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.

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.

3 Mistakes to Avoid in Sales and Operations Planning (S&OP)

Sales and operations planning (S&OP) is now considered to be one of the important processes within successful supply chain management.

sales and operations planning

It is essential to ensure the smooth running of a business both in the short and long-term and helps companies balance:

  • supply and demand
  • costs
  • customer service

A good S&OP process will undergo many years of regular improvement with adjustments to maximise sales and productivity within different areas of the organisation.

Whether you are just starting out with your planning or looking to improve these are three major mistakes to avoid in S&OP.

1. Not getting the balance right

This is one of the most important things to get right in S&OP, yet so many businesses get it very wrong.

Finding the right balance of supply and demand is crucial to your success. Produce too little and both the sales team and the consumer is left feeling let down, but produce too much and you are left with goods that cost you warehouse space and may need heavy discounting to shift.

Equal importance should be placed on both the sales and operations areas of your business if you want to achieve a harmonious supply chain.

2. Planning for just one outcome

Never plan for only one outcome.

It has been an S&OP rule for many years to work towards the ‘one goal’ – a business’s ultimate ideal ending. Unfortunately, this just simply isn’t viable and not only does it diminish the importance of your executives it can leave you in hot water if things go wrong.

It’s an S&OP executive’s job to mitigate risk and plan for alternate outcomes, just in case the supply and demand does not follow the path it is supposed to.

Don’t make the mistake of planning for something that can often be inconsistent, always plan for both positive and negative alternate results.

3. A lack of engagement across the board

Another one of the biggest mistakes businesses should avoid in S&OP is the inability to engage with all areas of the business.

The entire reason good S&OP is crucial to an organisations success is because if done correctly, it enables the entire business to move in the same direction. Despite this fact, many companies still fail to understand the importance of communication.

Whilst operations would want to see results in units, finance is more likely to need information in the form of net margins.

Being able to communicate plans in a way that sales, operations and finance can understand will ensure that they are more involved in the S&OP process and can help to create a smoother supply chain.

These are three obvious but common mistakes that businesses fall down on when it comes to S&OP. However, alongside correcting these mistakes, it’s important to always regularly check your S&OP process on a weekly to monthly basis to ensure that calculations and forecasts are heading in the right direction.

Fluidity is vital in business, so you need to be doing everything you can to improve the flexibility of your supply chain today.

Getting expert and independent help with your S&OP can not only make sure you avoid common mistakes, but also ensure you have workable plans both from today and into the future. Visit Total Logistics to find out more.

Cross-Departmental S & OP Issues

Sales and Operations Planning (S & OP) is a simple business system: look ahead and plan accordingly.  The complexity comes in as planning requires cross-departmental cooperation and support. When conflicts arise it can be a serious set back.

Sales and Operations Planning (S & OP)

Do you have Cross-Departmental issues with your Sales and Operations Planning

For example:

  • Demand Forecasting requires input from Sales and Marketing departments
  • Capacity planning involves Operations
  • Ordering on suppliers involves Purchasing & Financial Planning
  • Reaching a consensus forecast requires agreement from all of them

Sales and Operations Planning seems to be one of the most difficult business disciplines to make stick, especially in medium sized organisations.

However effective S&OP joins up your organisation to ensure that customer service levels are maintained, while inventories and plant capacity are optimised a key requirement of business success, so it’s worth the effort to make it work.

For independent help and support in sales and operations planning 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. 

Transloading and Cost

transload distributionWhen transporting goods along your supply chain you’re, at some point, going to need to transload ocean-bound containers in order to bring inland to distribution centres and vice versa. When you transfer goods you do so without needing to sort out the contents for shipping to a single destination, which can greatly reduce cost. This is especially true when you have value-added services such as shrink-wrapping and palletising.

Saving as much as possible on transportation and distribution is one of the key goals of logistics. In order to make the most out of transloading, consider the following advice from our supply chain consultants.

  • Make sure that any savings you make are not outweighed by handling cost. Even if you save cash by clever rearranging of storage space and whatnot, distribution to distant ports will soon start to eat up any remaining funds.
  • Remember that you save more when ocean containers can be divided into larger yet less numerous units. The cargo in three forty foot containers can usually be stored in two fifty-three foot containers.
  • In addition, try to avoid costly containers. If you can get a cheap container that functions about as well as a slightly more expensive one, go for it. All those saved pennies add up.
  • Palletising during transloading can greatly increase a distribution centre’s handling efficiency.
  • Remember to factor in the time it takes to load, unload and handling into your overall transportation
  • Be careful that you haven’t placed more on your transport train than you should have. Most distribution centres will charge extra for surplus cartons.
  • It is often easier and more flexible to make an entry at the point of discharge, rather than the supply chain’s final destination.
  • Always plan in advance. The more time you give yourself between planning and actual transportation, the more able you are to deal with unforeseen hiccups in the supply chain.

Keep these in mind whenever planning for long-distance hauls and you should find yourself saving quite a hefty sum on transport and distribution costs. For more advice on logistics, be sure to visit www.total-logistics.eu.com or, alternatively, contact our friendly supply chain consultants on +44 (0)118 977 3027.