Supply chains and technology trends

Supply chains and new technology trends

New technological advances across the supply chain are changing the way businesses run their day to day operations.

Traditional supply chain management is fast becoming obsolete, with warnings from many top logistics specialists about the dangers of falling behind in a rapidly changing landscape. A technological revolution is happening across many industries and those who want to stay ahead of their competitors must consider embracing new technologies, to deliver a faster and smoother service to their customers.

Supply chains and technology trends

Big Data

Many new tech trends have come off the back of the big data revolution, which is changing the way companies look at their supply chains from beginning to end. Put simply, big data refers to high volumes of complex facts and figures from across a supply chain that can be turned into real life actions or decisions.

Data can range from sales numbers and buyer trends to weather conditions and global supplier issues. Collecting and accurately utilising big data using traditional methods of supply chain analytics generally, leads to inaccuracies and is often impossible. Ultimately, this means that company’s making the most of the new technology available to them are at a distinct advantage in the marketplace.

New technologies

Businesses can utilise new technological trends to crunch big data and stay ahead in the market place. One of the easiest and most popular new trends comes in the form of social sourcing; using social sites to predict trends and feed information back to S&OP. Public cloud networks are another increasingly popular tech trend, with big software companies such as Infor buying up cloud based supply chain management platforms.

Machine learning and predictive analytics are another technology trend transforming the way businesses manage their supply chain. Predictions and simulations based on real-time data from a company’s sales, the price of raw materials and even global political factors can improve the supply chain. This could help companies prioritise supplies, increase profitability and generally run a smoother operation from beginning to end.

Cloud software and machine learning is developing rapidly, whilst quickly becoming accessible to both smaller and larger organisations across the globe. These fast paced changes make it imperative for businesses to remain ‘future-proof’ in the face of growing customer demand and intelligent tech.

Business collaboration

Whilst taking advantage of growing tech trends is crucial for organisations wanting to stay competitive, it’s important for business owners not to hand their entire supply chain over to a machine.

Business collaboration

Tech is becoming increasingly intelligent but there are some things software cannot do and the need for collaboration is still important. For businesses to truly grow, everyone in the supply chain must make a commitment to cooperate seamlessly so that big data and intelligent software can be utilised efficiently. Collaboration with trusted partners in the industry is another essential tool for business looking to grow and can be a good starting point for owners that don’t have as much spare capital to put into the latest tech.

Making use of supply chain specialists is also a lower cost option for businesses on a budget. Professional logistics experts can advise on the best low-cost tech options available to harness the power of big data. With technology trends evolving all the time, it’s now easier than ever for businesses to make the most of the smart technology in the supply chain.

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Dealing with increased organic demand in the supply chain

The last few years has seen an incredible 80% rise in demand for organic and non GMO food products.

Consumers are waking up to what’s in their food and are demanding high quality produce without pesticides or genetically modified ingredients. This demand is set to rise further, with more companies being forced into sourcing non GMO and organic ingredients for their products.

organic-food

 

What does this mean for the supply chain?

The increase in demand for organic produce can put a strain on an organisations supply chain. This comes down to the need to get ingredients from the farm to the factory more quickly than foods that have been preserved or genetically modified in some way.

Some companies are opting to source organic and non GMO products from certified supplies but this is not a viable alternative for all organisations. Instead, many businesses are looking towards other non GMO and organic proteins to use in their products.

These ingredients include peas, which are high in starch and free from allergens, or rice bran, which can be made into a source of fibre, protein and into oil. With these ingredients being easier to source than other organic and non GMO products, it is having a much smaller impact on their supply chains.

 Rethink your Approach

Nonetheless, many companies are still facing supply chain issues and are being made to rethink their approach in a range of areas such as:

  • product acquisition times
  • distribution
  • warehousing

Unfortunately, finding the time to rework your supply chain, alongside trying to keep up with the increasing demand for organic food isn’t always possible.

To combat the problems that come with an increase in demand, many organisations turn to supply chain and logistics specialists to help them combat the issues.

Supply chain consultants can help your businesses source non GMO and organic produce more efficiently and if needed, can find products that are traceable right back to the farm.

 Coping Strategies

The rise in demand has for organic and non GMO has caused an even bigger rise in the production of these ingredients by farmers and suppliers.

apple-harvest

However, distribution time from these areas is still one of the biggest problems for organisations looking to use organic ingredients. To tackle this, supply chain specialists can advise on coping strategies for perishable ingredients and develop tactics to help minimise wastage and speed up distribution times between warehouses.

