Is your post-pandemic supply chain move future-proof?

by Jay Ganapathy, VP at ITOrizon 

The pandemic made all of us appreciate outdoor and social interactions. After being stranded in the house for more than year, we are eagerly waiting for the country to get vaccinated to plan our vacations and do personal shopping. There will be no surprise if customers prefer to shop from physical stores as opposed to ordering online given the current surge in returns.

In the meanwhile, companies are rolling out new supply chain strategies for elevated e-commerce growth as the past year’s trends pointed predominantly to  e-commerce. Executive leaders should also ensure that the current supply chain strategies and investments are future-proof, both fit for today’s customer mindset and agile enough to meet unknown market demands.

Physical Expansion

Heavy investment in scaling distribution, and fulfillment capacities is rising. Target, Walmart, William-Sonoma, Home Depot have invested in retail warehouse space and automated fulfillment networks to help fulfill omni-channel orders through both store pickup and last-mile delivery to consumers’ homes 

Smart Warehouses

Automation in fulfillment and packaging is becoming a necessity to keep up in the fast-paced, e-commerce era, as it drives speed and efficiency throughout operations. It is a heavy undertaking and the time needed for implementation is lengthy.  

Transportation Visibility Platforms

50% of global product-centric enterprises plan to invest in real-time transportation visibility platforms. If the enterprises embrace JIT inventory or JIT manufacturing approach, then enabling visibility alone may not be sufficient. Broader visibility into their internal and external supply chain, including partner ecosystems, is vital.   

Inventory Planning

Recent Gartner research published in December  found that 46% of global product-centric enterprises have no plan to increase inventory within the next two years, but 43% are investing in safety stock now. There is no dispute that additional inventory adds cost, but businesses should ensure that they have both sufficient safety stock and inventory visibility so they can swiftly meet the market demands.   

Recommendations for Future Proof and Future Fit Approaches

Mini Warehouse Strategy

It is widely recognized that e-commerce is more space-intensive than traditional retail, requiring three times more warehousing space, as e-fulfillment operations include value-add activities such as assembly and reverse logistics. However, maintaining DCs and, FCs and optimizing the supply chain network is a huge undertaking for businesses without clear picture of the future.    

As an alternative approach, decentralized mini warehousesdeliver the additional space, faster fulfillment, and last mile shipping advantagesAdopting a mini warehouse strategy reduces the cost of retail space, warehouse automation, software licenses & implementation (Warehouse Management Systems, Transportation Management Systems, Order Management Systems, Integrating with their other existing SCM Systems) and logistics expenses.  Instead of shipping from large distribution centers, the decentralized strategy moves smaller quantities of product close to end users, thus improving the customer experienceImportantly, locating products closer to consumers reduces transportation costs, which account for about 50% of supply chain costs. This strategy allows businesses to meet the immediate needs and study our customer behavior and market dynamics before locking investment in million square foot warehouses. 

Leading-Edge Platforms

Platforms that improvadaptivity, creativity, or resilience through tools such as self-service business intelligence and no-code modules must be employed.   

Both traditional and cloud vendor solutions proved that it is impossible to assess all the capabilities of a system, configure all the features by go-live, and deem it the perfect long-term solution, especially when we don’t know what the future holds for the business. It is smart to rollout newer platforms, practices, and partnerships that boost speed and scale. 

Prioritize endtoend supply chain visibility, orchestration, advanced analytics and prediction to curb business challenges in the short and long term.  

Recent Forrester study claims that employing out-of-the-box analytics and automation capabilities enables quick customization by letting users configure, rather than code, and it is considered crucial for future proof strategy.   

As per Gartner, the Future of Supply Chain Technology is to invest in applications that support artificial intelligenceadvanced analytics capabilities and control-tower-like deployments to create end to end visibility and circumvent functionally siloed supply chain ecosystems

No-Code is relatively newer concept, but it enables companies to gain competitive advantage with the supply chain by helping to speed developmentempower business teams through a business platform, reap smaller wins, detect and address failures quickly and re-strategize as needed with real-time data.

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