SUPPLY CHAIN MANAGEMENT - THE KEY FACTORS SHAPING IT TODAY – PART 2Supply chain management has undergone significant change in recent times due numerous external pressures—these are 4 more key elements shaping it today.

When there are dramatic changes in the supply chain, there has to be an equally robust response. That is the challenge supply chain management has had to face over the past year and in recent years generally. Supply chains live and die by how they respond and adapt to the ever-changing environment around them. Quality management involves finding the most pertinent facets of that environment and growing supply chains around them.

This article by Morai Logistics highlights several more prominent factors that are influencing supply chain management today.

Not as Competitive as Before?

Typically in the area of supply chain, competition is continually escalating. As technologies supporting supply chains get more powerful and ubiquitous, the stiffer competition gets. When applications exist that help supply chains become more efficient and productive, costs go down and profits up. Yet, despite this being the case, it’s not quite as simple as that.

There’s another consideration that greatly changes the competitive landscape, that being trade barriers. Given the state of trade disputes (particularly between a certain two giants on the global stage), competition is actually being driven down for many companies. Especially companies operating in nations with lower wages. As such, supply chain managers have to worry a little less about competition but a great deal more about the downsides of trade conflict.

Mass Movement to Urban Areas

Urbanization is hardly anything new. It’s a trend that has been taking place gradually over decades. Nonetheless, it is more relevant now than ever. Perhaps that’s because it’s reached something of a critical mass in order to drive monumental changes in supply chains. For example, the greater number of warehouses in cities that exist to accommodate the need for timely deliveries. Even if the pandemic has somewhat slowed this trend due to the rise in remote work, it remains a massive consideration for the way supply chains continue to be managed.

Greater Presence of Automation

In regards to automation and the supply chain, the question is: how much? Automation—and corresponding to it, the increase in the usage of robotics—is already a large part of supply chains. So, now what supply chain managers are going to have to consider is just how much larger that part is going to get. The balance between human and automated workforces seems to have reached some sort of equilibrium for now, despite previous concerns. However, if vehicles become fully autonomous, can that continue? It is this expanding role of automation that leadership will have to grapple with going forward.

The Need for Big Data

Finally, there’s the ongoing need for big data for quality supply chain management. Central to this necessity is artificial intelligence (AI), particularly machine learning. Machine learning grows more precise with more quality data. Machine learning has a number of functions, but perhaps its most critical is in its bolstering of supply and demand planning.

An article by Forbes further explains,

Over time, many more data inputs have been introduced into the demand planning process, and many companies are doing far more forecasts across different time horizons, products, and ship to locations. Supply chain planning has always been a Big Data solution. But machine learning works better the more data there is. SCP is becoming a Giant Data solution.

Supply Chain Management - The Key Factors Shaping it Today - Part 1Just as the dimensions of supply chain have transformed, so has supply chain management in response to them—here are the biggest forces influencing it today. 

The supply chain landscape has seemingly undergone a seismic shift over the past year. Yet, much of what the pandemic has spurred on isn’t a shift in supply chain trends but rather an acceleration of them. Nonetheless, supply chain management has had to respond to this changing landscape, regardless of nature of the changes, as strategies that might have been on the horizon prior to COVID-19 are now imperatives for survival.

This article by Morai Logistics covers several of the most significant factors that are influencing supply chain management today.

The Ecommerce Boom

The growth in ecommerce has been astounding. For years it’s been rapidly rising. In 2020, that already incredible growth became even greater. This, of course, has implications all the way through supply chains. One more obvious implication is that managers have to put more emphasis on last mile solutions.

However, there are other less straightforward considerations they need to be mindful of, such as automation. The use of autonomous technology in warehouses has become even more useful. This is because they foster even greater productivity and, with concerns regarding the spread of COVID, they reduce human involvement.

The Need for Precise Personalization

Catering products or services as precisely as possible to the customer has become amongst the most vital components of quality supply chains. With digital transformation becoming the new norm for companies, it’s allowing management to harness the necessary technology (such as customer data platforms) to finely segment their customers and serve them accordingly. This means manufacturing itself as to be responsive and flexible too.

