MPO Blog: The Key To Supply Chain Management
According to a study into global supply chains, carried out by McKinsey & Company, “By the year 2020, 80% of the goods (compared to 20% today) will be manufactured in a country different from where they are consumed.”
This insight shines a light on the increasing unpredictable future of the global supply network, as operations continue to move beyond their limits onto a global and international scale. As these networks continue to provide increasingly evolved operations, more capable of fulfilling and delivering orders than ever before.
Expanding and evolving a supply chain network is a significantly complex operation and requires an incredible amount of meticulous planning and attention. The global environment, regulations, trade wars, politics and other disruptions must all be considered before the benefits such as quicker lead times, increased options and expanded product portfolios can all be recognised.
As consumer demands continue to change and become more intense for companies, supply chain management is becoming more of a front for generating new revenues and demand for customers. By being able to effectively manage these significant movement shifts, companies can use their supply chain management strategies to gain a competitive advantage and return positive business results.
Supply chain leaders must now focus on their contributions to revenues and profit enhancements, as the traditional view of minimising supply chain costs is forgotten, replaced by the importance of meeting consumer service requirements.
Modern day supply chains need two things to be successful - consistent, on-time, in-full customer orders, and to do this in the most efficient way possible. The focus of cost reduction is detrimental to supply chain strategies. The order flows that have been born from this, whilst cost-efficient, have been static and immobile, which in turn, stand in the way of supply chain growth and flexibility.
Flexibility and agility is essential to supply chain networks as markets continue to move towards globalisation, free trade and outsourcing. The building and leveraging of all supply chain parties, networks and processes determine how supply chains and businesses will succeed. As consumer choice continues to be impacted and influenced by overall experience compared to price or product, supply chain orchestration and the need for agility and flexibility within operations is clear.
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”.