I read an article that other day that said ‘Logistics is the new Black.’ Logistics and supply chain are two words that have increasingly become part of everyday conversations for merchants as your businesses become more complex.
You sell on multiple sales channels to different customer types who buy on multiple devices. You work with different suppliers and partners. You fulfill orders through various 3PLs and warehouses.
The supply chain has become the backbone of successful businesses. It’s key to being able to meet evolving customer demands. To keep you up to speed, this article covers some of the big trends in supply chain management right now.
Supply Chain Management = Better Customer Experience
Merchants are coming to the realization that supply chain management is directly tied to the immediate customer experience.
Today’s customers demand a seamless shopping experience as they bounce back and forth from online to offline shopping channels. They research on the mobile phone, compare online, buy in-store, and buy online. They expect consistency and transparency no matter where they shop with you.
Customers demand options such as “buy online, pick-up in-store.” They want to return an item in-store that they bought online. If you don’t have inventory in-store, they want you to order it in-store for them and ship it to their house. Customers expect expedited shipping, free shipping, and accurate tracking updates.
Customers are searching for this exceptional service. You can bet they will be loyal to the merchants that provide it.
To offer this type of experience, merchants recognize that they need to make improvements to their supply chain. You need to be able to provide a seamless outgoing and reverse logistic services to your end customers, no matter what channel they buy from.
To make sure you don’t get left behind, here’s some of the big trends in supply chain management you need to know about.
Big Trends in Supply Chain Management
These supply chain management trends expand over technology, processes, and strategy. Check out what the future of supply chain management looks like:
1. Digitization of the Supply Chain
Online sales grew to $335 billion in 2015. There are now more digital customers who are researching and buying online.
Businesses are also now more digital. Financial and businesses processes are using digital technology to be more productive.
It’s no surprise then that supply chain management is following suit by becoming more digitized. Powered by cloud, mobile, and nearly ubiquitous connectivity, the linear supply chain is changing. It’s evolving to serve these digital customers and efficiently work with your digital business technology.
Merchants should have the ability to drop ship with suppliers, work with 3PLs, split orders for fulfillment costs, view inventory visibility, and more. To handle this complexity, merchants need a global view of their fulfillment processes in order to intelligently route orders for inventory procurement and demand optimization.
This type of dynamics order management requires end-to-end visibility, collaboration across fulfillment processes, real-time data automation among different companies, and integration among multiple systems. This convergence of processes and systems will rely on digital technology.
This is why 45% of retailers have reported that they will invest in multichannel fulfillment technology in 2015-2016, as according to the 25th Annual RIS News/Gartner Retail Technology Trends Study.
See more on how the consumer is driving supply chain digitization.
2. Innovative Retail Technology
Retailers are bringing innovative technology to their stores. Your warehouses could also benefit from the same technology to manage their supply chain processes. These technologies include augmented reality and artificial intelligence.
DHL Trend research shows how digital displays can help optimize inventory picking in warehouses, visually plan out facilities, efficiently load freights and containers, re-route shipments on the fly. Augmented reality technologies likes these are already being tested in the field.
Other technology advancements include artificial intelligence. AI could help produce more advanced predictive technologies that improve the efficiency of the supply chain. There’s also the possibility of self-driving trucks.There’s already the use of robotics and machines in supply chain.
Certainly, more innovative technology will come into play in the future.
3. Collaboration, Automation, and Integration
A dynamics supply chain depends on multiple systems, companies, and the movement of data between the two. To create an efficient process, your supply chain will rely on system integration, data automation, and collaboration going forward.
Merchants have their own sales channels and inventory and order management systems. They also work with suppliers, warehouse management systems, and 3PLs. All of these systems and companies must work together to create a seamless supply chain process.
You have to know how much inventory your drop shipper has. In-store associates have to look up online inventory levels. Suppliers needs to see your inventory levels so they can fulfill your stores in correct amounts.
Despite there being many systems and players, your supply chain processes must treat everyone as if they are in the same organization. This requires system integration and data automation.
Systems must be able to talk to each other so that inventory, order, and shipping/tracking data can be shared automatically as orders are processed. To do that, systems will need to be tightly integrated in order to give real-time visibility into data movement.
But, not all companies have the same cultures and processes. This can it make it difficult when talking about integration and data automation. Therefore, it’s going to take collaboration to make all your processes work together.
4. Need for Flexible Software Infrastructure
With so many processes coming together across different organizations, another supply chain trend is the need for flexible software.
Older companies are stuck with legacy software that is separated from other company and supplier processes. In this case, it’s hard to automate information in real-time causing your processes to be slow and error-prone.It’s also difficult to update your processes or software as your business evolves.
You might need to add and remove different sales channels, suppliers, or companies that you work with. But when you do, it can slow down the efficiency of your company because it adds complexity.
It shouldn’t take years or months for new suppliers to get up and running with you. Amazon can start working with a new supplier as quick as one day.
Your supply chain systems’ software should allow your company to be flexible. When companies are putting together their technology stacks, they’re making sure that their infrastructure is still flexible with change. So, your company can evolve as the retail landscape evolves.
The more flexible your software is, the easier it is for you to make quick decision making. You can quickly add suppliers, sales channels, or 3PLs, or remove any of them.
See how a cloud-based platform like nChannel’s can help integrate your fulfillment processes, giving you the flexibility you need.
Also, trending in supply chain management is the use of analytics. Companies needs to use analytics every day to make better, informed decisions.
Digital technology helps make the use of advanced analytics easier. Your company will have access and visibility into more useful data about the efficiency of your supply chain.These analytical insights can help automatically identify best practice improvements. It can also help predict what actions that your business needs to make.
More companies will use advanced analytics to continually improve their supply chain processes.
6. Supply Chain Management as a Competitive Advantage
This last supply chain trends wraps up the other five trends together.
Merchants are recognizing that supply chain management is the backbone of their business. It’s key to creating the seamless customer experience that you strive to bring to your customers.
Merchants are making changes to their supply chain based on creating better customer engagement and experiences. These changes are aimed to be used as a competitive advantage.
Merchants that provide multiple delivery options, free and fast shipping, seemingly endless aisle of inventory, and easy returns will gain more customers. Those shoppers will become repeat buyers, or loyal customers.
These merchants will have a leg up on their competition. It will be hard for others to compete against them who can’t offer the same level of service. These merchants are using their supply chain advantages to win their market.
What to Do Next
Supply chain management and logistics are not a taboo of your business. Advancements in technology, processes, and strategy are helping make supply chain management easier for businesses. These trends show that.
Also, these supply chain trends demonstrate that your fulfillment processes can determine how well you can service your customers. Don’t wait to update your process and technology before you get too far behind your competition.
Dynamic supply chain processes for multichannel selling environments isn’t easy though. Keep learning more about advanced order fulfillment practices:
- Distributed Order Management as a Competitive Advantage
- What We’re Reading: Supply Chain Trends
- How to Use Endless Aisle to Improve Customer Experiences
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