite increasing demand from customers, companies were struggling to make the last mile profitable and efficient.”
Jacobs says that the pandemic alleviated some of these stresses in the short term. With no other option, consumers were understanding and tolerant, if not entirely happy, with longer delivery times and less transparent tracking. “But, as extremely high delivery demand continues to be normal, customers will expect brands to contract their delivery times,” he adds.
Last mile's role in ESG
Demand and volume weren’t the only things that have changed during the pandemic - businesses looked closer to home and as a result became more sustainable. Bricks and mortar stores were transformed from mini-showrooms to quasi-fulfilment centres. Online retailers and other businesses sought local solutions to ship more faster. In densely populated London, UK alone, Accenture found that delivery van emissions dropped by 17%, while Chicago, USA and Sydney, Australia saw similar emissions savings.