The Shift Toward a Demand Chain Model

Experts say demand-chain models are an effective solution for supply chains to meet the increased need for immediacy and improve the customer experience.

Today, consumers crave instant gratification when searching for products and services online. They want access to information and results in an immediate time frame, and this transcends throughout the buying funnel. It especially includes delivery. To meet consumer demands, there are high expectations on companies to offer same-day shipping options to their customers.

While companies work hard to get packages and goods to consumers efficiently, Forbes states,

…there comes a point where supply chain simply can’t get a package to you any faster.

This puts pressure on supply chains to evolve their strategies and execute efficient and effective solutions to meet these expectations. Distribution centers (DC) have been an integral component to a supply chain, and provide many benefits with respect to meeting these expectations. In 2017, the United States warehousing market, accounted for $148.7 billion. The total number of warehouses accounted reported in the same year was 17,353. There is a growing need for companies to expand their distribution capacity to meet the output requirements for consumers.

However, while expanding DC’s provides improved delivery solutions, experts believe a shift toward a holistic demand-chain would take it one step further. This article by Morai Logistics discusses the fundamentals of the demand-chain and the beneficial outcomes it could have as a supply chain model.

What’s a Demand-Chain?

According to Forbes, a demand-chain is ‘a state where production is localized and immediate’. It represents a shift from relying on centralized manufacturers, to autonomous machines. Supply Chain Market describes this migration as ‘the next generation in fulfillment’. It further responds to the extensive growth of ‘net economy’ or e-commerce, which has been fueling a high level of demand for immediacy.

To compete into this high-performance global market place, companies must follow a model that considers the following key metrics:

  • Product assortment
  • Fulfillment and execution
  • Visibility
  • Customer loyalty and retention

The overall added benefit of focusing on demand and pull, is that customers will get their products on demand. Simply put by Forbes, ‘there is a fast, on-demand creation of goods in the exact amount necessary’.

Top Reasons to Consider Demand

Demand-Chain models are a step toward meeting customer needs through the application of technology and demand-focused strategy. There are many reasons why this model is favourable for high-performance industries, such as supply chain and logistics.

Improves Customer Experience

Developing optimized solutions to improve on-time delivery and immediacy, has been primarily motivated by the objective of carrying out a positive customer experience. Thus, by improving visibility and leveraging technology to create more efficient modes of production and delivery, immediacy can be met.

Reduces Wasted Inventory

Businesses may run into various challenges when trying to produce and deliver large outputs, which can ultimately waste inventory. Possible reasons could be overproduction, delays or order defects. As a result, unnecessary inventory leads to a waste in product and money for the business. A demand-chain enables businesses to follow a just-in-time model where products are produced and delivered when needed.

Optimizes Order Fulfillment

Furthermore, a reduction in wasted inventory, a demand-chain model also aligns order fulfillment with delivery performance. When an organization can effectively understand the level of production required, they can better predict how to allocate resources to carry out the shipment life-cycle.

5 Ways RPA Optimizes Supply Chain Management

Robotic Process Automation (RPA) is an effective solution that helps improve efficiencies, reduce costs and optimize productivity.

Findings on the global RPA market, project a ‘Compound Annual Growth Rate (CAGR) of over 27%’ throughout 2013 to 2024. By 2024, this would amount to over 7, 000 Million (USD).

In a recent survey on RPA adoption, 17% of supply chain professionals believe RPA will be implemented in their organization’s by 2020. Furthermore, two thirds of respondents stated that their organization currently uses or are exploring this technology.

According to McKinsey & Company, RPA is defined as,

A type of software that mimics the activity of a human being in carrying out a task within a process.

Integrating this technology into any organization helps reduce human error and cost, while improving ROI and productivity. However, although skepticism exists in matters of replacing human jobs with automation, RPA actually provides many benefits to supply chains. Therefore, RPA is emerging as an effective technology for many industries, including supply chain and logistics.

This infographic by Morai Logistics outlines the top 5 ways RPA help improve supply chain management processes.

Robotic Process Automation: Supply Chain Optimization

morai-infographic-5-rpa-optimizes-supply-chain-management (3)

That’s it for us this week! If you liked this blog post, why not subscribe to our blog? Interested in what we do as a 3rd party logistics provider? Then don’t hesitate to check out our services (as expressed above, we are very pro finding you the lowest total cost!). We’re also in the twittersphere, so give us a follow to get the latest logistics and supply chain news.

