The nature of managing a business on a global scale is undergoing a fundamental change, driven by the expectations of the consumer. Players like Amazon and Alibaba have completely changed the game and made 24 hours delivery the new norm. Soon, the 48 hours delivery be considered “too slow!”.
There is only a matter of time before this will be the “new normal” in B2B as well, and the question is: are you prepared for that?
The supply chains of the world need to start thinking differently. The slow, siloed-based, sequential planning techniques of the past are no match for today’s fast-paced reality and the warehouse plays a big role in this new competitive environment.
Taken by surprise
The Coronavirus disease (COVID-19) has shown the world, and not to mention global corporations, that supply chains are far too vulnerable when a crisis like this occur. No one has a plan B. This goes for production sites as well, since they are important key points along your supply chain (like warehouses and Distribution centers).
The Coronavirus has shown an insufficient pre-planning for supply chain events, even though the supply chain is one of the most important competitive tools companies have today, especially when producing and selling on a global scale.
That’s why it’s time to rethink supply chain planning and take a different approach to improve warehouse efficiency.
Time for a change in big regional (or global) warehouses?
Many will probably disagree. However, with an increasing pressure on faster deliveries in local markets and with the need of a plan B if unforeseen serious incidents occur, it might be an idea to re-engineer your setup and take a hard look at your future warehousing. Almost any product or service can be bought with just a few clicks on your phone or computer. This means that previously controlled and fixed purchased agreements between buyer and seller can be changed and challenged overnight. When this happens, a totally different supply chain, controlled by the big web portals, will suddenly rule the game.
Where to start?
B2C has already gone completely digital and it is only a matter of time before we will see “B2B e-Commerce and lean warehouse management” take off as well.
Speed and big data control are the most important capabilities in this environment. These need to be fulfilled in order to stay competitive. With the right technology, you can secure that each warehouse concentrates on demand from a broad geographic area, leading to more stable predictions and lower total inventory. The answer here is cloud-based logistics and algorithms. In addition, a different setup of your warehouses has to be set in motion. You will need to store your top selling products closer to your customers.
The beneficial part about cloud- based logistics solutions is that they can keep track of all your shipments and parcels across partners, locations and processes. The result is that you will be ready to deliver - perhaps even within hours - any product that your customers desires. These changes are necessary to create a sustainable supply chain and to increase your competitiveness.
Cross- docking to achieve great results
Using cloud-based data to improve your warehouse performance can lead to a big efficiency increase and a better resource utilisation, such as:
Up to 137% increase in productivity (more than doubling up the speed of transport units through the warehouse at the same time). This can be achieved using the same manpower resources as before implementing.
Up to 50% reduction in hub space due to a changed picking process and trusting the technology to change behavior.
Up to 90% reduction in emergency hiring. Due to the productivity increase, the need for emergency hiring will be almost zero.