Prioritising agility will support supply chains in 2023

Will Lovatt, General Manager and Vice President at Deposco Europe explains how agile supply chains can support sustainability all year round

The main theme for the supply chain in 2023 is that the unexpected has become the expected, according to Will Lovatt, General Manager and Vice President at Deposco Europe. 

“The landscape has changed out of all recognition over the past three, or four years,” he says. “Historically, most supply chains focused on diligent planning. They knew that if they planned to a level of depth and sophistication, then execution was simply a predictable outcome of that high-quality planning.”

Today, that’s all changed. First, with new channels like Direct-to-Consumer having a significant impact, the shape of the supply chain has radically altered. It is no longer a chain. Instead, it has become a network, equipped with a widely-dispersed mesh of nodes (manufacturers, warehouses, stores, fulfilment centres, etc.) which must take on new roles and new capabilities to deliver omnichannel fulfilment at any time, from anywhere. 

“At the same time, the frequency and variety of impacts on supply - from the Russia-Ukraine War to extreme global weather and inflationary pressure - is, if anything, increasing,” says Lovatt. “All this volatility and uncertainty would, in itself, make relying on a rigid plan to deliver a predictable outcome all but untenable: But when you factor in the need to keep up with fast-moving trends like sustainability, it becomes impossible.”

 

Navigating the need for sustainability in the supply chain

Over the next year, Lovatt expects that brands will make tentative steps towards addressing the consumer demand for consolidated deliveries. 

“The absolute focus on faster, near immediate delivery is giving way to consumer selected time and place of delivery, or collection. More consumers are demanding options for combining their day to day purchases into a single drop,” he says. “They also seek control over the mode of delivery, to perhaps combine a pick up with a visit to a local retail or entertainment location.”

Lovatt also expects to see the push towards nearshoring and reshoring the supply chain gathering pace during 2023, with businesses eschewing lower-cost-but-unresponsive long lead time sources, in favour of local suppliers with capability to respond to rapid changes in consumer demand.  “Legislative change continues to encourage more localised sources, with international trade sentiment not at an all time high,” said Lovatt. “All of this will require businesses to be flexible and agile to move quickly to adapt their approach to fast-changing circumstances.”

Will Lovatt, General Manager and Vice President at Deposco Europe

Will Lovatt, General Manager and Vice President at Deposco Europe

Taking action for a sustainable supply chain

Whatever the precise challenge a business is dealing with in 2023, supply chain businesses have, as always, a need to be ready to deliver the best of what’s available, in the volumes required, to satisfy demand through whatever channel and in whatever location it emerges. 

“Given the range and variety of trends and disruptions outlined above and the importance of addressing them rapidly, more organisations will realise that when it comes to order fulfilment, the answer is all about agile and, where possible, real-time execution,” he continues. “They need to prioritise nimbleness - and that means having the flexibility to deal with a wider variety of possible scenarios, together with rapidly-changing priorities.”

But how can they best achieve this? Certainly they can no longer retain the mindset that the plan will guide their day-to-day execution. Businesses need to understand that the plan is only as good as the assumptions it was built on, so they need to understand and address in real-time whatever reality emerges.    

“Whatever scenario develops, they need to be able to satisfy customer demand in a precise, accurate, real-time and affordable way. What that means from a technology landscape perspective is the solution needs to be web-based. Any attempt to try to couple together legacy batch solutions is likely to end in failure. Those were fit for purpose for the traditional bulk movement of product from manufacturing to a single well-defined destination - retail. The challenge today is very different in terms of shape and scale.”

Organisations therefore must ensure that they don’t constrain the solution they choose based on the architecture and design of previous generation systems. That does not mean that they need to rip and replace architectures though. By leveraging a set of appropriate web technologies blended with the traditional systems of record, organisations can support the supply chain agility they need by bringing in new capability and functionality quickly and easily when required.

“Such an approach will help them to achieve that single-pane-of-glass view of inventory across the landscape - from traditional warehouse to retail store to fulfilment centre - to actively calculate and optimise where to best source stock from in order to fulfil the specific requirements of each individual customer.”

In parallel, it will allow them to match demand with viable sources of stock in real time and consider the most sustainable delivery option all in one environment. By deploying Distributed Order Management (DOM) they can deliver through multiple channels-to-market to engage and retain customers.

“In summary, the continued disruptions in supply availability, and the fast-evolving demands of the consumer mean that fulfilment networks are facing dramatic challenges which cannot be addressed using the legacy tools they previously operated on,” says Lovatt. “Where the plan was once king, and adjustments were occasional and performed by committee, tomorrow’s successful consumer focused supply chain is a very much more dynamic and execution focused, real-time operation.”

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