Increased customer awareness means that there have been big changes within the food industry and this not set to slow down any time soon. Ensuring your supply chain can cope with the transition to organic and non GMO is vital for the future successes of your business and will give you the competitive edge you need to stay profitable.

For help optimising and reducing risks in your supply chains talk to Total Logistics supply chain consultants.

Supply chain consultants could help you to transform your business

supply chain consultants

supply chain consultants

Are you finding the demands of your clients and deadlines too much to handle? Are you not responding and delivering items quickly enough? This can directly impact your brand reputation which you can spend a lifetime building but 5 minutes to destroy!

You may want to reconsider how your supply chain is handled. Supply chain consultants help you to analyse, plan and optimise your supply chain to create bespoke a model that works for every area of your business and eventually your clients.

A recent article from B2B source outlines the alarm bells that are ringing which show that you need some assistance with your supply chain. The article also outlines how supply chain consultants can help you to get your business running like clockwork. You can read the full article here at B2B Source.

For more information about supply chain consulting, visit Hillman Consulting today.

Increasing Your Warehouse Capacity

When storing your goods ready for dispatch,  finding strategies to ensure your warehouse has as much space as possible for incoming goods can be essential. B2B source lists the 5 things that you much take into consideration when it comes to optimising your warehouse.

inventory optimisation

  1. Plan Ahead –  Always make sure you are planning ahead of every shipment your warehouse receives
  2. Remember Throughput – Make sure you keep items flowing out of your warehouse.
  3. Order Little and often – It might increase your shipping costs but getting stock in small, frequent amounts will reduce your batch stock and free up a little more space
  4. For 4 , 5 and 6, read the full article here at B2B source: http://www.b2bsource.co.uk/services/increase-warehouse-capacity.html 

 

 

3 Areas for Managing Successful Global Supply Chains

If you are growing your business internationally there is likely to be some key obvious requirements and changes your organisation will need to go through including a larger facility, more staff, increased marketing plus more overseas business trips.

global supply chains

Global Supply Chains

As well as these obvious changes there are some more hidden internal changes that need to take place and one key area in your supply chains. Your success as an international business will rely heavily on keeping pace with your supply chains.

The following are a few tips for developing successful global supply chains:

Gain local insights through local knowledge

local supply chain knowledgeFinding local partners that have a deep and full understanding of the local markets will be key to developing your brand internationally.

The right local support can help you in many key business areas from finding the right suppliers, transport links, business consultant and negotiating legal and tax requirements.

Investing in the right IT solutions

supply chain IT solutionsYou simply can’t be everywhere at once so having access to accurate data is going to be key in controlling your global supply. From budget numbers to operational goals, having the right data at your figure tips will make all the difference.

The right supply chain software platform is ensure you stay on track and can also cut costs, support growth, and increase your return on investment.

Value and diversify suppliers to reduce risk

global supplierHaving a great relationship with your global supply chain partners really makes for a much smoother ride for everyone including better negotiations, production and delivery.

As well as developing positive supplier relationships it is also a good idea to follow the proverb of not putting all your eggs in one basket by having a number of suppliers to reduce your supply chain risk.

Developing your business internationally can bring great benefits as well as challenges, but with the right partners and supporting systems you will find developing globally much easier.

Total Logistics are independent supply chain consultants operating logistics and supply chain projects all over the world. They are perfectly positioned to help business expand their operations into global markets for more information visit http://www.total-logistics.com/

Warehouse Economics

In the business of logistics time and placement is everything. Every additional second caused by delays because it takes longer than it needs to find, remove and place cargo onto transportation is a second costing you money, as well as customer satisfaction.
warehouse design and layout

In today’s economic climate, you can’t afford that waste. Every second counts. So in order to make sure you’re making the most on your supply chain and that your warehouse design and layout are not impeding company productivity, you need to enhance both.

But how can we do this? Below is a short list of tips and techniques that can help you make the most of your warehouse layout.