From Adoption to Digital Transformation
Experts say that supply chains must move from adoption to digital transformation if they want to improve efficiencies, operations and take their businesses to scale.

For the North American transportation supply chain and logistics industry, last year saw a widespread adoption of digital technologies. Predictive analytics proved beneficial to providing end-to-end visibility of supply chains, and ensuring efficiency with on-demand deliveries. When applied to operations, cloud-based technologies helped businesses scale, improved workflow productivity and created opportunities for competitive differentiation. Furthermore, robotic and automation armed warehouses with optimized levels of productivity and improved customer service.

Although the adoption of emerging technologies created solutions for transportation supply chains, the industry still faces many significant challenges. The increase in consumer demand for immediacy and personalization, in conjunction with pressures of the nationwide labour shortage, requires more than digital adoption. To further improve operational efficiencies, reduce costs and create opportunity for bottom line profits, supply chains must move from adoption to digital transformation.

According to Supply Chain Management Review,

Digital transformation is perhaps best explained as the implementation of new technologies to accelerate operations, sales and customer service, back office productivity and, ultimately, the growth of the business from end-to-end.

Whether the customer is a shipper, retail wholesaler or vendors, the goal of digital transformation is to ultimately improve the customer experience.

This week Morai Logistics provides an overview of what digital transformation looks like in transportation supply chains. The benefits moving from evolving from simply adopting digital technology to a comprehensive and whole-scale transformation will also be reinforced.

Digital Transformation of Supply Chains

There are many industries across the world recognizing the need to digitally transform. North America ranks at the top of the global market. By 2022, global statistics forecasts that spending on ‘the technologies and service that enable digital transformation’ will reach USD 1.97 trillion. However, in a study on the adoption of digital transformation within five major sectors, supply chains reported the ‘lowest level of digitization’.

Although digital transformation is considered to be a main focus for many, the truth is, this process fails more than it succeeds. According to the found of Supply Chain Insights, there are four common mistakes businesses make:

  • Disconnect with vision and strategy on implementing digital transformation
  • Transformation process does not include ownership from the business
  • Focus is not on meeting the needs of the customer market
  • Lack of partnership with innovative technology companies

Let’s address mistake number one: disconnect with vision and strategy. Before a supply chain executes digital transformation, they must understand the trends shaping the need to transform.

Universal Need for Digital Transformation

There are many reasons why digital transformation can improve the end to end profits of an organization. They may change depending on the industry. For supply chain and logistics, the following three reasons why adoption should move to transformation.

Customer Experience

Today, customer experience is at the top of the board when it comes to strategic priority. From social media to online buying, to smartphones, consumers have the power to connect anywhere at any time. This has changed the buyer’s journey significantly. Consumers expect a heightened level of transparency and personalized and engaging experiences.

Employee Support

The current capacity crunch and nationwide driver shortage, also requires organizations to look at employee fulfillment. Integrating digital tools throughout the supply chain, will promote efficient methods of productivity and communication. This can have an incredible impact on performance and empowerment, while also giving more time to focus on ‘streamlined decision-making’.

Strategic Insights

The implementation of technologies throughout all facets of a supply chain can help generate large data sets, known as Big Data. Online interactions between shipper and supplier can generate unceasing amounts of data. However, without appropriate tools to translate these numbers into valuable insight, meeting the needs of either party becomes challenging. Therefore, digital transformation ensures that innovative technology solutions are in place to provide strategic data that will ultimately achieve success.

3PLs Offer Optimized Solutions to Nationwide Capacity Crunch

As the nationwide capacity crunch drives into the New Year, third party logistics (3PL) providers offer shippers reliable and cost-effective solutions.

Last year the ‘nationwide truck shortage’, also referred to as the capacity crunch, was a significant challenge for the transportation industry. Carrying over into the New Year, the increase in freight rates and subsequent decrease in drivers continues to impact shippers tremendously. In December it was reported that the ELD mandate was effecting not only trucking, but other modes of transportation. This movement also impacted ‘ocean shipping, intermodal and air freight’. With consumer demands at an all-time high, the outcome of implementing this type of directive has caused a variety of issues. Experts identify increased rates, shipment delays and bottlenecks amongst the most common setbacks shippers face.

