CeMAT Insider

Are legacy systems holding back your supply chain management?

Posted by CeMAT Team on 13-Jan-2016 14:34:16


Efforts to stay abreast of changing consumer behaviour are presenting many businesses with an intralogistics conundrum; how can organisations balance fast and efficient delivery times, while also minimising costs?

Businesses are currently under the gun to maintain a competitive advantage when it comes to fast delivery, but many supply chain solutions are often not prioritised when upgrading business intelligence systems. The below will outline how your supply chain management can impact the success of your ecommerce endeavours.


The case for modernising legacy systems

The intralogistics market is in full development, and ensuring your supply chain is modernised or upgraded can assist your business in keeping up with the demand for ecommerce and retail.

There is a big case for modernising legacy systems, as maintenance costs for older systems can become very expensive. If your business is supported by a system that has been written and developed in a fading language, such as Cobol, maintenance costs running into the future will increase as these languages are phased out.

Secondly, businesses that have grown through acquisitions or mergers are left with a complex web of loosely integrated IT infrastructure. In these cases, standardisation is difficult to establish and interoperability can be expensive and time consuming to implement.

And lastly, many legacy systems are simply not built for omni-channel, high volume ecommerce, and many businesses are finding that they require more flexibility and scalability to deal with this new era of trade.

Ensuring your supply chain provides you with a high level of agility by accommodating increases in ecommerce single orders is probably one of the most important details to get right for increased business growth. Next we’ll look at the benefits of upgrading legacy supply chain tevhnology, and how modernisation could dramatically change your operations.


Benefits of upgrading legacy systems

It may be a difficult task modernising legacy systems, however, the benefits are sure to outweigh the negatives for your business. The following benefits should help you decide if it’s time to upgrade your supply chain system.

Optimising efficiencies and processes within your supply chain can produce great ROI for your business. Being able to forecast demand, optimise operational constraints and synchronise inventories will put your business at a competitive advantage, ensuring you don’t lose sales or customers to slow delivery times.

You can also reduce logistical costs by reducing manual errors through electronic data interchange (EDI), while also streamlining the management of inventory storage and distribution. Ecommerce fulfilment automation can dramatically reduce handling and packaging costs, labour costs, while also improving order fulfilment accuracy.

Consumers are constantly on the look for the lowest price and fastest delivery time, and businesses that can’t deliver efficient services are putting themselves at a great disadvantage. Delivering better customer service and improving the strategic direction of your company by modernising your supply chain management systems can provide the intangible benefit of improving customer retention and gaining customer trust. Below we’ll take a look at iHerb and how they successfully upgraded their ecommerce fulfilment automation to better serve the needs of their customers.


Using iHerb as a case study for success

iHerb, one of the world’s largest internet retailers for healthy and organic products, recently made worldwide logistics news when they upgraded their warehouse and software systems to ensure faster delivery times.

iHerb has 35,000 different SKUs all managed through automation technologies. Bastian Solutions created iHerb’s material handling system, and you can read more about the methods and technologies being used here, but we’ll give you a short run down of the biggest changes they implemented.

If iHerb receives 20 different orders of the same product, their supply chain management system is able to pull those products in one go, rather than taking 20 different trips to get the same product. Sound like a small detail? This automation strategy saves time and money, and ensures consumers receive their orders on time by reducing intralogistics delays.

iHerb used a combination a their new fulfilment centre in Hebron, and upgrades to their software to ensure everything runs smoothly with the least amount of errors possible. If you’re planning on investing in a new supply chain management system, it would be worth taking time to research what software you require to integrate all your business processes.



An increase in smaller orders and a demand in ecommerce is presenting many business with the challenge of upgrading legacy systems.

Legacy supply chain systems may not always be equipped for omni-channel business models, and are often expensive to maintain if they run on dated coding languages.

The benefits of upgrading your supply chain technology including reducing handling and distribution costs, improving efficiencies and reducing errors.

These are just some of the topics that will be discussed at CeMAT AUSTRALIA 2016, taking place from 12-14 July 2016, subscribe for updates so you receive the latest information on the exhibition and the latest case studies and articles on intralogistics.



Topics: Supply Chain Management