By Jim Daddario, Director Product Marketing SCM
Businesses have been grappling with the global pandemic for nearly a year, forcing many companies to make radical changes that impact both the selling and distribution of goods while maintaining customer loyalty. However, well before the pandemic, companies and their increasingly complex supply chains have frequently faced disruptions such recessions, trade wars, port closures, and severe weather that suddenly disrupt normal logistical operations and place customer orders at risk. While disruptions may have compelled firms to adjust their operating models or make incremental technology investments, COVID-19 stressed supply chains to the breaking point and showed that relying on operational tweaks and outdated IT systems leave most firms unable to cope with disruptions while maintaining excellent customer service.
Complexity and Aging System Agility
Faced with frequent, unpredictable change, companies need to bolster their resiliency to achieve the level of agility and adaptability required to overcome the inevitable next challenge. Companies that survive and thrive in the long run are those with the most agile and flexible supply chain networks comprised of suppliers, transportation providers, distribution centers, and retailers who coordinate effectively to deliver shipments and perfect customer orders. Having flexibility built into the systems that manage these critical functions provides them options and the ability to adapt such as or fulfilling orders from different distribution centers or rerouting them to achieve the perfect order.
Companies that lack flexibility suffer the consequences. Most often, they’re hamstrung by outdated legacy systems designed decades ago. Rigid and inflexible, they cannot support the complexities required to process the perfect order—from orchestrating across buying channels, to visibility across multiple inventory locations, changing fulfillment methods, and leveraging expedited shipping options when necessary. Demanding customers also expect companies to process returns seamlessly, which many legacy systems struggle to do, but it’s critical to maintaining competitive advantage and satisfied customers.
Aging systems were likely implemented when supply chains were less complex. They optimized many of those for internal silos such as single products or product lines, warehouses, or transportation functions. This worked when supply chains were simpler and standalone systems could adequately manage a company’s logistics operations, often supported by spreadsheet-based manual processes. That was then. Today’s complex, networked supply chains comprise many nodes such as different suppliers, transportation providers, and distribution centers making visibility into customer orders as they progress through the order-to-fulfill cycle challenging but critical. The systems that manage each of these nodes not only need to orchestrate the flow of goods nimbly, but they must also quickly alert managers to orders at risk and recommend actions to resolve the issue to ensure on-time delivery.
Managing Disruption with Modern Technology
Companies that thrive in today’s complex world, where disruption is a cost of doing business, are increasingly adopting modern cloud solutions that provide the required flexibility to adapt to disruptions and the ability to change plans and process flows to resolve issues. Cloud systems are built on technology that enables rapid integration with both internal and partner systems to provide a seamless view of critical factors such as order flows, inventory, and shipment status, giving you the agility, you require. They also enable your teams and external business partners to collaborate easily from any device, accelerating decision-making, and responsiveness.
In a research report sponsored by Oracle, for example, 70% of supply chain professionals see cloud solutions as a game-changer. 89% are investing in cloud solutions to improve customer satisfaction. Likewise, 81% expect to improve efficiencies and productivity in logistics operations.
Capabilities that Enable You to Adapt
Modern cloud solutions provide a range of sophisticated technology such as the ability to manage transportation problems with sophisticated scenario modeling leading to the best alternative routing options. They also help balance the conflicting goals of maintaining service levels while keeping inventory within tolerable ranges to ensure high order fill rates while maintaining strong margins and cash flow. You can monitor the progress and condition of items when they’re shipped, allowing you to track your orders every step of the way. And it alerts you to problems like breakage or issues with temperature control—even events that might delay or interrupt delivery—so you can re-route the order and stay on schedule.
Uncertainty will be the norm for years to come, well after the pandemic is under control. Complex supply chains will always be vulnerable to factors such as weather, trade disputes, and factory shutdowns. Companies who thrive in this challenging environment will be those whose technology systems enable them to adapt quickly by proactively devising contingency strategies, fast identification of fulfillment and transportation alternatives, and adjust in real-time to ensure the perfect delivery and customer loyalty.