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Supply Chains Must Be Ready To Adapt Fast

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Archives, Global Logistics, Global Trade Daily

Supply Chains Must Be Ready To Adapt Fast

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It’s been months since factories in China shut down due to the rapid spread of Covid-19 throughout the country. Global supply chains felt the factory closures first as these manufacturing facilities were often the start of chains that delivered raw and finished goods around the world.

 

Battlefield commanders in the Second World War knew that a lengthy supply chain was a risky supply chain; in peacetime, some 80 years later, the world’s economies know it, too. However, while supply chains have struggled back to their feet, the enormous economic damage to the demand side of the supply/demand equation remains.

High Winds and Heavy Damage

An economic recession comes on gradually and its signs and symptoms can be seen months before in declining consumer spending, reduced hiring, increased layoff notices, rising unemployment, shrinking output and so on. On the other hand, the pandemic blew in like a sudden, violent summer storm, wreaking havoc overnight.

To their credit, CSCOs (Chief Supply Chain Officers) responded as agilely as they could; they saw how the plunge in demand ran neck and neck with the plunge in supply and tried their best to adapt their organizations to seize on new demands being created for products like masks, sanitizers, ventilators and so on. Boston Consulting Group (BCG) refers to these as “rapid response” efforts. In the early days and weeks of the global health crisis, those in the supply chains worked tirelessly to pivot and perhaps even profit from these overnight demands.

Rapid Retrenching Within Supply Chains

Companies were taking other critical steps at the same time, part of their rapid responses; they tried to create as much transparency within supply chains as they could. They assembled lists of the vital components they needed while determining the reliability of supply and, if necessary, finding alternative suppliers in order to keep production running and customer deliveries fulfilled. McKinsey stated in a March 2020 report that several industries (automotive, consumer and mass retail) had two to three months of inventory, at best, unless steps were taken to minimize that risk.

Fortunately, six months along, many governments, corporations, public health officials and the general population know a great deal more about the virus today than in the first few weeks and have implemented coping strategies to mitigate the ongoing crisis. CSCOs are now beginning to think about what the future of their businesses will look like in a post-pandemic world and are facing many questions – some that may remain unanswered for some time.  When will an effective vaccine arrive? When will the current high levels of unemployment in the U.S. and other countries come down?

A recent poll shows that nearly half of American households where a job was lost, believe the loss is permanent, meaning some 14 million jobs could be gone for good.

Boston Consulting Group has laid out five areas in which efficiencies can be realized within a supply chain:

Achieve Complete End-to-End Visibility from Supplier to Customer

Wide open visibility means the CSCO can see cost controls, inventory, quality, lead-time, and service, all in real-time. Such a transparent supply chain can only be achieved through implementing technology solutions designed for supply chain use but Boston Consulting maintains that the value impact is considerable:

-8%–15% service improvement

-10%–15% savings across end-to-end supply chain and cost of quality

-5%–20% working-capital improvement

Reprioritize Capabilities

Taking this step, says BCG, means implementing new, flexible processes that would be essential to managing highly changeable demand and supply. Key to these processes would be refined Sales and Operations planning and “demand sensing”, essentially a way of spotting the first shifts in demand patterns through the use of data analysis and artificial intelligence. Boston Consulting claims companies could see at least a 10% increase in their sales forecast accuracy, something that has desirable ripple effects throughout a supply chain.

Closely Integrate with Suppliers, Vendors and Customers

It makes sense in a supply chain to have as much integration as possible because that ensures that every vendor and supplier can see in real-time whether customer demand is set to tick higher or lower. This type of integration involves sales teams in the front office and S&OP teams in the back office, all with access to analyzed data from an ERP.

Streamline Complexity

BCG has suggestions for the warehousing component in a supply chain: reduce low-volume SKUs and create dedicated lines for specific products while reducing the number of locations where a SKU is placed in order to simplify planning and limit inventory build-up. The payoff? A 10% to 30% savings in manufacturing-conversion cost,  5% to 10% reduction in inventory levels and increased supply chain efficiency.

