Crisis is an opportunity for speeding up Digital Transformation to enhance Agility, Resilience and Productivity – LogiSYM September 2020
The world has shrunk into a global village with better connectivity and inter-linked supply chain. Events within a country could have a direct and magnified impact on other countries as we are currently witnessing. Economic activities of a country are extremely prone to disruption to external factors, and businesses are no exception. Year 2020 has so far been very turbulent as the world is going through the Covid-19 Pandemic and the US-China trade war.
Companies are struggling to stay afloat as they have never faced a disruption of this magnitude. It is of paramount importance for companies to be extremely agile, respond quickly and manage their costs. Businesses and consumers alike are spending less and a tight cost control will help them to stay afloat. When we reach the new normal, companies cannot just hope to generate profits by selling large volumes of goods. They have to manage their costs effectively to deliver profits. Managing costs is primarily dependent on how a company manages its supply chain. Reducing the supply chain costs will help companies bring down the total cost.
Effective inventory management can help businesses save up to 30%. Inventory Management plays a vital role. Large amounts of money is locked up in the form of stock. Inventory visibility can be the difference between good or poor profitability. But how a company manage their inventory well?
Do you have complete visibility of goods in shipment, goods in stock and demand of goods? Does your company plan ahead and stocks up goods or stocks up only when running low on stock? Does your company do demand forecasting, before replenishing your stock? Does your company have pre-defined set of rules when it comes to inventory management? Does incoming inventory have a pre-designated place within the warehouse or is it placed randomly? Is data entry manually done at various systems within the warehouse? Is your warehouse systematically organised to help your warehouse personnel with picking and packing of orders?
Many companies are still dependent on spreadsheets to manage their inventory. This is a tedious and complex method of handling inventory. Spreadsheets are accurate to the knowledge of the person who created them. But also prone to errors and omissions. Simple spreadsheets can very quickly turn into complex spreadsheets. Not everyone can understand the spreadsheet. This leads to the organisation being highly dependent on individuals who create spreadsheet. Large amount of time has to be spent on analysing it, as spreadsheets are static. This affects businesses in profitability terms and efficiency, as businesses cannot decide faster.
Companies need to switch to smart solutions with respect to inventory, warehousing, logistics and distribution management. These activities are highly interdependent, monotonous and repetitive in nature. Same set of data flows through the chain. It is repeatedly entered at multiple points in the supply chain thus replicating the effort. It is essential for companies to have visibility and transparency with respect to movement of their inventory. Automation of these activities will not only provide visibility but also helps companies to save time and money. What you need is a comprehensive platform which solves your inventory problems and provides real time information flow through and beyond the warehouse. An effective inventory management system will help you save inventory costs up to 30% by helping to restock the right product at the right place and time. Real-time data gives state-of-the-art analytical tools to get accurate results. Using digital tools can give significant savings of around 30% on operational costs with transparency and real-time warehouse management systems. Our systems have helped customers carry out efficient inventory management, efficient operations and also carry out detailed analysis of the past and predict the future trends. Our systems help customers schedule deliveries, optimise routing and track the job from start to completion.
These are valuable technological advancements that companies can adopt to enhance their supply chain.
Digitization and Digitalization of supply chain:
COVID – 19 has disrupted several supply chains. Mainly those using outdated system, that provide less visibility, transparency and efficiency. Company’s growth is stalled by mountains of paperwork. it Companies must digitize their records, which is the first step towards digitalization. Through digitalization various processes in the supply chain can be streamlined, which then provides transparency. This will help to save cost and time. Digitalization will provide real time information to the with which an organisation can take informed decisions and have control over the supply chain. The organisation can concentrate on mitigating the effect of external factors on the supply chain processes.
Fusionova Technologies have been helping businesses in digitalising their business processes. With digitalisation our clients order visibility and processing ability has increased by 30%. The investment pays back itself within 6 months to 18 months depending on the extent of digitalisation effort. We have seen automation of the billing process in a 3PL operations saving manpower effort. Pays back n such an investment, is within 6 months.
Omnichannel Supply Chain, Agile Supply Chain and Circular Supply Chain:
Based on the nature of the goods sold, it’s better for businesses to switch to omnichannel supply chain model. Selling through brick and mortar stores is not going to suffice to generate increased revenue. Businesses should incorporate online selling as they can reach more customers in this manner. When a business adopts omnichannel supply chain strategy, they have to switch to smart solutions with respect to inventory and distribution, as they have to meet the demands of customers from the brick and mortar store and online customers.
Businesses can try to adopt circular supply chain strategies through which they can reduce, reuse, recycle, rework and refurbish old, worn out products, packaging material etc. through this they can reduce their carbon footprint and prompt sustainable business practices. It is important for a business to be sustainable as consumers are increasingly supporting businesses which adopts/prompts sustainable business practices.
With companies digitalizing their supply chain processes, this provides them with access to real time data, companies should leverage the data to derive insights which when combined with agile supply chain concepts can turn fruitful for businesses as agile supply chain concepts promotes increased responsiveness, competency, flexibility and resilience amongst various supply chain processes. Businesses need to be agile and resilient in addition to being efficient and productive.
Robotics and Internet of Things:
Warehousing involves manual and labour-intensive work and humans are prone to fatigue. This slows down the pace of progress of work in a warehouse. Businesses can start using robots in a warehouse to handle repetitive and manual work, like sorting, counting, arranging etc.
Sensor technology embedded in the IoT devices can help businesses to monitor inventory, automatic reordering, tracking deliveries, monitoring wear and tear on equipment etc. By using robots and IoT for inventory, warehousing and distribution management the processes can be automated this leads to time savings and cost for a company and frees up human resource from mundane and laborious work. In addition to this a company will be able to receive real time data, which is the most valuable resource for any business. We promote the usage of various IoT devices like Barcode scanners, RFID tagging, GPS trackers, temperature sensors, cameras, weight sensors etc to our clients. With the usage of the IoT devices they are able to receive real time information and manual data entry has reduced by 40-50%.
Analytics, Machine Learning, Artificial Intelligence, Big data:
Digitalizing the supply chain processes and usage of robots and IoT devices in the supply chain process , will generate huge amounts of data. And if well analysed cn provide valuable insights. With the help of analytics, a business can understand the past or present trends, customer preferences, market trend etc.
Artificial Intelligence, Machine Learning, Prescriptive Analytics can potentially help businesses with planning, decision making, demand forecasting, identifying purchasing patterns, inventory management etc.
Fusionova Technologies provide data insights about the past and extensively use analytics to help our clients in planning their future activities, like demand forecasting, automatic restocking etc. With the help of image recognition technology, we verify the physical state of goods/products before they are shipped. This has helped our clients to a great extent as they can avoid shipping wrong goods, shipping goods in correct quantity, shipping damaged goods which will cost them gravely and affect their reputation and credibility. This advancement has helped our clients to save few hundred dollars every week.
For any business which is inundated with paperwork, digitization should be the right place to start off with and slowly transition their supply chain processes onto a digital platform, with which they can achieve visibility and transparency in their organisation. Digitalization and automation will help business to save time, money and be agile. Analytics, Machine learning and Big Data will help to derive insights which cannot be perceived by the human brain, these insights will lay the foundation for an appropriate action plan, with its implementation any business will have a higher chance of survival in the turbulent times. Agility and resilience to withstand shocks in the supply chain along with efficiency and effectiveness of operations will determine the success or failure of a business.