Mark Stanton is the director of industry analyst relations at Oracle, responsible for supporting the company's supply chain management and manufacturing software business, as well as the Internet of things technology and global sustainable development plan. He is a marketing and communications professional with experience in supporting supply chain transformation from an operational and supplier perspective. In addition to Oracle, mark also holds leadership positions in blue yonder and Lenovo, responsible for leading the external relations and other tasks of the company's global supply chain organization.
When the impact of the epidemic on the world has become a social term such as "new normal", "next normal" and "unprecedented damage". Changes in people's lives, economies and supply chains have long been ubiquitous and deeply rooted in the hearts of the people. Now is the time to focus on how to innovate and optimize your business and operations in this permanently changing world.
Challenges drive huge changes in supply chain and logistics
In many industries, traditional wisdom about best practices in supply chain operations and logistics networks is being challenged. The significance and priorities of scale, globalization, outsourcing and inventory optimization have been hotly discussed. The pursuit of higher efficiency and speed has dominated the transformation plan for more than 40 years, largely because it is assumed that raw materials, commodities, warehouse space, transportation capacity and labor will be abundant and can be immediately provided at a stable and often declining cost. This is no longer the case, and for various reasons (environmental and geopolitical, etc.), the prospect of restoring these conditions in the foreseeable future seems unlikely.
The accelerated shift in buying behavior in the B2C and B2B markets has also played a huge role in redefining our landscape. In the past two years, the proportion of purchases made and completed through digital commerce has exploded. According to some industry observers, it is 10 years ahead of the trend before the pandemic. Now, the combination of physical stores and digital channels is more balanced, which requires the design of the supply chain network to be more complex. It is not only necessary to manage business and orders at the front end, but also to fulfill them at the back end. Because many consumers and enterprises choose to buy online, but pick up goods in the store, or even buy in the store, and then deliver goods.
Finally, the growing urgency of addressing climate change and social and economic inequalities has forced logistics networks and elsewhere to accelerate sustainability initiatives. Sustainable development is no longer an issue of corporate citizenship. It is rapidly becoming a key business priority because it faces higher regulatory and compliance requirements, as well as more and more requirements from customers, investors and the public around the world.
These dramatic changes do not mean that mature operating practices that bring efficiency are now completely obsolete - they do not. However, the pursuit of speed and efficiency should give way to a more balanced approach to achieve greater flexibility and flexibility. This is not a continuous improvement work, but a survival problem, because there is greater unpredictability in our market, constantly exerting pressure on resources and challenging the accuracy of demand and supply forecasts.
Signs of successful logistics transformation
So, in the next wave of logistics transformation, where should enterprises start? Within Oracle, we see that many customers have made meaningful progress in integrating greater flexibility, resilience and sustainability into their operations. Each organization is unique and cannot be generalized, but we have observed at least four common elements related to successful leadership transformation projects.
Committed to taking a subversive approach to reshaping the logistics network - leaders in the logistics industry are willing to invest boldly to reconfigure their warehouses and transportation networks. They are not affected by sunk costs and incremental thinking, and have seen great advantages from the new and more flexible model. Responding to today's uncertainty is driving more decentralization, implementing in store execution, and using temporary warehouses and "micro execution" centers to improve flexibility. Their transport networks are more diverse and, in many cases, assisted by connectivity to the digital freight market.
Automation! Automation! Automation! This is not a new idea or trend. However, labor shortages and associated higher costs are increasing the return on investment associated with warehouse automation projects, which in some cases is critical to sustaining operations. The technologies available now go far beyond supporting large-scale, highly automated distribution centers and the use of "heavy objects", such as mobile pallets. For example, some newer robotic systems can effectively automate small-scale sorting use cases, such as fulfillment of grocery orders in stores. Leaders who understand the growing opportunities, use cases, and technologies to automate a wider range of tasks in their operations are achieving impressive results.
If you can't see what's going on around you, you can't react quickly -- it's no longer a desire but a need to achieve end-to-end visibility of the entire logistics network and the broader supply chain. Achieving this goal can be complex and challenging, requiring the collection, integration and standardization of data from different sources, as well as the ability to conduct real-time analysis and visualization. Many organizations have learned that this is difficult to accomplish when selecting and deploying numerous point solutions for multiple data models from multiple vendors. Today, many leaders see an easier way to improve visibility by building a common technology platform and data model. Through this approach, leaders are adjusting, reshaping and re planning their logistics network as needed to cope with short-term disruptions and long-term business needs.
Expand the use of machine learning and predictive analysis -- the effectiveness of the machine learning model has been proved in a series of use cases of the entire end-to-end supply chain. In logistics, for example, these technologies are helping to optimize warehouse productivity through more efficient sorting operations, as well as improve the sustainability and delivery reliability of the transport network. Leaders are looking for opportunities to try out new use cases and get to production quickly when they see clear value.
In the past two years, all industries have faced challenges. There is no doubt that every industry now operates under different economic conditions. If leaders do not over analyze the recent situation, but recognize the permanent changes and take bold actions to develop new patterns, processes and use cases, they will lead their organizations to greater prosperity in the next few years.
Mark Stanton is the director of industry analyst relations at oracle. He supports the company's supply chain management and manufacturing software businesses, as well as the Internet of things technology and global sustainable development plan. He is a marketing and communication expert with experience in supporting supply chain transformation from an operational and supplier perspective. In addition to Oracle, mark also held leadership positions at blue yonder and Lenovo, where he was responsible for the external relations and other tasks of the company's global supply chain organization.
