By Ken Fleming, president of Logistyx Technologies – a leader in Transportation Management for parcel shipping.
Major events like trade wars, natural disasters, Brexit and the COVID-19 pandemic have shifted consumer behaviors and created supply chain challenges. This has forced retailers, manufacturers and suppliers across the world to revisit their global supply chain strategies and accelerate the adoption of cloud technologies to properly adapt and be better positioned to respond to future disruptions. As organizations reexamine their supply chains, boosting resilience has become as important for many as controlling costs and improving operational efficiency and customer service.
Most have more work to do. A Gartner survey recently found only 21% of respondents stated they have a highly resilient supply chain network today, meaning good visibility and the agility to shift sourcing, manufacturing and distribution activities around fairly rapidly. In a new landscape brought on by sustained increases in e-commerce and omnichannel distribution across most industries, more businesses are preparing their supply chains to compete and win.
As e-commerce fulfillment grows more global and complex, a digital supply chain that relies on automated cloud technology can help businesses harness a data-driven approach to increase flexibility and visibility while reducing costs. According to IndustryWeek, digitally agile businesses use automation to reduce cost and errors, while improving productivity and raising revenue.
Companies with a growth mindset deploy new technology to create a digitally agile supply chain and ensure a competitive edge in this fast-changing economy to scale quickly and meet customer demand. To effectively adapt to unexpected events and improve the digital agility of their supply chains, many organizations leverage state-of-the-art cloud technology to optimize, automate, and deliver more value for their business and customers.
Advantages of Cloud Supply Chains
Cloud-based solutions offer a clearer view into all areas of the supply chain, giving organizations better access to data to make better business decisions. From the cloud, businesses can seamlessly connect people, processes and third parties to their supply chain and shipping operations in real time, regardless of location and with minimal upfront costs and IT investment.
Already growing by leaps and bounds before the pandemic, e-commerce growth rates have only accelerated in 2020, requiring many types of organizations to fulfill unprecedented order volumes. More manufacturers than ever are shipping directly to customers today, and even e-commerce juggernauts have had to be creative to handle skyrocketing parcel volumes.
Increasingly, they turn to cloud-based shipping technology to enhance the speed, accuracy and flexibility of their supply chains, empowering all users to execute, track and analyze parcel shipping processes in a single solution. This improves reaction time, collaboration and decision-making accuracy when the unexpected occurs with a single customer order or an event that impacts the entire supply chain.
During the COVID-19 outbreak, for example, retailers with cloud shipping systems had the necessary visibility and agility to move inventory and convert temporarily-shuddered retail stores into distribution centers, keeping staff employed, meeting a ballooning demand to ship goods and selling store inventory. Whatever the disruption, a digitized supply chain improves a company’s abilities to anticipate risk, improve transparency and coordination across the supply chain, and manage the issues that arise from increasing complexity.
Since cloud technology helps shippers ensure all their information is updated automatically, it also offers them the agility to do things more quickly, including onboarding more carrier services to ensure each parcel arrives on time for the best carrier fee. Shipping information changes constantly – whether related to rates, fees or other factors, and cloud technology ensures real-time updates, which otherwise require impractical amounts of manual work. Increasing their carrier network not only helps shippers to decrease costs; this also allows them to improve and expand customer service.
Further benefits of a digital supply chain
Digitally mature omnichannel retailers get even more benefits from a digital supply chain. With technology running inventory management, order management and shipping all in one integrated system, they easily capture data from different systems to optimize the customer experience and minimize the cost of increasingly complex supply chain processes.
They can easily collect and organize their data to inform decision-making when unexpected events occur, but the business intelligence that results can transform processes. Along with rising e-commerce order volume, for example, rising returns volume can cost organizations millions, but business intelligence can help organizations identify and correct costly errors in fulfillment, merchandising and other areas of the business.
Business intelligence can also provide detailed insight into current costs, including total shipping costs, shipping costs down to the SKU level, costs by carrier, carrier service levels, on-time delivery rates, accessorial fees and more. These analytics can then be used to identify opportunities to save money and improve customer service.
For example, it may be standard operating procedure to book the least expensive carrier on a lane. However, the least expensive carrier might deliver late 40% of the time. While anecdotal evidence might not be enough to build a case for switching to a slightly more expensive carrier service, hard data can. With data, it’s easy to build a case for pivoting to a carrier with better on-time delivery performance to improve the customer experience and win repeat business.
Full Transparency for Customers
Cloud technology in the supply chain also improves the customer experience by providing complete transparency of an order’s journey from its point of origin to its point of destination. This allows shippers to monitor carrier performance and respond rapidly to any issue or disruption or to provide customers with self-service access to this information.
Thanks to the same carrier and partner integrations that enable shippers to select the best, most efficient carrier services, shippers can automatically track parcels after sending them and keep customers updated in real-time. Control tower visibility and dashboard reporting empower customer service teams to proactively troubleshoot exception events and communicate delivery updates to the customer in real time to increase transparency and customer satisfaction. For example, perhaps the product can be sent from a different distribution center to arrive on time or the customer may be willing to retrieve the product from a nearby store or locker.
Consider too that tracking delivery exception events enables businesses to capture accurate carrier performance data – improving carrier service measurement and giving them more maneuverability in carrier contract negotiations.
Create Agile Supply Chains with Cloud-Based Delivery Models
While only 21% might be readily resilient today, according to Gartner, half the world’s global leading enterprises will invest in developing some form of real-time transportation-visibility software by 2023. As more companies increase adoption of cloud technology to create a more agile supply chain and successfully navigate unpredictable environments, they will simultaneously improve the scalability, accessibility and security of their operations.
For businesses that want to be better prepared for future disruptions, embracing cloud technology for a digitally agile supply chain is a must. Growing customer expectations and rising competition in the marketplace make digitization required to stay competitive.
Cloud technology improves order fulfillment efficiency, helping make shippers more agile and empowering them to offer customers more flexibility and surpass competitors. Embracing the cloud makes supply chain innovation more sustainable, helping organizations stay resilient, improve their parcel shipping operations, and generate a quick and lasting ROI.