Tag Archive: ecommerce

Supply Chain Management Is Evolving: How Will It Affect Your Enterprise?

June 12th, 2018

Operational efficiencies, productivity improvements, and cost savings are the top-three strategic advantages of cloud-based supply chain management, according to an IDG survey of senior managers and directors around the world. To gain these advantages, enterprises need to have infrastructure that helps them cost-effectively harness their large data workloads and move to the cloud easily.

In fact, the biggest challenge for most companies is figuring out how to have their on-premises infrastructure engineered in such a way that it mirrors the capabilities of the cloud. This way, when companies are ready, they can take their supply-chain data and make a seamless, fast migration to the cloud. Whether you’re a manufacturer, retailer, or large corporation, companies looking to gain real-time, complete visibility in their supply chain require integrated infrastructure with scalable data storage, processing, and computing power to get the job done.

To better uncover these benefits and how innovation and infrastructure are changing the supply chain, I spoke with Oracle and shared insights around helping businesses maximize value.

You’ve said that the customer experience continues to play a role in the transformation of supply chain management. How is it impacting both B2C and B2B industries?

We’ve all become accustomed to getting whatever we need, whenever we need it, with frequent status updates and easy returns. We’ve raised the bar. And it leads to a host of challenges for vendors, mainly in the sense that they need a wide breadth of products available to meet customer demand at any time.

Even though the vast majority of my clients are not in the retail or B2C world, they’re all impacted by this elevated experience. I was recently talking with a couple of distribution executives who said that, several years ago, there was a small percentage of deliveries that were due on the same day, if any. Now, roughly 80 percent of the orders they receive are expected on the same day. They’ve had to start working on Sundays because customers—including business customers—are expecting these extremely rapid deliveries.

There are several other ecommerce themes that are changing supply chain management. One is 24/7 accessibility: the ability to place orders and look up your order status whenever and wherever you are. Another is rapid customization. One of my clients has become number one in his industry by making sure his company provides not just rapid deliveries, but also quickly customized orders. His company does things like paint on the fly, which doesn’t normally happen in manufacturing.

What is the technology that is making this supply chain management transformation possible?

Blockchain impacts supply chain management by allowing for immediate visibility and transparency of global financial transactions—like electronic data interchange (EDI) on steroids. When products require traceability, such as if you have a recall, you can use blockchain to immediately see where your products are in the supply chain and who paid for what. That traceability can certainly be achieved within ERP software already, but if you require the next layer of complexity and immediate transparency, then blockchain technology could be useful.

Big data is another aspect of technology that is changing the supply chain landscape because companies can better tailor the customer experience when they know more about what the customer wants. IoT comes down to data, because you’re trying to attach the data together between different devices. In manufacturing, IoT shows up in preventive maintenance and anticipating when a machine might break down before it happens. When you see how different elements are working together, you can target what needs to be fixed or maintained, without just following a schedule that may or may not be addressing a real problem. This can reduce waste and improve efficiency.

But data is just as challenging as it is helpful. Before we get to work every day, we receive lots of messages between emails, texts, videos, billboards, and messages from our cars—everything is connected these days. The biggest challenge that my clients face is that they’re overwhelmed with data, but they also want and need the data to provide a better customer experience and understand what their customers really need. And they also want to figure out how to do that in a scalable and profitable way.

The challenge is how to sift through all the data that’s collected and put it all together into something meaningful and provide information at your fingertips. My clients are very interested in solutions like dashboards, and it’s a key ingredient in selecting the software; however, getting it implemented correctly is difficult.

 

It sounds like the right infrastructure that can manage multiple data sources and provide actionable insights can improve the entire supply chain process. What about the role of the ERP system in supply chain management? 

We’ve improved supply chain performance significantly by focusing a lot of effort on the demand plan. Instead of using the older perspective of a monthly forecast and whether it’s accurate as is, we’re looking at how we can do this in a more agile, flexible way. The ERP system needs predictive analytics to be able to modify a demand forecast on the fly.

Also, by using vendor-managed inventory systems, we’ve been able to reduce lead times. We’re able to meet short lead time orders that we couldn’t previously meet, with the same or slightly lower inventory levels, at a 5 percent margin improvement. It wasn’t solely due to demand planning, but that was the first step.

Once you get beyond demand planning, the next element is going to be a more agile production schedule geared to the customer—one that’s going to offer suggestions, give you notices, and be exception-based, so that you don’t have to put as much manual effort into it. The demand plan flows down into the production schedule, and then capacity analysis is the next key topic.

What steps can enterprises do to modernize their supply chain management?

We’re in the era of the customer, so start with the demand side of the equation. There are ways, regardless of what your tool set is, to improve upon your demand now and your prediction of future demand. You may not have a system in place to do this yet, but regardless, you should be doing more to look at the demand within your supply chain.

One other quick tip is to look at what information you are getting out of your system and how you can better utilize that information. I find that no matter what client I’m working with, we can always do a better job of accessing information and taking the most relevant information to make better decisions. Even if your system isn’t yet modernized to the point of predictive analytics, you want to move in that direction. You can do this by just getting information from multiple sources and creating a simplified database.

