Four Strategic Levers for Achieving Success in Global Supply Chain

With the ongoing post-COVID economic, geopolitical, environmental, and societal uncertainties, global supply chains are yet to return to the ‘normal’ days of yore. All signs point to the current ongoing situation to be the ‘New Normal’. Global supply chains have been facing these headwinds, which, in turn, put tremendous pressure on businesses to think tactically rather than in long-term, strategic terms. While the uncertainties around these macro indicators will continue to manifest in the foreseeable future, businesses must look past them and start planning strategically for the future.

This article focuses on the four broad critical levers that organizations as well as supply chain solutions providers need to consider important and deploy means for optimization. Organizations that combine multiple strategies with a leading assist from Technology can help convert each of these critical levers into a competitive advantage.

1. INNOVATING To Keep Pace with The Ever-Changing Business Scenario
2. REVENUE BASE Expansion in The Face Of Global Economic Headwinds
3. ESG (Environmental, Social, Governance) Impact and Benefits

4. CUSTOMER STICKINESS In an Uber Competitive Environment

1) INNOVATING To Keep Pace with The Ever-Changing Business Scenario

“About 80% of warehouses in the world have no automation at all”

How can businesses gain confidence to invest in the right technology in the right areas at the right time? One approach for organizations is to determine their strategy, establish aspirational growth goals, and work towards developing an innovation roadmap to support them. These are some of the technological solutions that could lead the way.

• Warehouse Management System (WMS)

The purpose of WMS is to serve as a hub to manage inventory, storage optimization, and reduce time and motion waste in the movement of goods within the facility. State-of-the-art technology like Visibility® WMS from TVS Supply Chain Solutions facilitates the smooth functioning of a warehouse including order management, picking efficiency, location management, inventory control, and analytics & reporting.

• Automation

Automation can impart various benefits across the supply chain like enhancing operational efficiency, and productivity and reducing repetitive, manual tasks so that talent can be cross-deployed for better contribution to second-order activities.

• Machine Learning and Artificial Intelligence

Artificial Intelligence (AI) has been growing leaps and bounds as a path-breaking technology and enabler. Machine Learning and Large Language Models (LLMs) perform deep and detailed data analysis helping in optimizing inventory levels, improving forecasting accuracy, and enhancing decision-making. AI, ML, and LLMs as enablers will usher in a new era of data engineering. It will be vital for organizations to establish a robust process of collecting data of the highest quality that is accurate and can lead to scalable solutions using the latest technologies.

2) REVENUE BASE Expansion In The Face Of Global Economic Headwinds

“A recent Google survey found that 71% of consumers are being more thoughtful about what they spend their money on.”

The global and macro level economic uncertainty makes it extremely difficult for companies to make long-term, forward-looking plans and investments. Unpredictability regarding global disruptive events like the COVID-19 pandemic only accentuates this uncertainty. In such an environment, leading organizations can focus their strategy on the below levers for long-term, sustainable growth.

• Space Optimization

Revenue expansion does not include only commensurate, proportionate growth, but also optimizing the operations to make better utilization of available space, as warehouse property costs make up a substantial chunk of the overall organizational costs. Thus, space optimization can act as a USP (Unique Selling Point) and competitive advantage for organizations. Space optimization leads to cost advantage and provides opportunities for organizations to avoid incremental, additional costs.

• End-to-end supply chain monitoring

Supply chain monitoring helps to understand and analyze all the supply chain parameters and keep track of critical parameters e.g. order status, inventory levels, and overall logistics. It is estimated that most organizations could monitor just 20% of their supply chains at any given time. Developing a real-time view of supply chains enables businesses to make better decisions, simulate various scenarios, and understand the end-to-end flow of goods within their systems. This analysis highlights areas of opportunities for growth at every stage of the supply chain.

• Technology and systems

Warehouse Management Systems (WMS) and warehouse automation systems can automate manual tasks leading to error elimination and improving productivity and efficiency. Implementation of WMS like Visibility® from TVS Supply Chain Solutions also allows organizations to up-skill their workforce so that they can contribute to more value-added activities. Implemented strategically and in a focused manner, automation can end up being a powerful competitive advantage for organizations.

• Business agility and flexibility

The current macroeconomic and global trends dictate that organizations need to be more agile and flexible in dealing with supply chain challenges. While productivity and efficiency play a major role in achieving competitive advantage, being flexible to adapt, adopting new trends, and anticipating upcoming challenges mandates that organizations need to develop the ability to expand or compress their supply chain ability in real-time to avoid expensive inventory issues.

