Part 1

Strategies to Improve Supply Chain Resilience

In an earlier article, we identified some key challenges in warehouse operations and discussed 10 key strategies to improve Supply Chain resilience.

We’ve drilled down further into the first 5 of these strategies:

1. Consider moving from a ‘Just in Time’ strategy to a ‘Just in Case’ Strategy

For many years supply chain managers were focused (and rewarded) for taking costs and inventory out of their supply changes. This ‘Just in Time’ strategy worked when supply chains ran smoothly, however with the ongoing storm of supply chain disruptions this strategy is failing and a new mantra is needed.

Building up stock levels and increasing weeks of supply is now seen as a key strategy in mitigating supply chain disruptions. However, this ‘Just in Case’ strategy comes at a cost, higher inventory levels, and demands for more Warehouse space are driving up costs.

To mitigate these increases companies should focus on increasing stock levels on some key products, not all products. Focus on (i) ‘must have’ products or (ii) products with long reordering periods or (iii) products with a high probability of disruption.

To effectivity achieve this you need to move aware from Excel\old\end of life, Sales and Operational Planning (S&OP) solutions to dedicated applications that can automate the heavy lifting needed to manage a range of product-level strategies.

2. Invest in technologies that reduce operational dependence on the labour workforce. i.e. Robotics, Goods to Person, ASRS etc.

Any solution that reduces your reliance on Labour should be considered, typically this means investing in technology to automate many supply chain warehouse tasks.

The challenge in this area is to understand which technology options work best for your operations, what the return on investment (ROI) will be, both in the short and long term and when and how to implement them. Also, consider investing in Labour optimisation solutions to ensure your workforce is fully utilised across every hour of the day.

3. Improve the maturity of your systems, data, processes, and people to deliver more flexibility, resilience and reliability across your day-to-day operations.

The more mature your operations the better prepared you will be for any disruptions.

Ensuring your stock accuracy is > 99.6% and your master data (dimensions, weights, Units of measure) are always 100% will ensure minimal disruption to day-to-day operations.

4. Invest in solutions that improve real-time visibility of freight movements. The sooner you know about an issue the sooner it can be resolved, mitigating its impact.

Real-time (or near real-time) reporting of issues and exceptions is a key capability of mature Warehouse operations. Operational Dashboards provide an up-to-the-minute view across all statuses, key tasks, activities and constraints relating to stock movements. Correctly configured system alerts will help drive and improve operational responsiveness, and transportation visibility solutions will help manage customer expectations.

5. Consider investing in Order Management Solutions that can ration or substitute products that are late or out of stock.

Being able to pick any product from any warehouse (or store) based on the order management rules of the day provides true supply chain resilience. Having systems to support substitution rules will also improve order fulfilment rates. The ability to ration product demand to supply is a key capability companies should also consider.

If you’d like to know more about these ideas and strategies, then reach out to FourPL for a follow-up discussion.

Contact our team today for more information:

Email: Peter Robilliard, Senior Advisor – Logistics

Email: Rafael Acosta, ANZ Service Line Leader