What will supply chain management look like in five years or 10 years from now, and what technology can help take enterprises there?

We’re going to continue seeing the ecommerce effect: the importance of speed, responsiveness, and agility, and the rise of smaller, more frequent orders. All of my clients are interested in managing their vast supply chain networks with lower costs, but better service. They’re trying to find technology to support these goals and figure out how to automate using AI and data.

One ideal future is with 3D printing, because you can print what you need, where you need it, when you need it, and further extend your supply chain. Even then, distribution is going to have costs associated with it, and the last mile will continue to be one of the biggest challenges. Delivering all these smaller, more frequent orders to both consumers and businesses impacts transportation negatively and your distribution network significantly. You need your inventory strategically located closer to a customer, or to have flexible manufacturing capabilities that can respond quickly to demand. The system comes into the picture when you want to set up your network to have what you need, where you need it. How to improve delivery metrics will continue to be a key consideration in the future.

If we can reduce the cost to manufacture and distribute inventory by leveraging supply chain management tools, we can reduce prices and actually do something as radical as bringing more manufacturing back to the U.S.

Take a Deeper Dive…

Supply chain management professionals are eager for new ways to leverage data to drive business value. It is important to understand, however, that successfully using big data requires the right infrastructure designed to manage multiple data sources and provide the computing power to deliver actionable insights across the entire supply chain process. The key to gaining business value from supply chain data is by using big data infrastructure that can acquire, store, process, and analyze huge amounts of data workloads for supply chain insights.

 



Top Importers & Exporters… E-Commerce Impacts

June 2nd, 2017

According to the Journal of Commerce, the top importers were impacted by e-commerce and that trend is expected to continue. Imports grew by 8% last year (2.2 million TEU) whereas exports grew by 3% (just under a million TEU). The rankings are showing signs of a shakeup with the surge in e-commerce and Amazon. In 2016, Walmart rated #1, Target #2 and then Home Depot and Lowe’s as #3 and 4.

e-commerce

For example, the retail industry woes are highlighted by Sears and Walmart. Sears sales slid by almost 10% whereas Macy’s slid almost 4% and Payless filed for Chapter 11 protection (all top 100 importers) while Amazon increased 27%. Last year, e-commerce accounted for 8.1% of retail sales and it’s expected to increase by 10% by 2022. Walmart fared a bit better but spent several billions to purchase JET.com. And, Target is also testing next day deliveries. Small orders delivered rapidly is the future!

Not to leave exporters out of the mix, as a matter of interest, the top exported product is wastepaper with beef products also high on the list. 5 of the top 6 relate to paper and packaging such as Koch Industries with the holdout being an animal feed/grain exporter.

What Should We Consider and/or What Impacts Could Arise?

Clearly, we must pay attention to what our customers are communicating — they want small orders more frequently — with rapid deliveries. How will we accomplish this goal? We can certainly outsource the capability or, if we see it as a strategic aspect of the business going forward, perhaps we should think about how to incorporate into our strategic capabilities.

From a sales and customer perspective, start looking at e-commerce capabilities. 24/7 access is a must with the ease of doing business built into the process. You’ll need to integrate into your ERP system or find a way to work collaboratively from a process and systems perspective one way or another to maintain high service levels at reasonable efficiency levels.

From a warehousing perspective, handling e-commerce is quite opposite of handling pallets and bulk shipments. Think about them as two separate warehousing functions. There is quite a bit of automated equipment and technology that can help you automate and increase efficiency. But don’t just jump in and sink. Start researching, ask experts and build a plan. There is no time to waste!

 



Why ERP Selection is a Strategic Topic

April 8th, 2016
ERP success

LMA’s ACE process matches a business’ critical success factors in combination with best practice business processes, unique systems differentiators and supplier partnerships to achieve end game results with ERP selection and design.

ERP (enterprise resource planning) systems are the backbone of every manufacturer and distributor. Just take a look at what happens if the system is down for a few hours. People pack up and go home. That is a bit discouraging as we should know how to run manual processes; however, that’s a topic for another day. The bottom line is that we use ERP systems to place customer orders, purchase materials, plan production, ship product and invoice customers. They are cornerstone to success.

Not only do we use ERP systems for these core functions but there are also opportunities to leverage advanced functionality to drive business results:

  • Scalable growth
  • Supports new customer types such as e-commerce
  • Improved customer service levels
  • Higher margins
  • Accelerated cash flow
  • Increased productivity and levels of automation

My most successful clients see their ERP system and the use of their ERP system as a strategic business topic. My new proprietary process, ACE aligns critical success factors for endgame results with ERP selection and design.  Please contact me for more information about how to use this process to elevate your business performance.

Did you like this article? Continue reading on how to strengthen your Eagle Eye:

What Is Important for ERP Success?

4 Critical Success Factors Key to ERP Success