As a Forbes article on supply chain megatrends outlines,

Manufacturing automation…is making it easier to create many, many more product variants. Companies are beginning to explore on-demand manufacturing rather than traditional manufacturing models, meaning they can keep less physical inventory on-hand. Using a digital representation of parts allows manufacturers to make small changes to digital files quickly…

Supply Chain Softwares Hosted on Clouds

Modern supply chains need a variety of cutting edge softwares in order to stay competitive. What this has resulted in is more and more companies looking to cloud computing to host these applications. With the ability to implement and integrate new softwares quickly and scale operations accordingly, the cloud means managers have more solutions on their plate than ever before.

The earlier mentioned article by Forbes explains,

Covid-19 has also proven that cloud-based solutions can be implemented with far fewer consultants located at the customer’s site. Supply chain software suppliers have told me that in terms of implementations, Covid-19 was mostly a non-event; pivoting to remote implementation consulting was not that difficult.

IoT and Supply Chain Tracking

IoT’s had an increasingly critical role in supply chains in recent years. Their presence is only going to get stronger. In this case, it’s not a result of the pandemic. Rather, it’s because of the next generation of the internet becoming more widespread. As 5G becomes more widely available, supply chains can connect more devices to it.

It’s up to managers to evaluate how they can best utilize a more connected supply chain that has continuous real-time data available from various stages in the chain. If used the right way, IoT having a stronger role in the supply chain could mean better tracking of operations, the state of inventory, and more. Additionally, it could also mean greater visibility and thus transparency of the entirely chain.

Forecasting - Getting Your Supply Chain Forecasting on Track in 2021Supply chain forecasting is the difference between data-driven decision-making and floundering in the dark—here’s how companies can ensure theirs is as good as can be in 2021.

Prior to the pandemic, companies had a bit of wiggle room in regards to their forecasting. Despite being important, a relatively stable market meant they didn’t have to be on the cutting edge. Instead, they could largely rely on historical trends to shape the management of their inventory. Then everything changed. Forecasting was made more critical than ever in an unpredictable 2020. With COVID-19 related disruptions persisting, it’s crucial that companies that were lagging behind give their forecasting procedures a much-needed update.

A Forbes article on improving forecasting explains,

If legacy forecasting models were out of date before, they’re practically obsolete now. In 2020, it became clear that the old models cannot keep up with the shifting demands of a highly interconnected global economy.

This article by Morai Logistics breaks down what companies should be doing to make sure their supply chain forecasting is as effective as possible.

No More Legacy Models

As you might’ve guessed given the above quote, legacy forecasting models have to go. They’re outdated and bear little relevance to consumer behaviour today. What’s more, they present a number of vulnerabilities that are difficult to combat without modernization. These include: data silos, inflexibility, blind spots, and more.

Utilizing New Data is Key

2020 was a game-changer. Consumer behaviour was as unpredictable as its ever been. As such, relying solely on data that came prior to, or even during, the year is going to lead to poor results. In order to overcome this, companies need to look outside of their own data. Not only that, but also to have as many points of data as possible.

As a McKinsey article from late last year emphasizes,

Because the market has changed so much from the prepandemic status quo, using a company’s historical data to forecast a trendline won’t work. Developing an accurate forecast requires building a new baseline based on the external data that affects a company’s business. This approach allows companies to build models by combining proprietary historical and pipeline volumes with hundreds of external data points…

Prepare for Multiple Outcomes

One of the many things that hurt supply chains last year was a lack of agility. Often faced with the need to pivot and change their operations, companies stalled rather than proceeded. Ensuring flexibility in the planning process goes a long way towards preparing supply chains for whatever’s to come. In order to do this, forecasting should be applied to a wide range of possibilities. In turn, companies can then come up with a game plan for a large variety of outcomes and have protocols in place to smoothly pivot as necessary.

Time for Intelligent Forecasting

Ultimately, companies have to make their forecasting as intelligent as possible. As supply chains get increasingly digitized, it only makes sense that their forecasting should too. This means forecasting should be a part of larger interconnected, fully integrated supply chain system. A system which consolidates all company data, presents it holistically, offers a real-time view of all segments of the supply chain, and utilizes the latest in artificial intelligence and machine learning to gain the most accurate insights possible. Forecasting, in the midst of this digital landscape, can then be lead by the best data available.

