By Jonathan Hatchuel, Enterprise Sales Director, Oracle Australia
Over the past decade, Australia’s population has increased by almost 18 percent. Most of this growth is occurring in urban areas. In fact, by 2017 Australia’s capital cities accounted for more than two-thirds of the country’s total population.
This rapid growth is exerting a massive amount of pressure on the infrastructure and supply chains that serve our cities.
The management of these supply chains has become incredibly complex and is set against a backdrop of rising customer expectations for faster delivery times.
It’s also big business – the logistics value chain is pegged to be worth $187 billion in Australia by 2021.
The growth of e-commerce is expected to grow the demand for warehousing and distribution even further
The good news is that by embracing smarter technologies, logistics businesses can improve efficiency across their supply chains, providing a boost to their bottom lines and the overall economy.
Digitalise to improve fluidity
We’ve seen technology grow and transform many industries and supply chain is no different. Legacy supply chain management systems are linear and siloed, which doesn’t adequately allow for fluidity of demand. By contrast, modern digitally connected supply chains are agile enough to change at any point of the process.
Digital technology can help solve inefficiencies and other underlying issues in the logistics sector. In the past, legacy systems relied on third-party providers to support specific channels. This caused gaps in visibility and challenges to service consistency. Digitalisation is a game changer – it standardises procedures, enhances end-to-end visibility and empowers logistics partners to seamlessly facilitate shipments across the country and globally.
Recognising the complexity and importance of the local logistics industry, governments are also embracing digitalisation.
To help deal with the expected surge in demand for distribution services the Australian Government has committed to funding a National Freight Data Hub, which will track country-wide freight use and identify choke-points and congestion. By harnessing cutting-edge technology, it will monitor freight use of the national transport system, ensuring a central, neutral, collection-point for data.
Streamlining supply chain in the cloud
Cloud-based Software as a Service (SAAS) applications like Oracle SCM Cloud, can provide real-time delivery tracking. This means any organisation inside the supply chain eco-system – from parcel couriers to food delivery platforms – can take back control of the data collected to identify frontline issues, manage inventory and inform original suppliers about downstream issues.
One business which is successfully embracing this model is wine retailer Vinomofo. With the help of its Oracle warehouse management system (WMS) it has been able to use data from this cloud-based technology, to inform data-driven decisions. With customers expecting the best from retailers, Vinomofo knew it had to make sure it got logistics right, and accurate warehouse management was a key part of this. With the ability to be absolutely certain about the accuracy and visibility of data such as stock levels, Vinomofo is able to confidently use this information to make the right decisions real-time.
Another example of leveraging cloud to improve supply chain processes, is Australian vitamins and health supplements company Blackmores. The company is about three-quarters of the way through its roll out of Oracle ERP Cloud across its Asian markets. This is part of a move to bring in-country finance services onto a common enterprise platform. Previously, tasks like demand planning and product development were generally done in spreadsheets or as a manual process. This made forecasting sales and product demand a challenge. However, rolling out a unified cloud ERP platform has improved transparency and helped to deliver products to local markets far more efficiently. This will help enable the company to scale its Asian businesses significantly over the next five to 10 years.
Cloud solutions like the one adopted by Blackmores are pivotal to adopting emerging technologies like Artificial Intelligence (AI), Machine Learning and robotics. Together these technologies are fuelling tighter, more efficient supply chains.
For instance with new improvements in Machine Learning and sensing, software ‘bots’ can analyse massive troves of data to learn from historical performance and trends to predict future outcomes for the supply chain industry. This might include proposing a faster route for delivery trucks or giving recommendations on managing stock levels at a given warehouse. Moreover, AI and Machine Learning can harness the data collected by the Industrial Internet of Things (IoT) sensors, which remotely locate, manage and control shipping containers and fleets. This gives businesses instant access an unprecedented level of real-time information across the modern supply chain.
The future of supply chain and logistics in a cloud world
There is no doubt that the future of supply chain management – from frontline e-retailers to last-mile logistics providers – is hyper digital and there is an urgent need for Australian businesses to move supply chains to the cloud if they want to remain competitive.
Cloud technologies such as AI, Machine Learning and IoT offer significant opportunities to improve operational efficiencies, automate processes, empower employees, and build customer loyalty.
The logistics industry is becoming a data driven industry and the clock is ticking for businesses to digitalise or risk missing the opportunity to expedite first-to-last-mile logistics.