Five Trends Keeping Supply Chain Specialists Up At Night

Franz Hero

It’s easy to sleep with a clear mind. But with increasing supply chain pressures gnawing at your brain, it can be hard to get any shuteye.

Between meeting customers’ needs for individualized products and ensuring your partners, people, processes, and products remain connected, supply chain specialists have plenty of issues to worry about.

How can you solve your enterprise’s greatest industry challenges and finally rest easy? Technology is the answer.

Let’s examine five key trends impacting supply chain and look at how your organization can excel with innovative solutions.

Trend #1: Individualization

One-third of today’s consumers are interested in personalized products. From shampoos with specific fragrances to automobiles with uniquely tailored dashboard displays, buyers have their sights set on items that are specially designed for them.

The problem with this, of course, is twofold: The cost of manufacturing customized products can be high, and creating too many unique goods may not be commercially viable.

So, how can your enterprise meet customers’ demands for personalized products without breaking the bank or producing a surplus of goods?

By using an integrated business planning solution – one that combines demand sensing, machine learning capabilities, and multi-tier inventory optimization – you can more accurately predict demand and lower your overall inventory levels.

With enhanced demand sensing and planning, your business can analyze demand signals – such as ordering patterns, point-of-sale data, seasonal events, and promotions – to create accurate monthly, weekly, and even daily forecasts. More accurate forecasts ensure you don’t wind up manufacturing, ordering, or carrying too much or too little of a particular product.

The ability to predict the precise number of goods required helps guarantee you have enough of a certain product available for customers, allowing you to maintain high service levels while also ensuring your distribution centers aren’t overstocked with surplus target and safety stock inventory.

Better demand sensing and planning capabilities have helped businesses improve forecast accuracy by as much as 60%.

Trend #2: Globalization

Globalization has ushered in the sharing economy. In your personal life, you’ve likely benefited from this new reality by catching a ride home with Uber after a night out or renting a vacation home through Airbnb.

But how has the sharing economy impacted your business? It’s possible it hasn’t. After all, only nine percent of companies consider themselves “fast movers” when it comes to capitalizing on the monetization opportunities presented by the sharing economy.

Still, many companies are embracing this networking idea, sharing warehouse and transportation capacity, as well as supply chain planning, execution, point-of-sale, device, and sensor data. This helps enterprises reduce costs, improve visibility, and provide customers with superior service.

By extending your company’s integrated business planning and supply chain execution to your partners, you can synchronize planning and streamline operations across your entire supply chain network. Adding these capabilities is crucial to sharing essential data and documents and orchestrating processes in real time, regardless of company, system, and geographical borders.

Deploying a business network platform is the key to achieving this. In addition to profiting from a connected community, shared content, and hosted applications, your business benefits from stronger infrastructure and operations that result in better and more secure visibility, collaboration, and business-to-business integration. For instance, a global, multi-modal logistics business network can provide your enterprise with greater end-to-end shipment visibility and help support efficient international trade collaboration.

With a business network platform easing communication and reducing costs, there’s no better way for your supply chain network to capitalize on the opportunities presented by today’s sharing economy.

Trend #3: Connectivity

Connectivity makes business partner collaboration stronger. By integrating machines, devices, and sensors – and sharing real-time data generated from your assets – you can ensure more accurate planning and digitalize your logistics processes.

In the warehouse, connectivity can help you optimize your operations through automation. You can use intelligent storage and retrieval systems, conveyor belts, sorters, and autonomous guided vehicles to radically transform your warehouse processes.

By connecting your products and transportation resources with innovative Internet of Things (IoT) technology, you can achieve real-time visibility with end-to-end, in-transit tracking and performance insight. When a truck is close to a pickup area or delivery destination, your business can automatically provide customers and business partners with just-in-time delivery notifications, gate check-in details, time-slot booking options, and outbound processing alerts.

Moreover, continuously monitoring the condition of your products and their location can help you mitigate risk. By analyzing your data with an advanced supply chain solution, you can predict delivery arrival times and delays and explore how that will impact future production and shipments.

Real-time connectivity between business partners and vehicles also equips your enterprise with the ability to resolve issues quickly and commence transportation re-planning, if necessary.

Trend #4: Mobility

By the end of 2017, more than 2 billion people will have made purchases on their mobile phones or tablets. And just as consumers are increasingly using mobile devices to buy goods, employees are using mobile devices to process, fulfill, and deliver e-commerce orders.

Connecting your mobile devices with an integrated e-commerce, warehousing, and transportation system allows you to streamline your order fulfillment processes for quick, efficient, and flexible customer delivery.

An integrated supply chain execution platform that works with your company’s mobile devices can help you achieve this, enabling you to deliver goods during customers’ preferred drop-off times and better manage order consolidation, truckload planning, routing, and outbound processing.

With handheld and hands-free devices, including pick-by-voice and augmented reality tools, you can simplify your employees’ jobs. Warehouse pickers can more efficiently process orders, while truck drivers know exactly which route to take or package to deliver. Additionally, event management software with real-time location tracking provides transportation planners, drivers, and customers with information around expected delays or delivery changes.

This is a prime example of how IoT can help you support a fully integrated, end-to-end order fulfillment process and save your company time and money with lower shipping costs and faster customer deliveries.

Trend #5: Sustainability

Sustainability has long been a key supply chain trend – and it’s an industry topic that will continue to grow in importance.

The best method for creating a sustainable supply chain organization is running your supply chain as efficiently as possible. One way your company can achieve this is by using integrated business planning and transportation management software.

These tools can help you optimize logistics, enabling you to consolidate shipments, maximize truck and container load utilization, streamline transportation routing, and support just-in-time cross-docking and delivery appointments. This results in fewer delivery vehicles on the road, a decrease in fuel consumption, and a reduced carbon footprint – not to mention considerable cost savings.

Avoid becoming a supply chain insomniac

The five trends impacting today’s supply chain industry – individualization, globalization, connectivity, mobility, and sustainability – present myriad challenges. And while they can be cause for concern, they don’t have to keep you up at night.

After all, now that you understand how the latest technologies can help you navigate these waters, you can gain the agility and responsiveness you need to elevate your enterprise to new heights.

This should help you rest easy – and avoid becoming a supply chain insomniac.

The supply chain is evolving at an unprecedented pace. SAP solutions help you to connect people and processes to optimize efficiency and delight customers. To find out more, download our white paper “Transform the Supply Chain and Logistics into Demand Networks: How SAP Solutions Enable Next-Generation, Real-Time Demand Networks.”


Franz Hero

About Franz Hero

Franz Hero is Senior Vice President of Supply Chain and Logistics Development at SAP.