Develop a Risk Strategy for the Future

There are four elements to this component:

-Rethink contingency supply-chain vision and strategy to address potential risks and enable greater flexibility

-Build more agility into the supply network to meet new business requirements

-Invest in automation to boost speed and flexibility

-Eliminate costs across the end-to-end supply chain to fund innovation and growth

The cost benefits could be substantial:

-5%–15% top-line growth

-15%–20% initial operating cost savings to fund the “journey”

-3%–5% EBITDA improvement.

Take the Technology Express Route

The fastest way – indeed, the only way – to reach the cost savings outlined by Boston Control Group is through implementation of the right technology solutions. These solutions exist today and are designed specifically to meet supply chain challenges. Generix Group North America has a suite of such technologies within their Supply Chain Hub offering which can achieve these goals.

Contact Generix group today and find out how we can boost the value within your supply chain operations.

This article originally appeared on GenerixGroup.com. Republished with permission.

GEODIS
Archives, Departments, Dispatches, Global Trade Daily

Dispatches: GEP and GEODIS Make Big Moves

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GEP wins the prestigious Asia Pacific Procurement Success Awards…

GEP, a Clark, New Jersey-based leading provider of supply chain software and services to Fortune 500 and Global 2000 enterprises worldwide, announced that it has won Asia’s prestigious Procurement Consultancy Project Award at the Asia Pacific Procurement Success Awards 2020, held recently in Shanghai.

“This award is an important acknowledgment of GEP’s ability to integrate consulting, managed services and technology to significantly improve the financial performance of global companies on a sustainable basis throughout Asia,” says Michael Seitz, vice president, GEP Consulting, China. “We are even more excited about the third year of this program, as we apply demand management, the total cost of ownership management, and strategic supplier partnerships to drive additional cost reduction, user satisfaction, and compliance for our client.” 


Meanwhile, GEODIS in Americas links 3PL Services with Amazon and Shopify… 

Geodis is a division of SNCF, which is based in France, but the Geodis in Americas is among the top 3PLs in the United States. The American subsidiary of Geodis recently announced two major marketplace integrations with Shopify and Amazon Drop Shipping. Geodis in Americas is now integrated directly with Shopify to fulfill online orders and ensure seamless data flow between Shopify’s digital storefront and supply chain. Geodis is also now fully integrated with Amazon’s third-party marketplace that enables brands to sell products through Amazon while continuing to utilize Geodis as its logistics partner to fulfill orders and ship directly to the end consumer.  

“As online shopping has accelerated, Geodis is constantly strengthening and evolving our IT solutions to provide the brands we serve with easy, efficient and effective ways to get their products to consumers,” says Pal Narayanan, executive vice president, chief information officer with Geodis in Americas.  

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Archives, Global Logistics, Global Trade Daily, Software

8 Tools and Strategies to Automate Your E-commerce Business & Grow Faster

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The automation of e-commerce businesses has become much easier and more efficient in recent years. More and more online retailers are choosing to automate their activities and workflows and for a good reason. Automation can positively affect multiple areas of your business, including marketing, sales, customer service, order fulfillment, inventory management, accounting, and much more. Let’s see how this works in more detail.

Why Automation is Key for Ecommerce

There are many substantial benefits that different automation software can bring to your online shop. Here are some of the most important effects of a well-executed automation strategy:

-Speeding up all kinds of processes and streamlining workflows in the company.

-Saving time: your marketing, sales, IT, customer service, and operations department will be rescued from performing a number of tiresome, repetitive tasks on a daily basis, which will give them time to focus on strategic and creative aspects of their work.

-By saving time, it cuts your expenses, so it saves you money, too.

-Increasing conversions by improving customer experience and optimizing the sales process.

-Minimizing the potential for all sorts of human errors.

-Collecting, storing, and interpreting loads of customer data and putting them into action. These data can be vital for gaining a slight but crucial edge over your competitors.

All in all, automation can improve the way your company works on many levels. In this article, we’ll deal with some specific areas of your business you should look to automate. We’ll explain how to make the best use of automation tools in these areas and take a brief look at some of the concrete tools you can utilize for this purpose.   

Email Marketing Automation

To this day, email marketing remains the most cost-effective digital marketing strategy. Different automatic emails can generate a lot of revenue if they’re being sent to the right people at the right time.