  • Communication. Make sure that your warehouse staff know exactly what they’re supposed to be doing and when they’re supposed to be doing it.
    Establish clear communication lines and get everyone familiar with them. If you fail to do so, then orders and information can quickly get cluttered up and create delays.
  • Standardisation. Your warehouse design should ensure that everyone is using uniform measures, weights and management. Also make sure that everyone knows exactly where things are supposed to be and what’s supposed to be done with them.
  • Educate the people in charge. If your leadership team know what questions to ask of their staff, how to address common issues plus when, how to effectively get everyone moving. Then your team leaders will be able to deal with most problems as they arise without needing to bother higher management, then this can save a lot of time and money.
  • Well trained working teams. Effective training programmes for your staff can help ensure that they better understand what you expect from them and that they maintain best practice.
    In addition make sure that new staff members are fully supported in their training and have the job broken down for them. This will reduce mistakes early on and can be much more cost-effective than the sink-or-swim method.
  • Empower your staff. You’ve hired your people for a reason; because you believe that they know what they are doing and because they are experts at their respective fields. So creating a company culture that encourages enquiry, co-operation, responsibility and customer satisfaction can be invaluable to your warehouse’s productivity.
  • Look at variation, not averages. It is where the anomalies occur that you can run into trouble. Your warehouse design and layout should ensure that such variables are kept to a minimum and that your staff know how to deal with them. If ever a variable occurs, find it and find out how to reduce it.

For further information and advice and warehouse design and supply chains, talk to Total Logistics the complete supply chain consultancy.

www.total-logistics.com

Reducing Logistic Transport Costs

One of the most fundamental basics of business management is always to ensure that your outcome never exceeds your income. This is so fundamental that for many of you it doesn’t even need saying, nevertheless it is something that must always be kept in mind.

Reducing logistics and supply chain costs
As such, all successful business owners learn new ways and strategies to keep themselves firmly in the black and new methods by which they can cut costs without cutting services. One thing to look at, therefore, should be your supply chain and how much money is spent into it. This is especially true in today’s global economic climate and the often fluctuating prices of oil and gas. After all, if it costs more to transport something than you can get through sales, is it really worth the expense?

First, try to divide all the factors that can influence the cost of your logistics into three main categories:

  • Things you can control, for example, the quantity of cargo you want to transport.
  • Things you can’t control but can manage, such as the surcharge increase from carriers.
  • Things you can’t directly control, but can influence. The cost of oil, for example, is pretty much fixed, however some companies may be willing to adjust the price to a given price lock.

Keeping these things in mind can help you develop strategies on how improve the cost efficiency of your supply chains and logistics teams, largely by giving you an idea what you can change and how to cope with the things you can’t. After all, there are going to be events that are outside of your control. All you can do is to ensure that they do not upset your overall running more than it needs to.

To help you start off, here are a number of ways you can reduce supply chain costs. For example, try to centralise your decision making so that you are in direct control of how your logistics chains run. Relying on the judgement of individual shipping sites may result in decisions that cost you more in the long run.

Then consider your cargo itself, just how much does your packaging consist of air? Make sure that your containers have as little excess space as possible, so it may be worth re-examining your packaging. Likewise, ensure your carton and crate sizes making the most of their available space. Do not use three small crates when two slightly larger crates will do.

It may also be an idea to look to your neighbours for help.Sharing transport costs will not only save you money, but also earn you good relationships with companies around you and those connections can seriously pay off in the long run.

For further advise and long-term planning, it may also be an idea to look at supply chain consultants. Having a friendly professional who can give you insightful advice into your supply chains can be invaluable and pays for itself quickly. 

So What is S & OP?

Sales and operations planning or S & OP is a structured forum and its related process for communication and decision making relating to supply and demand.

S & OP MeetingsThe main goal is for the decision making team to continually strive for and optimise the operational functions of their organisation, which can include:

  • Product development and marketing
  • Customer development and sales
  • Finance
  • Product supply

In addition the S & OP process includes the following updated plans:

  • Sales plan
  • Production plan
  • Inventory plan
  • Customer lead-time (backlog) plan
  • Product development plan
  • Strategic initiative plan
  • Resulting financial plan

Decisions at the Right Time

Timing is key as all S & OP decisions need to be taken at the right time and take into account the balance between flexibility, demand and capacity.

As a rule when doing long-range forecasting plan flexibility can be extensive while predictions on supply and demand can be inaccurate so several long-range forecast scenarios will need to be in place. This long-term strategic planning can be complex and the decision process is often slow.

When looking at the short-term view often just a few weeks ahead this operations planning finds that flexibility is more limited while predictions on demand and capacity tend to be more accurate making decision making much simpler and quicker.

Sitting between these is a middle stage or tactical planning stage looking only months ahead that see slightly more flexibility than the operational planning stage coupled with still a good degree of demand and capacity prediction accuracy.

