How Modern Supply Chains Can Thrive with Elastic Logistics- LogiSYM October 2019
Supply chain and logistics managers are feeling the impact of rising consumer expectations that come with the ‘now economy’—a time when products, services and experiences are expected in an instant. The immense volume of deliveries passing through the logistics network creates a constant peak for all supply chain providers. With brands like Amazon Prime and Alibaba setting a precedent for immediate communication and fast delivery times, it’s evident that businesses, of all sizes across every industry, need to adapt to keep up.
Unfortunately, many businesses, especially in Asia, are overwhelmed by logistics and infrastructure challenges and unable to compete in the terms of scale, network, capacity and innovation. Add to this fluctuation in demand, environmental challenges and political disruption (for example, the US-China trade tensions) and supply chains globally are in a state of turmoil. In this environment, what these businesses need is an “elastic” approach to logistics; an approach that is always-on, consumption-based and scalable.
Drivers of supply chain innovation
For decades, supply chain innovation has been driven by a desire to reduce costs. However, new research commissioned by BluJay Solutions found supply chain professionals expect customer experience to overtake price and product as the number one-brand differentiator in the next five years.
A shift in market behaviour means that businesses, whether delivering packages, experiences or any other product or service, must start to view customer satisfaction as crucial to delivering value. In the supply chain, this means focusing up on the all-important last-mile logistics, as well as real-time visibility based on evidence that customer satisfaction is increased by digital communication between supplier and consumer.
Delivering value in this way requires systems that provide seamless partner connectivity and data quality. The technology exists to help businesses adapt to this market shift; it is only a matter of which businesses are ready and willing to rework their priorities.
A good example of this is Dannon, a leading global food company that partnered with BluJay to address increasing customer demands and complexity in today’s fast-changing marketplace. As customer-demand grew, Dannon needed a way to deliver products to supermarkets as quickly and efficiently as possible. This meant tracking hundreds of loads daily across three manufacturing plants, six distribution centres and liaising with numerous trucks from third-party carriers.
The challenge was coordinating the above while meeting customer demands for better scheduling options and increasing on-time delivery windows. With BluJay’s guidance, Dannon moved away from outdated processes and systems like communicating via faxes and phone calls between siloed departments to BluJay’s unified transportation management solution (TMS) that allowed for real-time visibility between moving parts.
Dannon leveraged the power of data captured in its TMS to support planning, execution, claims and appointment scheduling, enabling end-to-end control and visibility across the entire supply chain.
As the Dannon case study illustrates, having an optimised supply chain allows tracking systems to update both businesses and customers alike, while data-driven collaboration between logistics partners ensures that goods can be moved efficiently. Instead of focusing on ‘lean’ practices, logisticians should look to flexible systems to expand and reduce capabilities, accommodating changes in demand within the supply chain.
As it stands, global customs and compliance can be a challenge for businesses. Add to this political disruption, like the US-China trade tensions or delays to Brexit deals, and there is prolonged uncertainty for the supply chain community. Supply chains can survive such barriers with end-to-end supply chain visibility to help mitigate disruption.
A good example of this is the ongoing China-US trade tension, which for the US will likely spur a surplus of soybeans and other high-volume exports previously consumed by China. The flow-on effect of this will lower the price US producers will be able to get for their products, creating a spiral effect where farmers are unable to meet their financial obligations, reducing related industry purchases such as equipment and likely leading to more government subsidies to keep them afloat. Here, the flow-on effect will result in higher manufacturing costs and steel tariffs, encouraging companies to implement changes to their supply chin.
Considering the heightened tariffs and instability, many US multi-nationals are looking to alternative sourcing in countries such as India. Here, navigating India’s complex customs rates, which vary according to the product, user, specific export promotion program that’s open to administrative discretion, makes supply chain predictability a challenging task.
Elastic logistics is the solution
Disruption—whether it’s political, environmental or technological—has a direct detrimental effect on modern supply chains. However, logisticians can also view this as an opportunity to expand or diversify their footprint. For example, with the China-US trade tensions, we are seeing businesses looking to Vietnam or Indonesia. But, how can businesses set up their supply chains to withstand disruption and capitalise on growth opportunities that may arise?
The answer: become ‘elastic’. Modern supply chains require flexibility to manage fluctuations in consumer demand and disruption, like the aforementioned scenarios. No doubt, operation in a static, closed on-premise transportation solution limits what an organisation can achieve. With the use of elastic logistics practices comes efficiency, visibility, the ability to scale and optimise quickly and increase overall customer satisfaction.
One important step to achieving an elastic supply chain is to join a global trade network. The power of network lies in its ability to bring clarity and visibility to everything that is happening within the supply chain, while offering on-demand connections to potential carriers that have execution capabilities when needed.
For example, when partnering with BluJay, customers gain the advantage of a cloud-powered portfolio of application services, hands-free customs, real-time data analytics and the visibility and velocity to adapt quickly. This includes access to a network that spans more than 40,00 members globally—including shippers, carriers, forwarders, suppliers and 3PLs—that can be easily tapped following a surge in consumer demand or unexpected disruption.
Global transportation management platforms can scale with your business, helping experts create frictionless, high-performing supply chains where goods cross borders quickly, information is shared easily, users operate efficiently and cost is reduced from operations.
Many in the industry take an ‘if it ain’t broken, don’t fix it’ approach to their supply chains. This is risky; we’ve seen businesses like Kodak and BlackBerry that have rested on their laurels been superseded by customer-centric businesses like Amazon. These businesses are constantly looking to improve and innovate on a daily basis, capitalising on shifts in consumer demand and the market. The companies that succeed in the modern age will be those that prioritise customer experience and set up their business to adapt with elastic logistics.