For instance, the cost of automatic welcome emails is next to nothing, yet these can significantly affect your bottom line. On average, welcome emails bring five times more sales than regular bulk emails.

Of course, welcome emails aren’t really enough. You’ll have to be more specific and carefully set triggers that will prompt the software to send different follow-up emails. Take cart abandonment, for example – as much as 70% of all online carts end up abandoned for various reasons. And it turns out that a brief reminder about the abandoned cart can be that little nudge in the right direction that a shopper needed. If you automatically send them emails as soon as they give up on purchasing a product, these will generate 36 times more sales than ordinary bulk mails – especially if you offer discounts or other incentives.

In general, emails can open up a whole world of upselling and cross-selling opportunities with consumers that have already shown interest in some products. Sending follow-up messages with related products can boost your sales substantially. Here it’s important to send the right offers to the right people, which basically comes down to accurate customer data and smart segmentation. You need to set the parameters and triggers right, and the automation software will do the rest.

A great tool to consider for this purpose is Klaviyo. It offers fast integrations with a huge number of e-commerce platforms, which will save you tons of time, as everything can be controlled from a single dashboard. Klaviyo also provides great segmentation and personalization features, including dynamic data blocks that will ensure that different sections of an email are shown to different carefully targeted groups. More than 30 thousand users who choose Klaviyo may be a good indication that it’s a very useful tool to automate your email marketing efforts.  

Inventory Management Automation

Not having the right amount of control over your inventory can hurt your business in many ways. In an era where UX and CX are only getting more important, making a customer wait for an additional week or two because you don’t have the product in stock is anything short of a disaster. To put it in numbers, 24% of all shoppers reported having canceled their order because of slow delivery, while 38% of them said they’d never buy from a retailer again after a negative delivery experience.

Updating info about your inventory manually may be possible for some very small businesses. But in e-commerce, every business can become an overnight success, and every business needs to be scalable. Manual updates are not a scalable solution.

That’s why some sort of inventory management automation software is becoming a must for most companies. The right automation tools will ensure you continuously have a detailed real-time overview of your stock. This approach is much more efficient than periodical updating, as selling online is an unpredictable endeavor, and you don’t want to leave anything to chance. The software can monitor your inventory and automatically order products you need more of, unpublish out-of-stock products and even pause advertising for these products until you replenish your supply.

A great inventory management tool you can use is InFlow. It can help you organize your products with the help of lists, categories, photos, and serial numbers. It helps you stay on top of your costs, it helps you track your stock, and it can also take a lot of the stress out of reordering items. You can easily monitor everything from a handy dashboard. 

This is just the tip of the iceberg when it comes to the tool’s features. Best of all, InFlow integrates with plenty of the most popular e-commerce platforms (Shopify and Amazon included), as well as Zapier and QuickBooks, so you’ll have no trouble making the absolute most of it. 

Workflow Automation 

A lot of the work we do is done haphazardly and without that element of forethought that can make it productive, effective, and efficient. As humans, we’re certainly not always capable of giving 100% (and neither should we be). But sometimes, all it takes is a tool to help us make the most of the time and resources we have at our disposal.

With a clever workflow automation tool, you can build a smart workplace that will enable your team to communicate better and stay on top of all of their tasks. A smart workplace will ensure team members can tell at a glance who is doing what at any given time, what the priorities are, and when there is time to relax a bit. 

It will also offer plenty of flexibility: you can still choose to tackle tasks in any order, but you do have a reliable and up-to-date set of data to base your decisions on.

A good example of such a tool is Asana. While there are certainly more trending workflow management tools out there, Asana has been around for quite some time and it has perfected its solution. Asana allows you to design your own processes and create boards that help you stay on top of tasks. You can manage projects and teams with it, and there is a calendar you can use integrated with the tool. Plus, it works for any team: marketing, sales, IT, and so on.

Smart Calendar Tool

Smart calendars can be used for much more than just reminding us of birthdays and dentist appointments. A truly advanced calendar app can help you organize your team, arrange meetings, increase your productivity, and eliminate noise in communication.