Benefits of a proper S & OP process

Ultimately successful S & OP implementation saved money and resources while improving operations and sales making organisations more effective in what are still very difficult economic conditions.

However, getting these right systems in place can require expert support plus access to more detailed modelling tools especially for the more difficult strategic planning stage. Total Logistics are highly experienced and independent S & OP consultants and can help you create a fully integrated S & OP process that will give you greater business agility, enabling you to reconcile supply and demand plans and determine your supply chain requirements over short, medium and long term horizons.

In a recent example, Total Logistics delivered successful S & OP solutions to a global manufacturer. As a result of this, finished goods inventory holding was reduced by more than 50% and operational costs were reduced by nearly 10%.

For more information call Total Logistics on 0118 977 3027 or visit www.total-logistics.com

The Adoption of Inventory Optimisation

Inventory OptimisationInventory optimisation – the method and process of determining the appropriate inventory levels across an entire supply chain – has never been a simple problem, but the emergence of new tools is allowing companies to get this essential job done faster, with higher accuracy and greater impact on their business. Many industry leaders have discovered that inventory optimisation (often abbreviated to IO) can result in higher profits due to lower inventories, improved fill rates and more satisfied customers.

Over the past ten years, IO has moved from a classroom-only exercise to a usable and practical tool which greatly improves corporate profit margins. Many companies which implement IO instigate a 10-30% total inventory reduction, but the underlying drivers of supply and demand are common to all supply chain management situations which means IO is applicable to every industry on the planet.

Inventory analysis and optimisation started as an advanced mathematical approach to the process of understanding and quantifying supply and demand patterns across a supply chain with multiple levels. Today, IO is considered a “core competency” for both moderately sized and Fortune-500 companies across an enormous range of industries. Inventory optimisation is actually a sustainable process in its own right, as it frees up countless millions of capital by reducing stock inventory without impacting negatively on service levels. This makes it far superior to more old-fashioned “binge and purge” cycles of overproduction chased by a brute-force style inventory reduction. Properly implemented inventory optimisation allows companies to save money and increase the turns on their inventory whilst still driving more profit overall.

Over the last few years there have been four contributing factors to the growth in popularity of inventory optimisation. The first is the success of improvement plans which are focused around business operations. IO is built on solid foundations established by process re-engineering for businesses such as lean manufacturing and six sigma projects, which also establish a firm relationship between the inputs and outputs of supply chains as well as giving a good basis for accelerating the potential benefits of inventory optimisation.

Secondly, many companies are working immensely hard to remove the often very large imbalance between projected supply and perceived demand. Forcing capacity levels and the purchase plans for materials to match demand projections gives a far greater need to set proper inventory targets. Recent financial problems across the world has resulted in a drastic reduction of inventory across all industries, which means there is no longer an existing excess of production capacity or stockpiles of leftover inventory which can step in to satisfy sudden changed in product demand. All such fluctuations now have to be dealt with using scientifically-derived inventory targets, which means proper warehouse inventory optimisation software is needed in order to manage the supply chain from end to end.

Thirdly, there has been a significant adoption of key performance indication metrics such as service levels or cash-to-cash cycle time. These metrics require a supply chain orientation for proper evaluation and can only really be improved with dedicated tools such as formal inventory optimisation algorithms.

Finally, established and proven software which is able to solve complex inventory optimisation problems across global supply chain networks is now commercially available rather than being reliant on in-house customised development. While other techniques such as advanced planning and scheduling, or APS, make use of deterministic optimisation methods, inventory optimisation requires stochastic and nonlinear integer solution mathematics at its core. IO maths is thus different from APS maths but is not industry specific, which means the same software can be deployed easily across a variety of industries in order to set up and manage inventories.

In under a decade, inventory optimisation has moved from an emerging idea to a proven technology which can be used to sharply reduce total inventory levels whilst still maintaining or improving the level of customer service. These two competing objectives can be easily satisfied by using the mathematical method of accounting for variable status across the entire supply chain and building up a virtuous inventory optimisation cycle which operates at both the short-term local and long-term strategic levels. Although originally created as an advanced algorithm designed to understand and quantify the pattern of supply-demand uncertainties in multi-level supply chains, inventory optimisation is now recognised by many leading businesses throughout the world as a core competency which is absolutely critical to their overall success.

Read more on inventory optimisation and find consultants suitable for your business at Gideon Hillman Consulting.