4 Keys To Creating A Sustainable Supply Chain Advantage

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Author: Ben Carrick, VP Business Development, South Pacific, DHL Supply Chain

In today’s world of instant communications, viral information transfer, rapid technology changes, the collaborative economy and fluid movement of people between organisations, it is getting increasingly difficult to find, develop and sustain a significant competitive advantage in the market.

One way you ensure your business stands out is by developing a sustainable advantage in the supply chain. A supply chain that is viewed as a “value chain” – where all participants are truly integrated and share a common vision of goals, a commitment to innovation, processes and information sharing – can become a powerful differentiator for your business.

Here are 4 tips on how to create a sustainable supply chain advantage:

  1. Commit to customer-centric discovery and innovation

Efficient systems, short lead times, and strong logistical support all focused towards ensuring a smooth customer experience, should naturally be the focus of modern day supply chains. But a customer-centric approach is not enough – you need to have customer-centric innovation based on collaborative and strategic dialogue. Only through co-defining and co-developing solutions with your customers, will there be true innovation in the supply chain. Open innovation is pivotal to incorporating early feedback from customers and to understanding their challenges. Being closer to customers and their industries is ever-more important as supply chains become more complex, requiring tailored solutions that are industry-or even customer-specific. To achieve this customer-centric approach to innovation, logistics providers require new platforms to exchange ideas and jointly discover innovations that can be proto-typed and tested. Whether via Innovation Centres or regular customer-vendor workshops, the approach needs to focus on driving discussion with customers on future trends and challenges in their specific industries.

  1. View logistics as a competitive weapon

Traditionally logistics costs are approximately 3-5% of revenue, and cost management initiatives have focused on trying to get those costs down year on year. What if a small change to your logistics strategy could increase your sales by 10%?  This would have a much more material impact to the bottom line. Consider how your logistics partner could help improve your reach to new retailers, or to regional areas. They could help capture information from your customers at point of delivery to drive your sales and marketing efforts to increase sales and loyalty. A competitive logistics strategy looks at the whole pie, not just the slice where it categorically sits.

The societal shift from ownership to asset sharing has been one of the most ground-breaking trends in recent years. Everything from cars to driveways can now be shared on platforms. Besides facilitating these new peer-to-peer sharing networks, logistics providers can also share their existing resources to become more cost- and time-efficient. If managed efficiently and innovatively, logistics can provide a strong edge over other players which will also drive customer loyalty.

  1. Embrace new on-demand, last-mile delivery

Last-mile delivery is becoming the new logistics battleground, particularly in the consumer world. As more bulky items move from the traditional retail channel to a consumer direct model, consumers want speed and visibility throughout the lifecycle of the process. Customers also want compressed delivery windows and expanded days of service as they want their online purchases assembled and installed quickly. Delivery is no longer owned by larger players who set limitations on delivery times and locations. New on-demand last-mile delivery concepts utilise the power of the crowd and flexible courier workforces to enable customers to have their purchase delivered when they need it, where they need it. For example, at DHL Supply Chain, we use a customer facing visibility tool called ConnectedView that tracks and monitors the process starting from Customer Order to Warehouse Order through to Transport Order and delivery to provide customers full visibility of the process lifecycle. This ensures that last-mile logistics becomes an achievable reality given the growing demand for omnichannel retailing where transparency is heavily compromised otherwise.

  1. Look ahead at new logistics innovations

The traditional lines between software vendor and 3PL, and between the front-end of e-commerce and the back-end, are all starting to blur and dissolve. The reason is simple: customers are looking for simplicity as a service, which means, they are looking for partners that can help them achieve their desired outcomes in an ever-changing business environment with less time, effort, cost, risk, and resources. As a business, we need to think about adopting the latest technology innovations that help us provide a more satisfying end user experience that maps to the latest business and social trends.

Online shoppers enjoy not just the price advantage of purchasing online, but also 24/7 availability and convenience. With increasing consumer trust in purchasing groceries and pharmaceuticals online, there is high demand for new cold-chain packaging and delivery solutions. Logistics services and technology are moving further upstream towards enabling and facilitating e-commerce to provide the ultimate customer delight. The functional silos that traditionally existed in warehousing, transportation and procurement cease to exist today and supply chain managers today are able to optimise activities across previously siloed functions to create a sustainable supply chain advantage.

In addition to the impact of innovations such as augmented reality solutions, bionic enhancements and low-cost sensors (to name a few), logistics is also currently being transformed through the power of data-driven insights. Unprecedented amounts of data can now be captured from various sources along the supply chain. Capitalizing on the value of big data offers massive potential to optimise capacity utilisation, improve customer experience, reduce risk, and create new business models.

 

The 5th Annual ProcureTECH conference is the only event in the region dedicated purely to those technology solutions that enable greater procurement capability. World class procurement functions are increasingly looking to technology to drive improvement in their capacity to deliver value to their organisations, yet in Australia the uptake of e-procurement solutions has been relatively slow. Keen to learn more?

 

From DHL Logistics Trend Radar 2016

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