In March of 2018, Morai Logistics presented some of the optimized solutions third party logistics (3PL) providers offer shippers. According to Supply Chain Dive,

3PLs can step in and usually save money for the shipper while helping the shipper get a faster route.

While the capacity crunch isn’t expected to go away anytime soon, 3PLs continue to develop optimized solutions to help shippers become proactive to industry demands. This includes a combination of technology integration, networking and Omni-channel opportunities.

This article outlines the various obstacles the transportation industry faces caused by the capacity crunch. Furthermore, it defines why 3PLs remain the prime method to ensure an efficient and cost-effective shipment life cycle.

Impact of Capacity Crunch

The capacity crunch has placed a heavy burden on the transportation supply chain and logistics industry. The Electronic Logging Devices (ELD) mandate that was strongly enforced last year has deterred many drivers from the industry. This creates additional setback for shippers, as a decrease in drivers means an increase in freight rates and inefficient delivery. While strategies to improve driver retention and job satisfaction should be a high priority, the obstacles shippers face is also important.

According to the 2018 Inbound Logistics Annual Survey:

  • 81% of shippers felt their biggest challenge was ‘finding capacity’
  • 78% of shippers experienced rate hikes
  • 94% of shippers stated that ‘driver-related costs’ was important

The capacity crunch forces shippers to seek reliable, alternative transportation methods at cheaper rates. This can be very challenging as competition and a lack of drivers continue to increase costs. However, third party logistics (3PL) provider’s offer optimized solutions to both carriers and shippers that can help alleviate some of this burden.

3PL Solutions

In addition to price and capacity, a nationwide truck shortage can significantly impact the reliability of deliveries and the quality of customer service. Research on the preferences of shippers who choose ‘motor carriers’ found that:

  • 84% say reliability
  • 62% say customer service
  • 73% say price
  • 45% say capacity

3PLs must develop solutions that enable shippers to execute orders efficiently and cost-effectively to meet the increase in consumer demands. The widespread integration of advanced technology has made considerable contributions to the way 3PLs service shippers and carriers. However, below are the most relevant ways these transportation partners can help shippers impact by a capacity crunch.

Cost-Effective Rates Due to their large-scale industry presence, 3PLs are able to offer better rates. They can also negotiate better than small companies or independent drivers, which help offer shippers affordable options.

Network of Carriers Shippers benefit from the substantial relationships that 3PLs have built. This provides access to Omni-channel and intermodal modes of transportation that offer multiple avenues to transport products efficiently.

Digital Maturity The integration of technology will continue to shape the way warehouses operate and communicate. It will also provide companies with the ability to extract data to create insight on forecasts and patterns. 3PLs continue to integrate digital processes to improve the visibility of shipments. In addition, emerging platforms such as predictive analytics also enable shippers to take a proactive, rather than reactive approach, to operations and delivery.

There is no denying that the impact of the ELD mandate and driver shortage has created obstacles for both shippers and carriers. While the capacity crunch remains a top concern to the transportation industry in 2019, 3PLs continue to provide effective solutions.

4 Supply Chain and Logistics Trends for 2019

The integration of technologies and the digitization of supply chain and logistics will continue to transform the industry in 2019.

Last year, changes in global markets and the boom in e-commerce increased consumer spending and expectations significantly. According to Statista, 21.1 % of supply chain executives found visibility to be the top challenge facing supply chains in 2018. In second place, 19.7% of respondents believe fluctuations in consumer demand was the most significant obstacle. The industry responded with the integration of innovative emerging platforms such as artificial intelligence (AI), predictive analytics, cloud technology and machine learning. This also led to the development of data-driven and predictive solutions that enabled companies to focus on providing personalized, customer-centric experiences.

At the beginning of last year, Morai Logistics discussed the Fourth Industrial Revolution known as Industry 4.0. The need for digital integration and adoption has indeed shifted from being an attractive add-on to a necessity to survive in changing markets. Despite hesitation to risk, change and integration, digital transformation is being progressively adopted by many industries, especially in supply chain and logistics. According to expert forecasts on future trends in supply chain management,

…over the next five years about 80% believe ‘digital supply chain’ will be the leading industry model

Indeed the last year has seen incredible resilience from transportation supply chains against the disruption caused by digitization. However, what trends will be at the top of the list this year?

