The Evolving Supply Chain: Transformation Meets Technology
Ron Lazo, vice president of Professional Services at Manhattan Associates, joins Adrian Gonzalez from Indago Research Cast to discuss the impact of COVID-19 on the supply chain. In this video, Adrian shares insights from survey research findings conducted amongst supply chain leaders throughout 2020.
Watch the video in its entirety, or fast forward to watch the sections (timestamped) below.
COVID-19: Catalyst for Change (1:30)
The coronavirus pandemic, and the upheaval it created, put supply chains in the spotlight, exposing both strengths and weaknesses. In assessing a new normal, most companies said that change was likely. In fact, 41 percent of respondents said they expected to make many/extreme changes, and another 22 percent expected moderate changes.
Top Supply Chain Capabilities Moving Forward (3:30)
The dramatic shifts in supply and demand were obvious both to businesses and consumers. Therefore, it’s not surprising that the top two supply chain priorities survey respondents listed were the ability to analyze real-time demand, and real-time visibility of inventory across the supply chain down to the SKU level.
Network Visibility: Significance and Value Drivers (5:30)
Delving deeper into capabilities, Ron Lazo said essentially every project in which he participated involved some aspect of visibility. In the area of TMS “must have” capabilities from customers this year, a highlight was visibility beyond “where’s my truck” to include all nodes, all channels and all trading partners. That means information down to a granular level of a single order or item and the ability to modify a route or deliver to meet service levels and maintain satisfaction.
Unlearning the Status Quo (12:45)
The explosion of ecommerce was already driving change in the ways supply chains operate. Shipping “eaches” instead of pallets, smaller orders and faster delivery expectations were forcing an examination of how things had always been done. COVID-19 acted to accelerate those trends. Indago asked survey participants what traditional supply chain practices or concepts needed to change. The top two answers were unlearning the “I win, you lose” approach to supply relationships, and viewing logistics as more than just a cost center.
Speed of Fulfillment (19:54)
Ron talked about how the demands of the past year have put speed of fulfillment at the top of the list in terms of technology. On the consumer side, he gave a grocer example where an order management system would have SKU substitution logic so that if brand name toilet paper or sanitizer were sold out, the system could substitute another brand and still meet the customer’s needs. On the operational side, he mentioned moving away from a distribution center-only model to one where deliveries can be made directly to stores to speed up the flow of products to where they are needed.
Perception of Logistics Value (23:45)
Ron and Adrian discussed the changing perception of logistics. Whereas 10-20 years ago it was viewed as a cost center, now it has become an essential, core competency of virtually every business. As the past year has shown, getting the right product to the right place via the right channel at the right price has never been more important. That has led to more collaboration and sharing of data between shippers and carriers, and between retailers and suppliers.
Key Takeaways (30:19)
Both Adrian and Ron believe that ecommerce will continue to have a greater and greater effect on supply chains. Investments should be made in technology that enables efficient, flexible and fast fulfillment. Whether it’s store to customer, shipper to DC, DC to customer or anything in between, technologies that deliver great experiences are the ones that will remain critical in 2021 and beyond.