COVID-19 and the Future of Supply Chain - What to ExpectCOVID-19 has forever altered the supply chain—here are several ways in which supply chains are reorienting themselves going forward.

The pandemic has dramatically impacted supply chains, and that, in turn, has led to dramatic transformation. The past year has seen developments in the supply chain at speeds never seen before. As should be expected, not all the things supply chains are doing now are greatly divergent from what they were doing before.

Rather, top supply chains have embraced a combination of best practices, old a new. In some areas, they’ve simply placed a change in emphasis in their operations. In others, they’ve sped up processes that they already had underway. With that said, it’s important to review what supply chains are doing now, to what degree that they are different than before, and how companies hope to see them look soon.

This article by Morai Logistics outlines the numerous changes supply chains are experiencing and the ways in which they’ll look different in the future.

A New Focus

In a pre-pandemic world, while still potentially risky, focusing on making a supply chain as lean as possible made some sense. In a world shaken by disruption, it no longer does. Of course, having minimal waste in a supply chain remains important, but resilience and, by extension, agility is a great deal more.

As such, companies are now trying their utmost to make their supply chains agile. Sufficiently so to respond to whatever unforeseen hurdles come their way. This means being able to pivot quickly and effectively, without impeding their operations. What arises from this kind of flexibility and responsiveness is a resilience to unpredictable external pressures.

A Different Approach with Suppliers

One of the most notable vulnerabilities that COVID-19 highlighted is the reliance on single suppliers. When many of these suppliers were rendered near-useless by the pandemic, supply chains were left scrambling. Thus companies have been combating this shortcoming.

This has included them diversifying their supplier base, taking on a “China plus one” strategy in order to no longer have dependence on China, as well as considering moving away from overly globalized supply chains and moving to regional ones. It’s yet to be seen how significant any move away from China or more globalized supply chains will be. Nonetheless, diversification certainly has seen greater traction than before.

Visibility and Transparency Only Grow More Important

As mentioned earlier, many of the most important areas of concern for supply chains now were already getting plenty of attention prior to the onset of COVID-19. Two of those are visibility and transparency. In large part, they’re getting even more notice now because they can reveal risk.

An article by Supply Chain Management Review offers insights from a recent supply chain strategy survey,

Manufacturing executives are taking prudent steps to manage risk in their supply chains, with strengthening relationships and increasing transparency with suppliers and buyers … In addition, the vast majority (92%) are taking at least some action to create more visibility within their supply chains, including requiring more information on suppliers’ own risk management and continuity strategies.

Innovation is Central

The advantages that come with technology have always been something that companies have looked to. Yet, now, companies are adopting technologies which they were once simply showing interest in. Or, adopting technologies that they were already planning to, just faster than before. In short, they’re acting  quickly. Automation, softwares for supply chain management, or tools for visibility and real-time tracking. They’re all seeing greater usage in supply chains than before.

The Modern Warehouse - 5 Ways They Have EvolvedThe warehouse has undergone significant change in recent times—here are the 5 most significant ways in which it has evolved.

The supply chain has changed drastically over the years. With evolving customer demands and corresponding technological and logistical advancements to match them, it’s in a state of continual progress. No piece of the supply chain embodies that progress more than the warehouse.

As such, warehouses have seen monumental development recently. This development has come, in large part, due to the e-commerce boom that has characterized the 2010’s. With the rise of e-commerce has come a number of pressures, often stemming from warehouses having to accommodate greater demand. So, just how has warehousing altered itself in order meet these new challenges?

This ebook highlights 5 of the most prominent ways in which the warehouse has transformed in recent years.

What Does the Modern Warehouse Look and How has it Changed?

morai_ebook-modern-warehouse--cover

That’s it for us this week! If you liked this blog post, why not subscribe to our blog? Interested in our 3rd party logistics services? If so, don’t hesitate to check out our services . We’re also in the twittersphere, so give us a follow to get the latest logistics and supply chain news.

Supply Chain Technology - 5 Indicators That it's Time for an UpdateThe speed at which technology within the supply chain progresses is, at times, hard to keep up with—here are 5 key signs that a supply chain needs to modernize. 

Technological advancements are taking place in the supply chain all the time. In light of the transformative nature of the past year, staying abreast of those advancements is more important than its ever been. A technologically modern supply chain is what stands between a company running smoothly regardless of external pressures and it being crippled by every disruption it faces.

