Improving Supply Chain Network Strategies
Today’s world of disruptors and changing consumer behaviors drives companies to continuously revisit their network strategies. Social media ads, mobile purchases, and same-day delivery changed the way we shop, and keeping customers happy has become a challenge. Jason Deloach, vice president of engineering at Americold, offers these tips to create a flexible,demand-driven supply chain.
1. Understand your competitors’ capabilities. Future growth will come mainly from omni-channel capabilities and fulfillment strategies that are currently not in place. Compare your supply chain against your competitors, utilize industry or private benchmarking databases, and map out competitor nodes as the platform for change in your organization.
2. Invest in a data analysis and network optimization tool. It is not feasible over the long run to conduct data analytics on unrepeatable spreadsheets. Select a network optimization tool sponsored by a company that invests in research and development, and supports your team with ancillary consulting services when your workload gets heavy.
3. Continuously feed your analysis tools with data. It is critical to automate the feeds from your warehouse, transportation, and order management systems into a repository. The data warehouse should provide historical line-level information with the ability to analyze what-if scenarios.
4. Run a network strategy every six months. Frequent network evaluations enable sound decisions around SKU rationalization, cross-docking opportunities, node constraints, and regional distribution center locations. Utilize a top-tier network strategy tool that supports total cost of ownership.
5. Invest in warehouse automation. Develop a facility design with automation capabilities to support high-speed order fulfillment, cross-docking, and value-added services.
6. Determine what your data is telling you. Your detailed daily line-item data will help you understand service levels, volume shipped, inventory levels, carrying cost, and transportation opportunities. Build capacity models that can send warning signs prior to a site running over-utilized for several months.
7. Leverage bracket pricing transportation opportunities. Consolidating freight by having vendors ship into a single node and forward-moving freight downstream will increase truckload volume. The capability to slide vendor inventory from public to retail-specific accounts adds savings.
8. Use a common software execution layer. Implementing a common execution system enables product to move efficiently. Providing real-time inventory visibility while product is in transit or in automated staging is critical.
9. Implement a visibility-enabled IT application. Your IT team should deliver a cloud-based, user-friendly tool that pulls all the KPIs, production data, and timestamps out of your various sub-systems. Create a single metrics repository that provides visibility to every pallet or case move with real-time inventory positioning.
10. Pick the right partner. Choose a partner with broad supply chain understanding and engineering resources. The provider should seamlessly launch your business without exposing you to service degradation.