This article reviews 4 supply chain and logistics trends of 2019.

1. Capacity Crunch

In March of 2018, Morai Logistics discussed the nationwide truck shortage and its effects on deliveries and rates. This year, the diver shortage will continue to require third party logistics (3PL) providers to improve their services. They provide shippers with solutions through ‘network connections, competitive volume rates and ongoing integration of information technology’.

2. Transportation Regulations

Another industry trend hat will carry over from 2018 and cause turbulence, is electronic logging devices (ELDs). Despite being introduced into the industry back in 2012, ELDs were officially mandated in 2017. Although this is a positive move to monitor the health of drivers, it has remained a top stressor for the industry.

3. Digitization

As mentioned above, digitization will continue to impact the transportation supply chain industry this year. The adoption of technologies, apps and emerging platforms in response to consumer demand will become necessary to compete with changing markets. Data analytics will be a major player this year as companies will have to assess ‘supplier risk, tariff risk, logistics costs or manufacturing costs’. In addition, AI and machine learning will be two significant technologies of 2019.

According to Forbes, machine learning will impact the following areas:

  • Warehouse management systems
  • Robotic vision systems
  • Supply chain planning
  • Supply chain visibility

4. Warehousing

According to Deloitte, by the end of 2018, ‘online sales of consumer products were project to increase 350%’. The dollar value of would equate to ‘USD$36 billion’. With over 2.14 billion people expected to shop online by 2021, the ecommerce market is significantly impacting consumer demand. This increase in expectations on service and delivery will require warehouses to focus on direct-to-consumer fulfillment.

What does this look like? Experts see a widespread adoption of automation and adaptable and scalable solutions such as robotics and drones. This will be highly important for the retail industry. Furthermore, improved strategies on ‘design and location’ of warehousing will ensure products are within range of consumers to guarantee fast delivery. The added pressure to expand, innovate and adopt new technologies will also have a significant impact on the labour force. Wages are expected to increase across supply chains, which should motivate companies to create ‘employee engagement programs’.

The above supply chain and logistics trends are four of many that will shape the industry this year. In order to develop solutions geared toward improving the customer experience and combating consumer demand, technology will continue to play a significant role in 2019.

How Supply Chain Orchestration Improves the Customer Experience

Experts recommend supply chain orchestration as an effective solution to help organizations deliver positive customer experiences.

When it relates to personalization, 76% of customers expect companies to understand their needs and expectations. Findings also indicate that 67% of customers have switched vendors to seek ‘a more customer-like experience’. Customer expectation is a significant driver to the way organizations operate. Providing both convenience and speed is crucial to building a customer-centric business and building long term relationships with those customers.

Logistics are learning to adapt to the demands of customers, and organizations are seeking the most effective solutions to remain competitive. Supply chain orchestration (SCO) has been connected to providing a positive customer experience. According to supply chain experts,

SCO enables you to make informed, conscious choices about how to serve your customers better.

Orchestration benefits ecommerce markets in particular because it increases a customer’s accessibility to a larger variety of products and services. Therefore, customers are provided with a wider variety of delivery options due to an expansive ‘network of operators and carriers’. In addition, SCO also provides a variety of benefits that help close the gaps when it comes to visibility and efficiency.

This article uncovers the foundation of supply chain orchestration and how supply chains can leverage it to better the customer experience.

Supply Chain Orchestration Foundations

To understand how supply chain orchestration improves the customer experience, it’s important to first understand the need for SCO. As mentioned above, consumer demand is changing dramatically in response to a variety of factors including a significant increase in accessibility. For instance, customers who shop online are becoming increasingly expectant of fast delivery, personalized customer experience and order fulfillment.

A poor experience can influence a customer’s intent to re-purchase. Research found that 67% of customers would stop buying from a company if a competitor offered a better experience. Omni-channel touch points and visibility must be a core focus to organizations who cater to different generations and demographics. To ensure all consumer demands are being met, a seamless supply chain operation must be implemented.
According to Supply Chain 247,

Successful SCO is based on the right blend of elements for end-to-end oversight and control, but at the root, it is driven by a desire to put the customer first.