This kind of scheduling tool is useful for any business, not just online-based ones. When designed well, they can save you a lot of time and instantly provide you with info relevant for your meeting or appointment. These can include a social media profile of a person you’re meeting or the weather forecast for the day and place you’ve set.

It’s best to show the benefits of such a tool as an example. Take Woven, for instance. Apart from standard functionalities you would expect from any calendar app, it offers conveniences such as smart templates for different meeting types, group polls, and availability sharing that speeds up the process of arranging a meeting immensely. Instead of losing time on endless group chats, everyone involved can simply mark their free and busy hours with just a few taps. This sort of tool can relieve you of a lot of frustration and time-wasting.

Live Chat Tool 

The introduction of modern technology into the field of customer service has resulted in consumers asking more from brands in this respect. Instant responses and constant availability are big priorities for shoppers. As much as 90% of consumers have labeled an immediate response to their customer support issue as “important” or “very important.”  

Users also expect you to be available via all possible channels. If they have a question about a product on your website that they’d like to buy, they may not be in the mood to search for your brand on social media in order to DM you. Additional few clicks or taps can make all the difference in the world here. That’s why you should think about a live chat automation feature on your website.

Now, very few chatbots today can engage in a truly complex conversation and solve complicated issues, as they still have trouble with properly processing natural language. Still, they can be very useful for answering basic questions and routing the right customer service rep into the conversation once things get too tricky for them. This tactic reduces costs, employs a “worker” that will be available around the clock, increases the average order value, and can boost your conversions by up to 20%.

Drift is the world’s leading conversational marketing platform with some very useful advanced live chat features. For instance, you have multiple inboxes at your disposal to manage different types of conversations, and you can save replies to common questions.  A great thing about Drift is that you can see who’s browsing your website even before they choose to engage in a conversation and you can easily import all leads from Drift into your marketing automation platform. Finally, detailed chat analytics will help you learn whether you’re doing things right and make improvements accordingly.

Repricing Automation Software

If you’re selling on Amazon, then you understand the importance of continually updating your prices. Readjusting your prices based on the prices your rivals offer makes you more competitive and gives you a better chance of obtaining a Buy Box, which can substantially increase your sales.

In short, only the top sellers can win a share of the BuyBox, and the Amazon algorithm decides who the top sellers are based on several factors. Among other things, top sellers are supposed to provide reliable and fast shipping, quick responses to customers, stable inventory levels, and low order defect rate. Finally, one of the most important factors is the price.

That’s why you need to be up-to-date with price trends among your competitors and update your prices on a regular basis. It can get very difficult, if not impossible, to constantly check on your competitors’ prices and manually modify yours whenever needed. If you fail to adapt to prices offered by other sellers, you can get pushed out of the BuyBox almost instantly.

Here, repricing automation software can solve your problems. Aura can be a great tool of choice in this case. It will follow other designated retailers, register any changes in price, and react based on the values that you set previously. For instance, you can aim to be the FBA seller with the lowest price or simply target the current BuyBox price. Aura offers many different strategies and strategy templates and lets you easily define your competitors. It updates your prices just a minute or two after a relevant change happens and thus helps you maximize your time in the BuyBox.

Order Fulfillment Automation 

Simply put, order fulfillment is the process that starts when the customer clicks the “order” button and finishes when the ordered product is at their door. It incorporates many different activities, like order processing, sending the confirmation email, printing labels, packing, shipping, and even managing returns. To fulfill the order successfully, businesses also have to handle some issues prior to the actual order, such as receiving inventory shipments or storing and managing the inventory.

Obviously, this whole process has a lot of moving parts, many parties are involved, and managing everything manually can be a nightmare. Automating these procedures can save a lot of time and money, and serve as a safeguard against human error.

It’s vital that all these processes are integrated and that they can all be controlled by a single tool. If you use one app to process the order, a second one to find a carrier, a third one to print labels, and a fourth one to handle returns, it can still get very confusing. That’s why you will want a good tool that enables you to monitor your inventory and optimize your stock.

