FEATURE SUPPLY CHAIN SOLUTIONS
THE FUTURE OF SUPPLY CHAIN in an age of instant gratification
Customers expect delivery in increasingly shorter time frames. Mikko Kärkkäinen of RELEX Solutions discusses future trends of supply chain in a fiercely competitive environment
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company can fundamentally change consumer attitudes and expectations. In the past few years attitudes to fulfilment have shifted with the rise of giant e-tailers including Amazon. Not only has longtail retail meant that a vast selection of goods is on offer but a combination of innovation in the sector and the huge logistical resources available to the biggest players means that shoppers expect more. Amazon’s trialling of 1-hour delivery and drones and its expansion into fresh, chilled and frozen food raises the bar for all retailers. Once customers get used to expecting their order delivered in full in 60 minutes they become increasingly reluctant to settle for less from other suppliers. The need to compete in this new market is driving many companies to look again at their own supply chain operations. Even if they don’t have the resources of an Amazon tightening up their supply chains allows them to leverage their advantages. So, in what direction is supply chain heading?
PROFESSIONALS TO THE FORE Twenty years ago there was only one course in Europe that offered a PhD in logistics. Now graduate and postgraduate courses in supply chain and logistics are springing up across this continent, America and Asia and attitudes to supply chain are changing. Boards are starting to recognise that there needs to be a much more profound understanding of supply chain right across businesses: store handling, warehouse operations, home delivery and returns, manufacturing and transport.
Rather than wait for sales, marketing, finance, HR and the rest to catch up senior SC executives really need to understand how the rest of the businesses they are engaged in work.
COLLABORATION WILL BE KEY The bedrock of the future will be built on improved collaboration between departments that this move ushers in. There needs to be more holistic control of retail and wholesale businesses end to end and side to side. We need a new phalanx of educated
trained professionals because holistic management of an increasingly complex environment demands people of the highest calibre. As computational power increases the best systems will give you higher and higher degrees of visibility over larger supply networks. At present many companies’ planning is done monthly. In the near future you can expect the picture to be updated at least once a day and this will move toward a real time overview of the entire supply operation across all transport units, stores, DCs and SKUs.
BEING ABLE TO LOOK BEFORE YOU LEAP Scenario testing will become standard practice in supply chain management. How does this work? It’s about identifying those ‘known unknowns’ the potential inaccuracies, things that need contingency planning, hard-to-predict factors. Shared scenario ‘playtesting’ prior to the most important events and seasons helps align the approach and responses of different teams within the business when the contingencies happen.
Simply add in any set of parameters, use your system data and monitor the KPIs to see the impact of different possible situations. Armed with these forecasts decide on responses to any given event that’s been played out in the ‘sand-pit’. These responses can then be automated so that if the system detects that the criteria have been met it will swing into action. Any uncertain situation can be played out in advance and as many likely permutations gamed and planned for. That way, in the thick of the season your system will be primed to deal with issues so you don’t have to.
YOUR FUTURE WILL BE FLEXIBLE You may need a flexible in-house workforce that can work around the peaks and troughs in picking and delivery and warehouse positioning requirements. Or you might outsource some capacity needs to partner or even share resources. In the longer term resource sharing
could be one of the most interesting areas of potential development in supply chain. Some have suggested that blockchain could be a great enabler. Others wonder if we’ll see the sharing economy extend to supply chain via an Uber- or an Airbnb-type app to provide easy access to logistics and warehousing. Could sharing be the way for all the
Davids to join together and scale up to take on Goliaths like Amazon? Whatever the case, its importance within the business world is only set to grow.
RELEX Solutions T: 0203 405 5621
www.relexsolutions.com
SMART REPLENISHMENT SOLUTION REPLACES MANUAL OPERATIONS
Apex Supply Chain Technologies has launched a smart Kanban/VMI system to manage stock and replace the need for manual counting, flags, labels and cards. The smart bin technology has been designed to provide a solution to stock replenishment issues, sending automated alerts and re-order notifications to suppliers to eliminate the need for counting trips, safety stock and emergency orders. It aims to keep lines up and running, boost supply chain productivity and grow bottom-line revenues. Powered by Trajectory Cloud (a secure business intelligence platform that integrates and connects your existing systems) the Actylus system improves productivity, visibility, reliability and accessibility throughout a business operation. The Trajectory Cloud is able to monitor the Actylus system to see when items need restocking, simultaneously tracking usage patterns and trends through a reporting system.
S6 MARCH/APRIL 2016 | MATERIALS HANDLING & LOGISTICS Stock levels can be checked via phone or email anytime and anywhere.
Available in a range of bin and shelf configurations, the Actylus is capable of storing and monitoring any item traditionally stored in bins from electrical components to healthcare supplies. It is fast and easy to set-up and interior lights keep bin contents visible to ensure swift selection. “We have launched the new Actylus smart replenishment solution to resolve the common issue of inefficiency across several industries and applications,” comments CEO Kent Savage. “Automated low-supply alerts will reduce the cost and time to stock your bins by 30% or more, significantly improving productivity and efficiency in a business.”
Apex Supply Chain Technologies T: 0800 840 4776
www.ApexSupplyChain.com/gb / MATERIALSHANDLINGLOGISTICS
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