The goal is to create a supply chain network that takes into consideration both the bottom line and customer experience.

The Benefits of SCO

By implementing SCO, you will provide a variety of benefits to improving customer satisfaction in a cost-effective way. Inbound Logistics identifies a number of trends supply chain orchestration can provide.

1. Increase Visibility

Personalization is only successful when an organization can understand the needs of their customers and deliver. SCO enables organizations to take a holistic look at their entire supply chain. Thus, they’re able to optimize their processes to delivers ‘the maximum volume of on-time, in-full orders’.

2. Optimize Inventory

An increase in orders requires organizations to ensure warehouses and inventories are abundantly stocked and ready for delivery. Therefore, experts suggest streamlining their networks which includes ‘warehouses, 3PLs, suppliers, and in-transit stock’.

3. Maintain Efficiency

As supply chains strive to meet increased demands, they become complex. This complexity may sometimes hinder the customer experience. According to their findings, Inbound Logistics found 95% of global companies agreed that discrepancies had increased. Implanting SCO would help create better processes that stimulate progression through the coordination of the right ‘internal and external systems.’

Organizations should continue to focus on creating innovative and creative ways to improve the customer experience. This is primarily important today because of the incredible level of accessibility online shoppers have. Based on the above information, supply chain orchestration proves to be an effective way to ensure a positive customer journey. Therefore, organizations should continue to look at ways such as SCO to optimize their supply chains.

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As the holiday season approaches and the expectations of efficiency and on-time delivery increases, 3PLs must optimize their solutions.

The Christmas holiday season provides many industries with the opportunity to significantly increase their revenue. By the end of this year, retail sales between November and January 2019 are forecasted to ‘top $1.10 trillion’. The reason behind the industries success can partly be attributes to e-commerce sales, which are also projected to increase 22% throughout this holiday season. In comparison to $110 billion in 2017, e-commerce sales are expected to reach $134 billion this year.

To ensure customers experience a positive shopping experience, companies are amping their game in a various ways. According to Deloitte, vice chairman of Deloitte LLP, Rod Sides, states

We’ve seen retailers continue to advance their approaches to shipping, delivery, in-store experiences and tech-enabled commerce.

Sides also defines those companies who will succeed this holiday season are those who exhibit ‘the right balance between innovation, experience and value.’

The holiday season for instance, is a prime time to shine for third party logistics providers (3PLs). By providing optimized solutions to help their clients optimize their customer journeys, 3PLs can leverage holidays to build relationships with customers.

This article by Morai Logistics discuss how 3PLs are an important service partner this holiday seasons.

Top Driver’s This Holiday Season

There are a variety of reasons 3PLs brace themselves for the holiday season. The retail sales industry is projected to prosper significantly this season, by a combination of ecommerce and brick and mortar. Consumers can complete all of their holiday shopping online, without even stepping foot into a store. An increase in convenience and accessibility also increases the ability for shoppers to purchase faster and more frequently. This places considerable pressure on supply chains to ensure:

  • On-time delivery
  • Transparency
  • Cost-effective rates
  • Personalization

However, despite the holiday season, the rise in consumer demand has been nothing short of new for 3PLs. Advancements in technology has forced organizations to compete within a saturated market of providers who offer similar services. This heightens even more during the holiday seasons as organizations must choose the best service providers for their customers. In addition to a peak in orders and next-day delivery, setbacks caused by weather can significantly impact the shipment lifecycle. Let’s take a look at the top reasons 3PLs are an important partner for organizations looking to prosper this holiday season.

Speed is becoming a primary determinant of consumer preference. By 2019, statistics show that 65% of retailers will offer same-day delivery. This transition from concept to standard practice requires companies to seek solutions that will ensure real-time operations.

Visibility

During the holiday season, setbacks in deliveries can disrupt the customer experience, especially when there is a lack of visibility. Once a consumer selects a product, they pay close attention to the shipment life cycle via tracking codes or order updates. It’s important for companies to choose organizations such as 3PLs who can offer a level of transparency that will keep their customers happy.

