Implementing the fast cycle strategy, eliminating product bottlenecks and delays and optimizing resource utilization by evaluating the feasibility of new investment will help to improve the supply chain strategy.
If coronavirus disease (covid-19) has taught people one thing, it is that there is no new normal in the world.
2022 will be the year of internal logistics intelligent supply chain. It prioritizes transparency, anticipates new emergencies and enables faster decision-making. Enterprises need to adopt technologies that establish flexibility and agility in the supply chain to make them safe, low-risk, transparent, cost-effective and intelligent to deal with crises in real time.
The crisis slows the world down, resulting in inefficient processes and waste due to damaged, unsold and eventually landfilled items. The industry needs to become more efficient and adapt to sudden changes in demand or supply, while retailers need more visibility and insight into operating costs and inventory management, and ultimately become more sustainable.
Here are five supply chain trends that will help enterprises manage the global crisis in the future.
(1) Reduce inventory cost through effective hybrid inventory management strategy
An effective push-pull strategy combines just in time production (JIT) and case production (JIC) technology to create a cost-effective inventory management strategy to solve short-term and long-term sales needs. Although lean production is a kind of passive technology, it can reduce the cost of supply chain and keep it on demand. On the other hand, JIC is a positive technology, which can order too many products to avoid the loss of sales caused by the interruption of normal process or the unexpected increase of demand. However, excessive inventory will block working capital and increase opportunities for waste and loss. Modern commodity sales solutions provide a detailed aerial view of the current inventory level and future demand in the pipeline by analyzing the inventory turnover rate and the induction trend based on previous sales data. The flexibility and responsiveness of JIT technology in the supply chain are established through JIT. It enables enterprises to flexibly produce customized products when needed and continuously serve routine needs.
(2) Integrate cloud based supply chain management solutions
Limited visibility in the supply chain reduces the adaptability of enterprises, which was emphasized during the pandemic. New era cloud based solutions help enterprises recover from losses and optimize systems for future growth through rapid digitization and process automation. These professional software as a service (SaaS) solutions are used for efficient warehousing and accurate sales, seamlessly integrate with other systems, provide enterprises with real-time inventory visibility, maximize decision-making efficiency by providing a single inventory view, and ensure flexibility and scalability in peak seasons. Cloud based solutions build an interconnected, intelligent and innovative supply chain, which is constantly upgraded automatically through regular software updates. In addition to being a valuable solution for enterprises, SaaS also helps improve customer relations and profitability by quickly adjusting to meet customer requirements.
(3) Build stronger D2c relationships
Covid-19 exposes and accelerates the weaknesses of brands that rely heavily on market platforms and wholesalers and lack direct consumer facing (D2c) relationships. The unique digital store provides a unique and fulfilling experience to strengthen brand loyalty. With the popularity of D2c model, the top priority is to skip middlemen, establish complete control over sales and order execution, and establish value driven relationship with customers. Interpreting the needs and emerging models of local customers and serving them through distributed warehousing and regional utilization can help brands approach customers with decentralized inventory management and low capital expenditure. The establishment of micro supply chain can simplify the process and establish business agility, so as to create business efficiency and reduce uncertainty and risk.
(4) Rethink delivery and methods
Local expansion is a new global expansion. Better control of delivery through third-party logistics (3PL) and brand cooperation can reduce risks during economic turmoil and limit carbon emissions by accelerating delivery. The last mile service (lmaas) is an innovative concept that establishes dynamic cooperation and eventually stretches the supply chain to the last mile. It enables brands to provide personalized products to any place in almost real time, and enables smaller companies to obtain the logistics capacity of large brands on demand, combined with advanced technology to provide power for them. Brands need to build agility and flexibility through distributed warehousing and expanded delivery networks.
(5) Establish a sustainable and circular supply chain
With the omni channel of the retail industry, it is very important to establish an effective return management strategy for all sales channels, so that goods can be effectively reused, recycled or resold, so as to reduce the environmental footprint and improve resource efficiency. Cost effective technology solutions can help retailers reduce manufacturing, eliminate waste, and increase sales by targeting real demand potential. An efficient return management solution promotes rapid re trade by bringing good inventory back to the circulation field and optimizing the value of damaged or defective items in the secondary market to maximize resale.
Now is the time to unleash the elastic and scalable potential of the cloud and design the best cost-effective solutions to bring speed, expertise and efficiency to the supply chain. Implementing the fast cycle strategy, eliminating product bottlenecks and delays, and optimizing resource utilization by evaluating the feasibility of new investment in digital twins will help to improve supply chain strategy and daily decision-making. Intelligent technology is carefully building a more responsive and sustainable supply chain. Retailers must master the road of innovation in order to survive in this competition.