This article by Morai Logistics covers 5 of the most significant indicators that reveal that a supply chain needs updating in terms of its technology.

Transportation Costs are too High

One of the main issues supply chains face when they’re suffering from a lack modernization is high transportation costs. These high transportation costs, is turn, limit profits. The reason that they’re a mark of out of date technology is because now transportation management softwares exist. With them, companies are able to greatly improve the efficiency of their transportation processes, reducing costs.

As a post from BluJay Solutions explains,

You already know that transportation takes up a big chunk of doing business. Cutting and controlling these costs is a key to surviving and thriving. A modern transportation management system, such as BluJay’s Transportation Management, leverages data to help make better decisions in the moment and works over time to pinpoint opportunities for long-term savings.

Struggling with Visibility

The modern supply chain has visibility throughout its operations. With fully integrated supply chains, smart sensors, data being collected continuously for real-time insights, and so much more, companies now have the ability to always have a view of all stages of their supply chain. Moreover, this means they’re able to give their customers precise updates about their deliveries. Thus, if companies find themselves having trouble meeting their customers’ expectations as a result of not being able to provide them regular shipment information, it’s a strong suggestion that they’re lagging behind.

Having Difficulty Taking Advantage of Opportunities

Often, as the market changes, new opportunities arise. However, to sufficiently take advantage of them, quick and flexible responsivity is required in the supply chain. If a company finds itself repeatedly having trouble pulling the trigger in time, it needs overhauling. Similarly, if it doesn’t have the infrastructure to pivot to even attempt to address the opportunity, it needs a revamp. What these failings point to is a supply chain that lacks agility. Agility that comes hand in hand with technological proficiency.

Difficulty Dealing with Pre-existing Technology and Data

The integration and consolidation of data is critical to the smooth function of an up to date supply chain. It is crippling to a supply chain to be run with old digital tools that can’t interact with each other. They lead to information silos and are difficult to utilize competently. What’s more, even if the tools are used, they are limited in their scope and applicability.

An article by Supply Chain 24/7 lays out this regrettable scenario,

Only two people in the world understand your system, and they’re both about to retire. Hopefully you aren’t still relying on legacy, custom-configured technology, because if you are, odds are the people that built it will be retiring soon. Take a proactive approach to sunsetting the technology before the people who understand it aren’t around to maintain it, and you’re left with a system that could become a black box with your data locked inside.

Inventory Management Shortcomings

Very much like transportation costs, high inventory costs are also a strong sign that a supply chain needs upgrading. By having the earlier mentioned technologically augmented visibility to keep track of incoming shipments, companies can stay well stocked. On the other hand, without visibility, inventory management becomes an imprecise and costly operation.

Top 10 Supply chain trends for 2021 - Part 2After such a hectic and transformative year for the supply chain, 2021 is finally around the corner—here are the biggest trends to keep an eye on going forward.

So much has changed in the world of supply chain over the previous 12 months. With the onset of the COVID-19 pandemic, supply chains were forced to dramatically reorient themselves in order to survive. In a landscape altered by such a global event, which is still actively impacting the running of supply chains today, the changes are going to continue going into next year. Last week, we highlighted the first five most significant trends we are anticipating in the near future. Yet, there remain many more movements in the supply chain to watch out for.

This article by Morai Logistics completes the top ten trends that will shape supply chains in 2021.

Increases in Third-Party Logistics (3PLs)

Companies are always looking for ways to reduce the cost of their supply chains. If they can do so while improving its quality then all the better. Next year should see more companies looking to third-party logistics in order bring down costs, delivery times, and improve customer service.

An article from Finances Online further explains,

Partnering up with third-party services can help companies reduce costs while improving customer service. For instance, more businesses will integrate and start to offer inland services, reducing overall freight costs, and streamlining the supply chain. Integrations are particularly useful for shippers who often use a combination of sea and land transportation for their products. With integrated services, delivery times become shorter, and customer service improves.

An Elastic Logistics Surge

What’s become clear with the monumental disruption that the pandemic has brought is that supply chain efficiency isn’t enough. In order for supply chains to be able to survive in the current climate, as well as be resilient against further disruptions down the line, they have to be flexible and adaptable enough to deal with whatever fluctuations the market brings them. This more malleable approach is elastic logistics. Logistics made to make supply chains responsive enough to shape themselves around demand.