Automating Personal Life

Finally, let’s try to conclude this article on a different note. Automation tools can help your business a whole lot, but it’s important to remember that they’re not almighty and that, at the end of the day, you’re the one controlling them. That’s why you should try a bit of automation in your daily life and introduce stable, healthy habits.

Different software can indeed help substantially boost your productivity, but it all starts with you. 

Productivity comes from the stability of your body and mind, and your big-picture business decisions can’t be automated. The technology is there to help and you’re there to lead. It’s important to remember that and not overestimate the power of automation. Especially in the times when we need to think about our mental and physical health more than ever.

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Archives, Global Logistics, Global Trade Daily

6 Important KPIs to Monitor in a Shared Supply Management Context

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Making the right product available at the right time is a challenge industrial companies are faced with daily. To optimize their Supply Management, many are choosing Vendor Management Inventory, a system based on collaboration between client and vendor. To ensure your VMI project is successful, however, some KPIs must be monitored attentively. Generix Group has compiled everything you need to know on the subject in an infographic.

The challenges of Shared Supply Management

Implementing a VMI lets customers and vendors collectively manage their product workflows. Using this collaborative model, they can optimize Supply Management by geolocating stocks and measuring their levels according to real-time consumption data provided by sales locations. This leads to improved customer service, reduced overstocking, better cost management, and increased sales.

The Shared Supply Management process has proven itself to be an undeniable advantage, particularly when dealing with FMCG players. Powerful collaborative solutions have also proven to be a growth driver and can set a company apart from the competition.

To learn more about this topic: [Product Sheet] The Benefits of Shared Supply Management 

Six key VMI KPIs

Generix Group experts have defined six important KPIs to measure, from consumption predictions to stockout rates.

Whether you’re looking to improve needs evaluation to take advantage of forecasting trends and turnover rates, or directing future actions to limit surcharges, VMIs offer a wide array of key information and advantages, as shown in the infographic below.

Implementing a VMI offers a number of competitive advantages, provided that users know how to take full advantage of their solution. To do so, they must carefully monitor the right indicators. Generix Group has compiled a list in the six-point infographic below. Are you new to the collaborative adventure? Or perhaps you are looking for a way to guard against the risk of error. Generix Group is here to help!

This article originally appeared on GenerixGroup.com. Republished with permission.

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3pls, Archives, Global Logistics, Global Trade Daily, Warehousing

The Shared Supply Management Glossary

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To enable manufacturers and distributors to reduce their inventories while still meeting consumer expectations, supply management today has become increasingly collaborative. From shared management of supplies to deported or consigned stocks, cross-docking, multipick or multidrop; organizational methods and models are multiplying to improve the efficiency of the Supply Chain and meet the needs of manufacturers and distributors. Generix Group is revisiting the primary mobilizable techniques and their benefits.

4PL

Managing all the players involved throughout the Supply Chain represents a real challenge for some companies. Therefore, they prefer to entrust this coordination mission to a 4PL (or “fourth-party logistics”) provider. In addition to the storage, order preparation and transport operations usually carried out by a 3PL, the 4PL also assumes the responsibility of independently managing supplies for its customer.

Category Management

Another component of an ECR approach, Category Management is a distribution strategy consisting of optimizing sales by categories, rather than by product families, from a customer satisfaction perspective. Thanks to SSM, Category Management can improve efficiency: product organizations work together more closely, customer knowledge is refined, and dashboards are more easily shared. In fact, market placement and product assortments can be executed more precisely. Since the manufacturer has an in-depth knowledge of its products and their potential, it decides which quantities to put on the market. The distributor, therefore, benefits from better management of its product assortment, and the manufacturer can direct its production lines accordingly.

Collaborative Planning Forecasting and Replenishment (CPFR)

Based on SSM, this collaborative practice pushes cooperation further upstream by integrating planning and forecasting. The aim is to improve the Supply Chain through increased collaboration between manufacturers, distributors, and logistics providers. Under this approach, sales and production forecasts are developed jointly, promotions are managed in a more participative manner, and there is a greater dialogue surrounding new products’ marketing.

