COVID-19 has shown the world how important the supply chain is. It’s shown supply chain professionals how critical supply chain resilience is in the face of disruption. As we face logistics planning for the year-end and 2021, professionals are looking at how to manage ongoing shifts and answer consumer demands with modern, digital logistics solutions.
The reason to start now is that it takes time to test and implement the systems and best practices that can improve fourth-quarter results. And, it’s not too late.
To help you select those improvements, here are five of the biggest lessons from modern supply chain innovations and digital logistics solutions.
1. Verify if “what’s always worked” is still useful
In a conversation with Rodney Manzo, Founder and CEO of Anvyl, it became apparent that industry norms and standards are shifting much more rapidly than in the past. Not only did the coronavirus pandemic teach us that supply chains need greater flexibility, but planners have realized that some institutional knowledge and practices weren’t designed to support that flexibility.
Managing and mitigating disruption requires a proactive approach. Organizations must look upstream and downstream to determine if something is hindering the ability to scale or operate flexibly. Verify the capabilities of all partners, including how they can adjust when demand forecasts are wrong.
Managing and mitigating disruption requires a proactive approach.
In 2020, we saw with unprecedented magnitude that standard practices and fixed expectations can go out the window in the blink of an eye. It only takes one significant disruption for forecasts to become unrealistic.
Given the uncertainty surrounding Q4, more year-end planning will let flexibility take precedence. Rigidity and more traditional methods are predictable, but not helpful when uncertainty is so high. Review how COVID-19 impacted your operations so you can identify business shifts and potential weak points where operations can break down.
Properly addressing those challenges and adding flexibility to your supply chain puts you in a better position to manage future challenges that go beyond traditional demand increases.
2. Get technological ducks in a row early
The future of the supply chain is tech-heavy. This is visible in trends ranging from the rise in eCommerce and two-day shipping demands to brick-and-mortar locations also operating as warehouses to smarter warehouse censors and prescriptive analytics. Technology is changing how logistics planning is done.
For many operations, new platforms can ease Q4 challenges around demand increases, omnichannel orders, and higher rates of customer service requests, refunds, and returns. If you’ve been able to integrate a tech-enabled supply chain vertically, you can see when a particular component goes down. This improves your ability to identify and respond to issues, minimizing the impact on distribution and fulfillment. A smart starting point can be managing shipment volume and optimizing truckloads with platforms such as Convoy or Mothership.
Technology is changing how logistics planning is done.
What supply chain practitioners should focus on, then, is getting their tech stack fully audited ahead of Q4. Or, getting ready to run small pilots to solidify 2021 plans. Finalizing installations and integrations in Q3 will give you time to test each system ahead of the year-end crunch. It’s an institutional way to build resiliency.
3. Speed up your data to manage disruptions
One long-lasting takeaway of the COVID-19 pandemic—and something companies should return to annually for Q4 planning—is that disruptions generate a significant amount of chaos by impacting multiple aspects of a supply chain. Complex systems struggle during disruptions, and the more spread-out data and supply chain management capabilities are, the longer it can take to respond.
Look for opportunities to integrate supply chain systems and identify areas where platforms can share information—across internal structures as well as with supply chain partners. Logistics management dashboards can improve how quickly data is available for analysis by automating a variety of manual tasks and flagging concerns based on predetermined rules.
Machine learning is exploding in the logistics space, reaching new areas such as last-mile delivery via Convey and similar platforms. Others like Flexport can speed up analytics capabilities, which can make it easier to identify disruptions as they start. Your “best” platform will depend on a unique mix of partner systems, existing technology, and industry. By testing solutions designed to streamline operations for you and suppliers, you can speed up reactions to disruptions and make smarter decisions.
4. Review breakpoints and alternatives
Thinking about direct-to-consumer (DTC) opportunities can help supply chains also prioritize their protections by identifying areas of weakness and creating a plan to address them.
Expanding operations to offer DTC fulfillment can include dozens of third-party providers and partners across the supply chain. “From manufacturing to freight forwarding to fulfillment and warehousing to last-mile delivery, it is critical that you know your breakpoints,” says Matt Hertz, Co-Founder of Second Marathon.
This is another opportunity to review upstream and downstream partners for risks. With digital and flexible logistics solutions, you can proactively integrate with new solutions that make it easier to adapt when a disruption occurs.
For example, securing alternative sourcing options and determining how much lead time you’d need for a switch. If you rely on multiple manufacturers, any common sources of raw materials they use can be a single breakpoint in your supply chain. Third-party logistics partners and carriers that use the same hubs and ports are likely to face delays at the same time. Instead, by sourcing alternatives, you can make sure operations remain intact, no matter what.
5. Guide B2B expectations using DTC trends
There’s been significant growth in DTC fulfillment led by increasing eCommerce sales. As online sales continue to accelerate across the globe, and common demands—such as two-day shipping—have become standard, B2B eCommerce sales are adopting the same expectations.
Supply chain disruptions have proven to many consumers and businesses that online purchasing can supplant traditional in-store buying. Expand supply chain capabilities to highlight and prioritize the DTC benefits, especially time-savings opportunities.
Moving forward: Bring efforts back to consumption patterns and trends
COVID-19 aside, retail supply chains must continue to evolve and meet consumer demands. The value system of consumers is a continuously evolving prospect that impacts how they consume. Sustainability is the easiest trend to identify, but different sectors are also influenced by minimalism, experience-oriented purchasing, and longer-term declines to in-person purchases.
Supply chain Q4 planning prioritizes supply and fulfillment practices as well as spikes in inventory management and returns. There are opportunities for companies to adapt practices in these regions to meet consumer demands. Sustainable packaging and infill can improve customer perception and marketing. Standardizing freight shipments and overall packaging can make it easier for distribution centers to manage inbound and outbound fluctuations.
Building supply chain resiliency requires understanding the broader context in which your supply chain exists and operates.
Recognize the trend and demonstrate how you meet it, allowing your enterprise customers to comfortably purchase from you while maintaining their commitments to consumer spending—sustainability, conflict-free, ethical labor, and more.
Building supply chain resiliency requires understanding the broader context in which your supply chain exists and operates. Economic changes, social shifts, and disasters like COVID-19 can and will impact customers and purchase decisions each year. Planning the ways you work to identify and respond to these fluctuations is an especially worthwhile practice when looking ahead to Q4.
With digital logistics solutions, you can incorporate flexibility into your operations to ensure you’re better positioned to manage disruptions. This preparation can help your supply chain to meet what will likely be its most challenging demands by identifying the potential impact of any recent change.