Key insights for business
Currently, the global supply chain remains in a state of flux. Indeed, experts have argued that the Covid-19 pandemic changed our contemporary economy. Some argue that these changes will never be completely reversed. The global supply chain is one of the sectors most affected by these changes. As the lifeblood of international trade, any major disruptions to the global supply chain should concern everyone. This is especially true of businesses that inevitably rely on this supply chain for their merchandise.
Asia was the manufacturing hub of the world, supplying Europe and America
The USA and many other industrialized nations have outsourced their manufacturing to Asia for decades. This was rationalized based on the lower production costs in that part of the world. Meanwhile, Asia was promising even better output with an increasingly skilled workforce. While the West (including America and Europe) was the main buyer of this output, an established equilibrium ran for years without much disruption. However, Covid-19 changed that to a great extent. For instance, there were significant disruptions to manufacturing in Asia as well as the operations of logistics companies.
The global supply chain was very vulnerable during the pandemic, and many realized there were gaps ignored for far too long. Nevertheless, efforts are to bolster this supply chain and foolproof it against future disruptions, including unknown global pandemics. Technology is a key component of this response. Technological advances support both manufacturing and transportation, so they are crucial to bolstering the currently faltering global supply chain.
Opportunities to relocate production
Having experienced the disruptions of Covid-19, some businesses are taking advantage of opportunities to relocate their manufacturing and production to be much closer to users and customers. The implication is reduced stress on the global supply chain. Indeed, there is evidence that production closer to areas of consumption becomes more resilient and efficient than models in which the consumers are far removed from the places where their preferred products are made. The challenge is transforming a supply chain so it can grow while leveraging the latest technologies for profitability and efficiency.
The starting point is choosing the right technologies from today’s diverse offerings. Moreover, it is important to invest in this technology so that it becomes a bespoke support system for your business. Some areas that might benefit from an injection of technology include the management of transport arrangements, warehouse coordination, routing, and fleet telematics. These options can be explored and operationalized for a range of business sizes. That means that start-ups and young businesses are not excluded from these developments.
Selecting the right technologies for your business needs
There is a selection of technology from which you can prioritize the ones that meet your current and future business needs. Here are a few to consider:
- Warehouse management systems or VMS: This suite comprises processes and software that are designed to assist businesses in better controlling their warehouse operations. For example, a warehouse management system can ensure that the appropriate channels are used to move raw materials and goods from manufacturing to shipping. This technology brings efficiency to receiving, storing, picking, and packing the cargo for shipment. It can also be deployed as an inventory management tool. VMS typically uses a range of facilitating innovations, including radio frequency identification (RFID) tags, scanners, barcoding, and databases that allow you to access the right information in real-time.
- Transport management systems or TMS: This comprises software that helps to plan, execute, and optimize inbound or outbound ships. Such a program is especially useful when managing raw materials and finished goods that must be delivered to specific scheduling. Some of the functionality that might be utilized includes the management of carrier rates, routing, tracking, reporting, documentation, and analytics.
- Warehouse automation: These are systems that best use autonomous mobile robots (AMRs), auto-conveyor systems, and robot pickets. Such technologies might be useful when dealing with staff shortages, as was the case during Covid-19. Even where you have staff, these technologies can augment your overall efficiency and performance. The accuracy with which these operations are managed using technology can be invaluable when processing large or precise deliveries.
Combining technology with other enhancements
Specific advantages associated with modern technologies include intelligent supply, visibility, relationship building, and profit maximization. However, there are other steps that you might need to take to ensure that you get a great outcome:
- Get the right people on your team: People are necessary to make all robots and technologies work to their best. These creative and innovative people can develop actionable strategies for your business. People can make decisions about data management and will give your company unique insights into how the tools can support the business.
- Invest in the people you have hired: The multiplicity of responsibilities on supply chain personnel means they need high-level and specialized training. You also need to ensure that they are safe in the working environment. This can be practical things such as wearing hats and protective equipment. The changing nature of technology may also necessitate upgrades on any training programs you already have in place. Apart from formal training programs, consider cross-training, mentorships, and coaching. This will keep your staff up to date with the major trends in the logistics and supply industries.
- Do not neglect young professionals: Whereas experience is to be valued, your business requires injecting new blood. There is much that Millennials and Gen Z have to offer to the supply chain because they have agile minds and are imbued with new knowledge that may have escaped their more experienced colleagues. It is also an important dynamic in workforce planning because your experienced stalwarts may soon be retiring or looking for other opportunities.
- Keep loyal staff close to you: The fact that you are reaching out to the younger generation should not be an excuse to discard loyal and trusted workers. Facilitate these workers by engaging in mentorships where their vast knowledge can be shared with younger generations. Your brand should value and support knowledge transfer at every opportunity.
Making the right strategic decisions
All these improvements are underpinned by strategic decisions and considerations. You can make important decisions about what strategy is best suited to your needs and ambitions:
- Are you a reactive or proactive supply chain? Reactive chains wait for things to happen because they are cautious and do not want to make mistakes. Proactive supply chains continuously seek new and better ways of doing things. They are not afraid of getting it wrong sometimes because those become business lessons for the future. Regardless of your strategy, use analytics so that your decisions are informed rather than merely relying on instinct and suspicions.
- Always put the customer first: The customer experience can make or break your brand. Technology is an ally when improving customer experiences. Supply chains that are digitally minded are writing the future before it even happens. End-to-end supply chains certainly need rationalization, coupling, and visibility, which can best be provided by leveraging your access to technology. Doing so will harness important data-driven insights into your business model.
The supply chain is not what it once was before Covid-19. The old models of churning out manufactured goods from the East and slowly getting them to the West and Europe will not cut it. Businesses must be agile and proactive in using technologies to harness their customer base and penetrate new supply areas.