Further Adoption of IoT

As mentioned in Part 1, visibility throughout the supply chain is one of the highest priorities for companies. A large part of that effort to achieve such visibility is via the continued adoption of IoT devices. Certainly, IoT has already become a prominent part of supply chains. Yet, that prominence is set to grow even further, as companies look to IoT technology like sensors to give a complete and continuous view of their operations.

Artificial Intelligence (AI) Driven Automation

Automation comes in many forms. One of those forms (automated robots) was covered in Part 1. Another kind of automation that is becoming increasingly critical to the supply chain is automation facilitated by AI. One of the main reasons AI is playing such a big role in automation is that it can automate certain supply chain processes via algorithms based off previously collected data. This means the removal of human error and, thus, boosted efficiency.

Agility will be Paramount

Finally, as suggested in the Elastics Logistics section, there has been something of a realignment of supply chains this year. Supply chains can no longer prioritize being lean over everything else. With ongoing, and the possibility of future, large scale disruption hanging over supply chains, it’s become clear that agility comes before everything else. An agile supply chain means a supply chain that is able to quickly adjust its operations to respond to market pressures. That’s the supply chain of the future.

Top 10 Supply Chain Trends for 2021 - Part 1As a tumultuous year marked by supply chain disruption comes to an end, eyes turn to 2021—so what are the biggest trends to watch out for heading into next year?

It’s been a year of incredible turmoil and, subsequently, change. This has been especially true in the world of supply chain. Supply chains were hit very hard by the COVID-19 pandemic and were made to aggressively transform their operations in order to survive. As such, the year has seen them experience digitization at a rate unlike ever before. Moreover, their has been a strategic pivot from efficiency at all costs, to agility in order to bolster resilience. Now, as a new year fast approaches, the question becomes: how will these many changes shape supply chains going forward?

This article by Morai Logistics highlights 5 trends that will influence supply chains in 2021.

Environmentally Responsible Supply Chains

The push for green supply chains has been strong for years, and next year will be no different. More than ever before, customers expect the companies that they buy from to be responsible in regards to the environment. Not only that, a majority of them are willing to pay more in order to support products that are.

Thus, by taking their supply chains green, companies not only work towards bettering the environment but also gain more loyal customers. Not only that, but it has the added benefit of positively affecting company culture and reducing waste, improving profit margins.

The Automation of Robots

Automation and robotics have been tremendous forces of productivity in the supply chain in recent times. As automated robots are able to uniquely assist various sections of the supply chain, they’ve staked a claim for being a required component of quality supply chains. With that in mind, it’s hardly surprising that their adoption will only continue at higher rates than before in the future.

An article from Finances Online provides an overview of many of the most valuable capabilities of automated robotics,

More companies today are using drones and driverless vehicles to streamline logistics operations. Companies and consumers can expect drones to become fully capable of making deliveries of small goods. Self-driving cars are also likely to be more advanced by 2020 … In warehouses, autonomous mobile robots will see more use in speeding up menial, labor-intensive tasks … robots can drastically improve the supply chain’s productivity.

Blockchain Growth

Blockchain technology, despite a lot of buzz, has seen slow adoption. Given the many concerns around it, including whether it’s truly scalable in its utility, the hesitation has been understandable. Yet, as visibility remains a major priority for companies, the technology is becoming hard to deny. More and more, companies are viewing it as a central piece in their supply chain visibility. With this being the case, blockchain saw considerable growth this year, and that growth should continue in 2021.

Emphasis on Transparency

Tied to both sustainability and visibility, is supply chain transparency. Customers want to know the consequences of a company’s supply chain when buying its products. These consequences range from their environmental impact to their working conditions. In response to this, companies are looking to find ways (including the aforementioned blockchain technology) to give customers a transparent view of their supply chain operations and their outcomes.

A Globalized Workforce

The workforces of companies are changing. Already research shows that 80% of manufacturers have multinational operations as of this year. The main reason for this comes down to skills. Companies have skill gaps that they have to address, and limiting workforces to a single country hurts their ability to gain access to that necessary skilled labour. With this being the case, the multinational workforce trend will remain strong in 2021.