Efficiency

In addition to speed, another important factor that supply chains should focus on is efficiency. On-time deliveries are essential for companies competing in saturated markets. Aside from transparency, 3PLs also prioritize orders arrive as scheduled. Therefore, hiring service partners such as 3PLs is important to ensure consumers receive their product in a timely and efficient manner.

Inventory Management

For the retail industry in particular a large influx of in-store inventory is not ideal. 3PLs offer optimized warehouse management solutions and technologies that can effectively manage, track and store your stock.

Distribution Centers

E-commerce has made shopping accessible from anywhere across the globe, which increases the need to ensure consistency in order fulfillment. 3PLs often have many distribution centers spread across the country, which helps organizations house product closer to customers.

There is no denying that the holiday season is a busy time of year. Partnering with the right third party logistics provider is important for organizations looking to increase revenue and create a positive consumer experience.

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Businesses within the retail industry are rolling out vertical integration supply chain models to keep up with fast fashion.

Research on the global fashion industry predicts an increase from ‘$481.2 billion in 2018 to $712.9 billion by 2022’. Innovative technologies are a direct contributor to this progression, as they help companies create ‘experiential eCommerce’ for shoppers. For many industries, digitization is enabling companies to offer customers Omni-channels of shopping touch points. Thus, increasing purchasing power and an even greater expectation to deliver orders in an immediate and timely fashion.

Despite positive growth, one of the most influential challenges in the fashion industry is the ability to keep up with ‘fast fashion’. Fast fashion is an industry buzzword, that is defined as,

An approach to the design, creation, and marketing of clothing fashions that emphasizes making fashion trends quickly and cheaply available to consumers.

The New York Times states that ‘faster fulfillment’ is becoming increasingly important to ensure customers remain happy. The idea of getting product from the manufacturer or store-front to consumer in a timely and speedy process is integral. To help roll this forward, brand name organizations, such as Zara and H&M, are implementing a vertical integration (VI) supply chain model. Their hope is to ‘enable faster decision-making’, while also improving the overall customer experience.

This week, Morai Logistics looks at the benefits of a VI supply chain model, and why it’s becoming increasingly adopted by companies within the retail space.

The Fashion Industry Today

The fashion sector faces three main challenges today, which include an increase in consumerism, the need for creating unique customer experiences and inventory management. Finding one solution to meet every need is unlikely, which is causing retailers to consider shortening their supply chains.

According to Logistics Bureau, the conception of ‘fast fashion’ was influenced by Zara, a leading European clothing brand. Fast fashion is a category management concept that helps this global retailer meet the demands of their customers looking for ‘high-fashion style articles of clothing at a low price’. It enables fashion companies the opportunity to consistently roll out new products into their stores. This helps support seasonal and trending lines that are constantly changing throughout the year. However, if the wrong integration model is implemented, it can be challenging for companies to meet these demands.

Vertical Integration Supply Chain Model

Traditionally, horizontal integration has been the ‘go-to value chain strategy’. Companies looking to grow their business ‘at the same point within the supply chain’ follow this model. However, the fashion industry requires a highly agile supply chain that takes into consideration both speed and cost. In this case, vertical integration supply chains are the most effective.

By definition,

Vertical integration occurs through the merger or acquisition of companies at different stages of production or distribution within the same industry.

To accommodate and support the demands of fast fashion, this integration model helps to strengthen the supply chain. In addition, it addresses the above challenges by giving retailers a competitive advantage over other companies that haven’t adopted an integration model. It also enables them to offer ‘lower costs, high-quality and personalized products’, which ultimately positions their company as a top choice to consumers.

In addition to the differentiation, this model also benefits companies in the following ways:

  • Control of value chain
  • Reduction of distribution costs
  • Increases ‘access to more production inputs, distribution resources and process and retail channels’
  • Alignment of pace with changing fashion trends

As retail companies continue to roll out new products, they must develop processes that execute both speed and cost. Therefore, vertical integration can help companies create strong, agile and proactive supply chains that will meet changing consumer demands.

Morai-Logistics-AR-VR

Augmented reality (AR) and virtual reality (VR) are ‘revolutionary’ emerging platforms that are changing the game for supply chains.

