Just like tides change and weather patterns shift, the supply chain management space is in flux. For years, the main focus in the space was on cutting costs, but that is no longer the case. Supply chain management is becoming more complex as increasing overall resilience and implementing sustainability practices amid a shortage of skilled workers takes top priority. As we prepare for 2024, we must look beyond the trends and determine practical steps we can take to future-proof your supply chain.According to the Association for Supply Chain Management (ASCM), the top 2024 supply chain trends are:
It’s no surprise that Digital Supply Chain is listed first, it’s viewed as the foundation needed for streamlining a variety of supply chain activities. Implementing a digital-first strategy enables companies to respond quickly to incoming requests.
While all these trends warrant attention, our three strategies to future-proof your supply chain mainly fall into investing in supply chain systems and people. At CornerstoneEdge, we believe companies large and small will have to continue to embrace automation and technology to improve productivity and remain competitive. We also feel strengthening supplier relationships and investing in visibility tools will be critical steps to take. Let’s dig in.
Strategy 1: Embrace Automation and Technology
Automating key supply chain processes, such as order fulfillment, warehouse management, and data analysis improves accuracy, reduces errors, and saves you time in the long run. At this point, it’s common knowledge that manual processes are prone to human error, like data entry mistakes, miscalculations, and even discrepancies between physical stock and recorded inventory levels. By automating inventory management, operations can eliminate stockouts, overstocking, and inefficiencies in the supply chain.
A Warehouse Management System (WMS) is an excellent first step in automating warehouse processes, but nowadays there’s a lot more that can be done to supplement your offering and improve efficiencies. For example, Artificial Intelligence (AI) can be used to handle simple tasks like order processing, billing, and sometimes even customer communication. Robotics in the warehouse, like Automated Guided Vehicles (AGVs) can transport materials, supplies, and inventory throughout the warehouse, enabling warehouse workers to focus on more skilled labor.
Warehouse blockchain records and verifies every action within your supply chain. With granular data on your shipments, inventory, and transactions, it enables you to forecast more accurately and plan for the future.
The important thing to know about automation, any technology really, is that it is not a one-size-fits-all approach. That’s why it’s important to perform a supply chain evaluation to see what your operation will benefit the most from.
Strategy 2: Build a Network of Reliable Suppliers
The pandemic taught us a lot of things, and one of the biggest lessons was the importance of diversifying your supplier base to mitigate risk and ensure supply continuity. You’ll want to start by identifying quality suppliers. A few rules to stick by to help in this process are:
- Check certifications to ensure they meet your minimum requirements.
- Align manufacturing and shipping locations to your operation’s needs.
- Partner with suppliers who have experience in your industry.
- Determine whether the supplier has enough capacity to meet your needs.
- Investigate the supplier’s financial health, as that will have an impact on how well they can weather future ups and downs.
You may want to consider location diversification, supplier performance monitoring, and collaborative partnerships. Diligence is not only needed when finding the right supplier but in maintaining the relationships too. There are a few steps you can take to strengthen supplier relationships:
- Address any concerns as they arise, honest discussions from the get-go will build a foundation of trust from the start.
- Communicate often, clearly, and consistently.
- Be open to receiving and providing honest feedback so that you foster an environment of continuous improvement.
- Be clear about contractual obligations.
- Work together to identify potential issues down the line so you can collaborate to address them proactively.
A strong supplier relationship is essential, but remember to diversify as well. It may be in your best interest to have a few suppliers in your back pocket, or to work with multiple suppliers so that if one cannot fill an order another may be able to cover.
Strategy 3: Invest in Supply Chain Visibility and Transparency
The simplest way to future-proof your supply chain is to have visibility into your operations. Real-time insights into your supply chain operations help you identify potential disruptions and proactively manage them. There are countless technologies out there to help with visibility, including:
- RFID tags allow operations to track and trace items throughout their retail journey giving operations the most complete view possible of their inventory.
- IoT technologies including sensors, barcodes, QR codes, and other tracking methods can send information to a software platform (like a WMS) and offer complete visibility into items as they move along the supply chain.
- Ended-to-end data platforms and their ongoing data capture capabilities can provide robust visibility into supply chains. Data collected can be used to inform risk planning, which helps improve predictive accuracy and resilience to disruptions.
When one of our retail customers was struggling with inbound labor, CornerstoneEdge suggested they implement a Transportation Management System (TMS) with Advanced Ship Notice (ASN) functionality. Within just a few months, the company experienced a 50% improvement in its labor throughput due to improved visibility and inbound container management. Visibility works, so finding the right visibility tool for your operation is critical.
Hit the ground running in 2024
While there are countless strategies you can implement in the new year to future-proof your supply chain, we believe a focus on automation, supplier relationships, and visibility are excellent starting points. Implementing these strategies will help you build a more resilient and agile supply chain for 2024 and beyond. If you’re not sure where to start, that’s what we’re here for. Whether you’re looking for help with facility layout and design, 3PL selection, or a WMS implementation, we can help. Give us a call, and let’s see how we can make your supply chain your differentiator