Consigned Stock

On a principle similar to that of deported stocks, this time the consigned stock is stored by the logistics provider. These stocks remain the property of the supplier for as long as they remain at the provider’s location. Once the goods leave the warehouses, they become the responsibility of the distributor, who must then pay for them. Very often adopted by small manufacturers with low storage capacity, this solution also allows distributors to reduce the immobilization of their capital.

Consolidation and Collaboration Center (3C)

Often initiated by distributors, this solution allows small and medium-sized enterprises (SMEs) without large logistical means to meet the challenging demands of their customers by organizing fast and frequent deliveries, shipment of packages and not whole pallets, and optimizing the filling of trucks without increasing logistical costs. Therefore, 3Cs are generally aimed at suppliers who cannot access pooling, multidrop or cross-docking.

Cross-docking

In this tight-flow supply management process, goods are delivered to a grouping/unbundling warehouse and shipped directly to the final point of sale, without intermediate storage. The aim is to allow the distributor to reduce its inventory by increasing the frequency of delivery to points of sale, but also to improve the filling rate of trucks by shipping potentially heterogeneous products.

Deported Stock

Deported stocks are stocks established at the customer’s site, but that remain the property of the supplier. Through this consignment technique, the distributor can increase its inventory levels and improve its working capital requirements (WCR). The supplier gains visibility through the dispersal of its products and can adjust its production accordingly. For the manufacturer, it also assures better in-store availability of its products, and indirectly, a guarantee of satisfaction for the final customer. The practice of deported stock is similar to that of 3C (Center for Consolidation and Collaboration).

Multidrop

In this supply management model, resources are pooled between several manufacturers with customers in common. Like cross-docking, multidrop aims to optimize truck filling and increase delivery frequencies. However, to be beneficial, this mode of operation requires a geographical approximation of the delivery points, whether they belong to the same brand or not.

Multipick

In this variant of pooling, goods addressed to the same delivery point are collected in different industrial warehouses. To be effective, warehouses must be located within 30 minutes of one another. Multipick, however, remains a complex process to coordinate without a mediator. It requires a good understanding of the different players in order to organize the loads in a coordinated and functional way.

Pooling

Complementary to the SSM, pooling is another model of collaboration, this time established between several manufacturers. Also known as Mutual Supply Management, this way of organizing allows manufacturers to pool their resources. The goals are to reduce logistics costs, increase delivery frequencies and make supply flows more reliable, all to ensure better availability of products in stores while maintaining a lower carbon footprint.

Retailer Managed Inventory (RMI)

In this organizational model, supplies are managed directly by the distributor in the form of firm orders to the supplier. By transmitting information about its inventory movements, the distributor allows the manufacturer to anticipate its production needs and optimize its inventory management.

Shared Supply Management

Considered a tool of the Efficient Consumer Response (ECR), SSM is a method of supply management whose responsibility is shared between the manufacturer and the distributor. In this collaborative organization model, the supplier is tasked by the distributor to supply the products as closely as possible to the needs. The inventory and/or sales data provided by the distributor allow it to adapt its production and logistics resources, and to calculate the quantities of products to be supplied according to those needs.

Vendor Managed Inventory (VMI)

Derived from the SSM, VMI relies on the provider supplying the optimal inventory to the distributor, without prior approval. Since the order has to be accepted and shipped by the distributor, VMI requires a great deal of trust in the customer/supplier relationship. Primarily practiced in the United States, this method is becoming more widespread in France via the impetus of a few distributors.

Working Capital Requirement

A key indicator of business performance, the working capital requirement is directly impacted by inventory levels that generate delays in cash flow. But with SSM and pooling, it is possible to have a better overall view of supplies, and thus to better control this cash flow. The level of WCR then becomes an indicator allowing the company to know if it deviates from its objectives, but also to measure the logistical and financial consequences of doing so. With projections of 3 months or 6 months, it becomes possible to anticipate the costs associated with the intervention of a logistics provider in case of shortages and seek to reduce these penalties.

You now know (almost) everything about the many organizational models that can meet your supply management logistics needs. To improve the performance of your operations through collaborative management, check out the Collaborative Replenishmentoffer built into the Generix Group Supply Chain Hub platform, or contact us!

This article originally appeared on GenerixGroup.com. Republished with permission.