From reducing cost to improving efficiency and accuracy, AR/VR could significantly impact the way orders are processed and shipped. The Global Augmented and Virtual Reality market is expected to reach ‘209.2 billion U.S. dollars by 2022’. With the ability to enhance any version of reality, this technology could change the way we move product from point A to B.

On the retail side, AR/VR is enabling customers to engage with products and their features without even stepping foot into a store. It also provides personalized experiences through the creation of ‘virtual fitting rooms’ and ‘virtual maps’. From a marketing and advertising perspective, there is a considerable amount of value that comes from the creation of ‘VR- and AR-powered campaigns’. It provides companies with the opportunity to give their consumers a real-time experience with their products.

In addition to machine learning and predictive analytics, AR/VR technology is also a game changer for the supply chain and logistics industry. From improving training and education, to ensuring a ‘cost-effective, fast and error free’ shipment lifecycle, there are significant benefits.
This article explains the technology behind AR/VR and uncovers how supply chains can use this platform to improve their processes.

A Brief History

Although AR/VR has become popular in the digital world only recently, the concept behind augmented reality dates back to 1957. Cinematographer, Morton Heilig, created the first ‘attempt at adding additional data to an experience’ known as the Sensorama. Almost four decades later in 1990, researcher Tom Caudell, creates the term we refer to now as augmented reality.

According to Investopedia, by definition,

Augmented reality combines real and computer-based scenes and images to deliver a unified but enhanced view of the world.

Virtual reality takes the experience once step further for users by immersing them in a ‘fully artificial digital environment’. Rather than simply enhancing a version of reality with images, they can actually move and hear. VR applications are also compatible with smartphones, which provides consumers with new and convenient ways to shop nd interact. With the ability to create accurate and immersive versions of reality, this technology provides the opportunity for supply chains to improve their processes and operations.

AR/VR in Supply Chains

As the expectations of on-time deliveries, efficient service and personalized customer experiences increase, there is a need for more supportive technology. According to Forbes, AR/VR help combat the varying complexities facing the supply chain and logistics industry today. As mentioned, this is a cost-effective solution that could also contribute to creating ‘fast, and error free’ shipment lifecycles.

The following scenarios describe how AR/VR can improve supply chains:

  • Provides real-time information on ‘manufacturing facilities, distribution centers, and warehouses’.
  • Delivers products on-time by providing the best transportation routes.
  • Reduces the possibility of damage by providing detailed information of all packaging and contents to improve transparency.
  • Reinforces security by providing drivers with ‘facial recognition technology’ to confirm customer verification.

Industry Reviews on AV/RV Technology

Mehdi Miremadi, Partner at McKinsey & Company, states that this technology creates ‘business value in supply chains’. In addition, statistics show that order fulfillment saw a 30% – 40% improvement last year, while productivity and workflow management also progressed. Senior Principal Analyst at Gartner, Tuong Nguyen, also supports this technology, as he believes AV provides effective training and onboarding to enhance worker capabilities.

The decision to apply an emerging platform to any organization is daunting. There is a lot of consideration that must come with the investment and integration of new processes. However, when applied to supply chains, experts are in favour of AV/RV.

morai-blog-ebook-supply-chain-sustainability

From meeting consumer demands to building credible and corporately responsible brands, Supply Chain Sustainability (SCS) is integral to an organizations success.

In addition to achieving transparency, flexibility and speed, supply chains must also consider sustainability as a top priority. SCS encompasses the economic, social, legal and most importantly, environmental features of a supply chain. It helps reduce an organization’s carbon footprint, and also ‘builds brand awareness, mitigates risk and develops long-term profit opportunities’.

As Omni-channel transportation relies on a variety of transportation methods that release emissions, skeptics may argue that it’s very challenging for a holistic supply chain model. However, statistically “almost 90% of CEOs believe that sustainability is important to their companies success.”

This eBook by Morai Logistics, takes a comprehensive look at supply chains sustainability and identifies the benefits it provides organizations.

Integrating Sustainability Into Logistics and Supply Chain

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That’s it for us this week! If you liked this blog post, why not subscribe to our blog? Interested in what we do as a 3rd party logistics provider? Then don’t hesitate to check out our services (as expressed above, we are very pro finding you the lowest total cost!). We’re also in the twittersphere, so give us a follow to get the latest logistics and supply chain news.