Navigating supply chain disruptions

Will Lovatt at Deposco Europe explains how innovative processes and technologies can help organisations manage  disruptions to supply chains

 

In today’s interconnected world, businesses are reliant on complex supply chains, and fulfilment networks to deliver products and services to customers. These intricate networks are susceptible, however, to disruptions caused by factors ranging from natural disasters to trade disputes, pandemics, and labour shortages.

 

Supply chain disruptions can manifest in various forms, from delayed shipments to complete halts in production. Trade disputes, for example, can lead to increased tariffs, affecting the cost and availability of goods. Natural disasters disrupt logistics and transportation channels, leading to delayed or cancelled shipments.

 

Such events not only affect the immediate supply chain but can also have long-term impacts downstream on customer satisfaction and business reputation.

 

Building a new network

In a world where macroeconomic disruptions are becoming a norm, supply chains have had to be both resilient and adaptable in order to meet the many challenges they have faced along the way; reducing risk, while also taking advantage of new opportunities to keep ahead of the pack.

 

To meet these challenges, there is a growing consensus that the industry has to break out of the structures and constraints of what was considered best practice historically – and implement innovative new technology that drives the change. The supply chains of the 1980s and 1990s, for example, were designed for ever increasing control and efficiency – and focused on the single purpose of delivering a low-cost, ’just-in-time’, reliable service to a known destination, the retail store.

 

The issues and disruptions of the past four years have exposed the risk of just-in-time strategies, prompting a re-evaluation of modes of supply chain execution and a shift towards more resilient, agile approaches.

 

One key area of focus is the role of warehouse and order management technology. As direct-to-consumer (DTC) channels emerge, they offer significant opportunities for businesses to add revenue streams and lessen disruption vulnerabilities.

 

Managed optimally they also introduce a level of resilience and flexibility that the previous modes could only dream of.  Rather than defaulting to the defined source of supply, by considering all potential inventory sources in real time to satisfy a customer, a fulfilment network can potentially boost availability, and automatically identify address pockets of overstock.

 

Warehouse management systems (WMS) are crucial in this new landscape. They provide real-time data on inventory levels, allowing businesses to quickly adapt to changing supply chain dynamics. Advanced WMS tools enhance stock accuracy, optimise storage space and streamline the put-away and retrieval processes; each of which are key aspects during disruptions when efficiency is paramount.

 

Effective WMS also facilitates transparent supplier and customer visibility, thereby managing expectations and maintaining trust during disruptions.

 

In the context of DTC fulfilment networks, Distributed Order Management Systems (DOMS) complement WMS by managing the entire lifecycle of an order from product selection to delivery. They offer a centralised platform to track orders across various channels, crucial for managing backlogs and prioritising orders during disruptions. 

 

An OMS provides real-time updates to customers, maintaining transparency and trust. Additionally, a robust OMS allows businesses to intelligently route orders across their network, to manage peaks in workload, and avoid constraints in supply.

 

Beyond technology: adopting a holistic methodology

While technology is a crucial component, navigating supply chain disruptions requires a holistic approach. This includes rethinking traditional supply chain models, adopting more sustainable practices, and adopting a more end-to-end model of the operation.

 

The shift from just-in-time to more resilient models involves diversifying supply sources, considering alternative inventory strategies, and developing contingency plans for different disruption scenarios. Businesses need to balance efficiency with flexibility, ensuring they can respond to unexpected changes without significant setbacks, at optimal levels of cost.

 

A growing focus on sustainability also plays into this. Customers are demanding that even the most efficient supply chains also need to be sustainable. This means optimising routes to reduce carbon emissions, minimising waste, and embracing eco-friendly practices in packaging and logistics.

 

In order to truly drive costs out, rather than optimising one area at the cost of another, it is critical to consider the end-to-end impact of any given strategy.  Where a supply chain spans organisations, collaboration is a vital component for building resilience.

 

This includes the potential to partner with suppliers, logistics providers and even competitors, to selectively share resources, information, and best practices. Collaborative efforts can lead to more efficient and robust supply chain networks capable of withstanding a wider range of challenges.

 

The future of supply chain management

As we look to the future, the role of technology in supply chain management will only grow. Innovations in AI and machine learning have the potential to transform supply chains further, making them more dynamic, transparent, efficient, and resilient.

 

In an era defined by uncertainty, the ability to navigate supply chain disruptions is a competitive advantage. By leveraging innovative technologies like WMS and OMS, and adopting a holistic approach that includes sustainability and collaboration, businesses can not only withstand disruptions but also emerge stronger and more adaptable.

 

This approach will be essential for businesses looking to thrive in the dynamic, often unpredictable landscape of modern global commerce.

 

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Will Lovatt is General Manager and Vice President at Deposco Europe

 

Main image courtesy of iStockPhoto.com