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What is the smart way to manage increasing supply chain costs?
Covid, Brexit and the war in Ukraine have brought about a perfect storm for supply chains. Covid has led to seismic changes in shopping behaviour, accelerating online sales by the equivalent of five years. Brexit has added friction into trading with Northern Ireland and mainland Europe and reduced the availability of labour to work in logistics.
The Ukrainian conflict is also causing supply chain disruption leading to record price hikes and causing raw material shortages due to an overreliance on natural gas and crude oil from Russia, as well as dependence on both Russia and Ukraine for key agricultural commodities.
Even prior to the conflict, most companies were managing their way through complex logistics challenges such as port congestion, container shortages, long lead times, and record-high ocean freight rates.
With supply chain costs on an upward trajectory with no end in sight, companies are looking at a variety of ways to handle these rises without passing them on to customers.
John Hayward shares his views on different strategies and smart approaches companies can take to managing these increases. Embracing technology and automation, and building flexibility into supply chains, will be instrumental to the survival and success of businesses going forward.
Smart technology
Utilising smart technology to leverage previously untapped operational efficiencies. For example, we are developing a solution that will significantly reduce the time to pick e-commerce orders in fulfillment centres that in trials have shown substantial reductions in pick walk time of up to 45%.
Automation
By utilising automation to face the twin challenges of increasing costs and reducing availability of labour, companies can make savings. The increasing accessibility of modern, flexible, and modular automation applications can quickly realise an ROI when deployed in an appropriate environment. Read more about automation here
Demand planning
Demand planning and forecasting using the optimum combination of people, process, and systems to better understand the sales and operation planning cycle and therefore reducing inventory, improving cash flow, and increasing availability. Read more about how we can support you with demand planning here
Visibility
By using joined up systems and data to improve visibility across an increasingly complex supply chain, businesses can improve decision making and agility when responding to consumer demands and macro events, e.g., demand for certain goods during the pandemic.
Sustainability focus
Those companies ahead of the curve when it comes to a sustainable supply chain will also benefit from a reduced reliance on commodities that are only going to go up in cost, e.g., Amazon investing in electric goods vehicles.
Ideas & Insights
Sharing Our Expertise
Our guides, ideas and views. Explore our insights to deliver tangible improvements to your supply chain and logistics operations.