CeMAT Insider

How a dynamic supply chain can help you make smarter decisions

Posted by CeMAT Team on 05-Aug-2016 12:41:08

CeMAT-Insider-enabling-a-dynamic-supply-chain-through-digitisation.png

Digitally-enabled technologies are drawing attention across industry because of the value they provide users. The nexus between products like smart cars, and data tools and analytics technologies, has spurred innovation within Industrie 4.0, and it's gaining global attention.To give you just one example of how the world of shipping will transform, DHL recently signed an agreement with German car giant Daimler to directly deliver packages to the trunks of smart cars. Transaction numbers will be generated in an app that then notifies the delivery driver where to go and in some cases, allow them access to the inventory in the trunk within a certain time-frame.

CeMAT-Insider-quote-14.pngThis is a great example of how data and technology are converging to create new and innovative ways of delivering goods to an eCommerce driven market. The service will be rolled out if customers use the service enough, but it would be great for inner-city, same-day shipping.

Investing in digital technologies for sales marketing, business development processes and, more increasingly, learning to optimise logistics networks is generally attractive to most business because their return on investment often saves them time, money and resources.

This is why we’re seeing more and more examples of digitisation of businesses, because even something as simple of switching to e-invoices could save your business thousands of dollars in the long run. And that is what digitisation is all about.

Digitisation is a process by which you move all aspects of your operations online, including procurement, invoicing, approval cycles and payment procedures.

This post will look at how digitisation can help you make smarter decisions for your business by creating a smarter way to manage logistics that taps into real-time data, and then it looks at why knowing your customer should be the focus of your digitisation strategy.

 

Creating a smarter supply chain through digitisation

Not having proper visibility of inventory is considered a nightmare to many business owners today. We are in the midst of a materials handling and supply chain evolution, where demand for cheap and fast shipping is putting pressure on businesses to find unique solutions that deliver without costing the earth.

CeMAT-Insider-quote-15.pngThis may sound like an unsurmountable challenge to many business owners, but this doesn’t have to be the Achilles Heel of your Hercules operations. The solution is to simply be smarter with your operations, and luckily, digitisation is a great way to get more bangs for your buck.

We now live in a digital economy that is consumed by the whims of the customer; customers today want what they want, when they want it, and if you can’t deliver it, they’ll simply shop elsewhere to get it.

Sounds harsh? Yes, but not impossible to handle.

Cloud-computing, mobile technologies and data analytics can now be integrated into your supply chain. Not only have all these capabilities matured over time, but they are cheaper than ever to access and are poised to spur on a major digital revolution. 

The next two sections will look at how this will occur, through better decision making thanks to new insights given from data, and how understanding your customer will enable you to innovate in the same manner as DHL. 

 

Making better decisions with data

Access to real-time information that is pooled from advances in the Internet of Things (how devices are connected to the Internet to create new data sets), has given business owners and logistics professionals clear visibility into their logistics network. This information gives you the ability to drill down into your operations in a granular sense, from the individual SKU, to more general information such as inventory movement through the year.

CeMAT-Insider-quote-16.pngGaining these unique insights from data can inform and drive improved logistics performance. The real value of data comes from its ability to apply analytics; the predictive, prescriptive, cognitive and event-processing capabilities that can transform your operations.

Achieving visibility of your ecosystem will give you the power to respond to challenges minutes or hours into a situation, rather than waiting for days or hearing about it after the fact. It sounds easy on the outside, but achieving 100% end-to-end visibility is still something many businesses are striving for.

A 2015 supply chain survey revealed that only 70% of the respondents had real-time status updates for half of their information. Worse, 82%t said it would take days to understand the impact of an extreme global weather event. 

When integrating a digitised logistics network, you should aim to integrate silos from within the business. Getting a digitised mindset means that you should no longer have separate islands of information; everything should feed back in to each other, including:

  • Online shopping portals
  • Demand planning
  • Supplier management portals
  • Product development
  • Logistics management

Integrating all of the above will give you greater visibility in what you can deliver. For example, integrating product development with logistics management will mean you’ll know when you can resupply goods to customers, and when they will be delivered by. Not understanding when you can deliver something might mean you lose sales to businesses that can deliver faster and more cheaply.

 

Know your customer

To create innovate shipping options such as DHL’s smart car delivery partnership, they would have had to do deep analysis into the behaviour and preferences of their customers. In this case they may have found that when people shop online, they are generally abiding by the idea of instant gratification – that humans are hardwired to want things...now.

We here in the CeMAT office believe this is one of the reasons why the new DHL announcement will be such a success; because people shopping online with the option to have something delivered to them in hours will continue their impulse to buy. Whereas waiting a week or more for their goods might get them to abandon their cart.

But as we know, there are all different kinds of customers. Some customers prefer security and will pay for expensive, over fast shipping, some customers expect cheap returns, and some customers like free samples with their purchase. Whatever it is your customers want, it would benefit you deeply to find out what it is and then give it to them.

There is also no point flogging a dead horse. You may be wasting resources by providing a service to your customers that they don’t actually want or need. For example, something like the ASOS free return policy probably wouldn’t work very well for a business that ships large bulk items.

The end goal of digitisation is to create an ultra-efficient supply chain that can also deliver superior value to customers. If you can tap into your customers preferences, and deliver it to them efficiently through your digitised supply chain, you’ll earn their trust and be seen as a reliable provider.

 

Conclusion

There is no better time than now to digitise your operations. The development and maturing of technologies that tap into IoT and real-time data make it possible for you to react to challenges in your business and create value for your customers that can’t be beat by your competitors.

Digitisation is the process of moving all your logistics operations online to save your business time, money and resources, and in today’s competitive market, doing this sooner rather than later is really the best option.

Topics: Supply Chain Management, Logistics Automation