Responsive Supply Chain article originally published by, and permission to publish here provided by, Dave Joseph at veridian.info.
Creating a Responsive Supply Chain in advance of the peak shopping season is a no-brainer. While the season is usually described as the time between Thanksgiving and Christmas, responsive processes have a lasting effect.
A Responsive Supply Chain offers greater flexibility with labor management, streamlines warehouse operations, reduces dock constraints, and much more. Managing the balance between peaks and lulls is essential, and supply chain leaders are starting to focus more on building responsive, proactive strategies well in advance of the peak holiday shopping season.
As noted by Inbound Logistics, “Many manufacturers start assembling products, mapping out product specs to determine capacity needs, and working with their transportation and distribution partners on reliable and cost-effective logistics solutions up to six months in advance.”
To stay competitive, leaders need to understand the value of a responsive supply chain and what best practices to follow to build responsiveness intuitively into the supply chain.
Why Warehouses Need Responsive
Supply Chain Functions
Responsive Supply Chain functions are critical to successful peak season operations. Customer behaviors may change rapidly, and there are ongoing geopolitical disputes, such as the US-China Trade War, that impact the supply chain. The continuing escalations of tariffs created an odd problem this year. As explained by Logistics Management, the upcoming peak season is already throwing a wrench into supply chains across the country.
Even while inventory remains in place, shippers are uncertain what exactly needs to happen. Beacon Economics’ International Trade Advisor Jock O’Connell delved into the impact the tariffs have had on inventory:
“I keep wondering where all the peak-period imports will go, given the stories I continue to hear of companies still storing goods they brought in late last year under tarps out in the employee parking lot. There appears to be a huge amount of unsold inventory in the supply chains. It bears repeating that people should not assume that all imported goods go directly into the consumer market. Importers of machine parts or intermediate goods or institutional cleaning supplies who stocked up in the last quarter of 2018 may not be big importers this summer and fall.”
Without a Responsive Supply Chain, shippers may reorder products, overorder in anticipation of the season, see surges in inventory carrying costs and incur other problems.
The Benefits of a Responsive
The benefits of responsiveness in the supply chain are significant, including:
- Improved use of just-in-time fulfillment.
- Ability to leverage cross-docking and drop-shipping.
- Automated exception management to get around the next “storm.”
- Reduced inventory carrying costs.
- Improved customer service.
- Increased accountability throughout the supply chain network.
- Decreased risk of damage, out-of-stocks, and other inventory management problems.
- Improved competitive advantage.
- Better use of data in preparation for the next surge.
Best Practices in Building Responsiveness in Your Enterprise
While a Responsive Supply Chain can help shippers attain higher profitability throughout the year, it helps to have a few best practices to fall back on, such as:
- Implement systems to collect, analyze, and track data.
- Ingrain flexibility into all operations, keeping an eye on demand forecasts and continuously managing performance, says DC Velocity.
- Integrate all supply chain systems to share data seamlessly and build comprehensive management strategies.
- Connect with customers via the omnichannel supply chain, building seamless experiences and gathering more granular, detailed data in each interaction.
- Reassess the state of new and legacy systems to determine opportunities for improvement.
- Expand the supply chain to include new vendors, logistics service providers, retailers, and other partners.
- Have a backup plan for increasing the workforce size rapidly, such as temporary staffing services contracts.
- Train staff. Train managers. Train temporary workers. Train drivers. Train vendors. Train everyone on standardized operations.
Increase the Value of Your Supply Chain With the Right Partner Now
A Responsive Supply Chain is ready to answer demand and always focuses on the need for continuous improvement. A highly flexible, automated, and responsive supply chain is critical to both competitive advantage and success throughout peak season and into the future. Of course, even with a set of tips in hand, shippers must not forget the value of a third-party consultation to find even more ways to augment process management.