• Reinventing Just-In-Time

Toyota introduced the Just-In-Time (J.I.T.) philosophy and processes that changed the face of the automobile manufacturing and assembly landscape. J.I.T. is fundamentally linked to end-to-end visibility that connects different sources of information and data from different partners and provides a singular picture of the entire supply chain. J.I.T. implementation enables partners, their data, and their systems to operate seamlessly helping organizations to operate more efficiently and preparing them to respond better to supply chain changes and fulfill customer expectations more effectively.

3) ESG (Environmental, Social, Governance) Impact and Benefits

“Supply chain companies could lower last-mile global emissions by 17-26% by 2025”

Sustainability has been the defining focus of this generation in the last 10-15 years. Organizations have made impressive strides in assessing ESG impact, such that the focus has shifted from reducing the negative impact to focusing on delivering positive, profitable results. The impact of the global supply chain is evident in the environment, societies, and the lives of individuals.

ESG impact is no longer a line item included in the balance sheet, but it can also facilitate revenue growth, lead to cost reduction, improve employee productivity, and provide better return on investments. Thus, supply chain organizations can deliver a positive impact on people and, the planet as well as profit. Organizations need a robust ESG strategy to satisfy consumers, shareholders, employees, and governments.

• Assessing emissions footprint

An optimized space warehouse and fulfillment footprint helps in the reduction of resourced consumption and lessens the environmental impact of the space. Space optimization drives efficiency and cost reduction, while also helping businesses reduce their impact on the surroundings as well. Companies require robust data analysis capability to properly assess their impact on the environment, employees, or the surrounding environment. Data that is sourced from system and process digitization combined with a focus on continuous improvement assists in performance benchmarking and efficiency gains.

• Governance and reporting

In order to ensure ESG is impactful, organizations need to make ESG part of the commercial decision-making process and establish consistent standards for ESG performance reporting. The leadership team needs to take charge to ensure the inclusion of ESG parameters in the commercial decision-making process. To derive consistent reporting standards, ESG should be considered in terms of revenue and profits to report ESG performance across all the verticals and business units of the organizations.

• Industrial Automation

Industrial Automation using the latest advances in warehouse technology leads to better space utilization and optimization. This leads to a massive reduction in the ESG impact. In addition, automation and robotics can help in improving productivity, and efficiency and reduce lead times, leading to customer delight.

• Regulatory Liaison

Government regulations legislated, encouraged, and supported by global bodies such as the United Nations Environment Program (UNEP) can help create a standard, consistent agenda, providing clear guidelines to organizations to focus their ESG priorities on for optimal impact. Businesses can use such guidelines to prioritize their efforts on the ESG areas that matter the most.

4) CUSTOMER STICKINESS In An Uber Competitive Environment

“85% of online shoppers say that a poor delivery experience would prevent them from ordering from that online retailer again.”

With increasing efficiencies in the supply chain formats, consumers expect improvement in customer service and delivery experience. Organizations need to identify these customer trends and realign their operations to ensure that improved customer service leads to better stickiness. In order to achieve this, companies need to focus on availability, convenience, cost, delivery speed as well as sustainability.

• Automation and Artificial Intelligence (AI)

Robotics-led automation has been a game changer and difference maker in many labour-intensive industries. Automation allows for higher productivity and efficiency while reducing dependency on human labour and eliminating human errors and fatigue-related issues. This in turn benefits consumers by providing speed, accuracy, and sustainable long-term solutions. Artificial Intelligence (AI) can use vast amounts of data and create actionable insights to offer intelligent solutions to typical operational challenges such as disruptions in the supply chain, seasonality in customer demand, accurate forecasting, accurate reporting as well as solving quality-related issues. With such an elevated service experience, customers are more likely to stick with their existing retail provider.

• Accelerated delivery timelines

Faster delivery formats such as 2-hour delivery, 4-hour delivery, same-day delivery, etc. are quickly becoming the market norms, not to mention the Quick Delivery formats of 10-minute delivery, 30-minute delivery, and 1-hour delivery. Hence, in addition to cost and customer service, accelerated delivery times have become critical to retail strategy. To meet customer expectations of fast delivery, organizations need to have clear visibility across their inventory levels and replenishment capabilities. Furthermore, companies need to be equipped to meet seasonal demands and choose the right delivery partners who can deliver on the quickly evolving customer expectations.

• First Time Right

While trying to match customers’ expectations for accelerated delivery timelines, companies also need to ensure that the right product is being delivered. If the wrong product is delivered, the organization suffers not only from the increased reverse logistics costs but also takes a hit on its brand reputation and customer loyalty. While it is extremely difficult to completely eradicate the element of human error due to the nature of the fulfilment business, the focus should be on any and every strategy using the latest technological advances to drastically minimize human errors.