The last few years have without doubt, witnessed an acceleration of supply chain volatility. A recent survey by Make UK highlights the knock-on effects to supply chains from increased energy, transport and raw material costs, as well as transport availability, with 80% of companies saying that increased energy costs have caused disruption to supply chains. This new world has created a need for resilient supply chains and warehouses which have the elasticity to cope with fluctuating capacity and demand, while demonstrating best practice in efficiency, safety and sustainability.
Designing a truly digital warehouse to meet the demands of the supply chain of the future requires the right data, the right platform and the right people. However careful consideration must be given to the way in which a strategy is created.
1 – Data data data
While the intellectual property (IP) of a business was once tied to a product’s unique selling points (USPs), patents or the customer experience (CX), the most valuable commodity in any business today, is, without doubt, data. From a macro perspective The Economist claims that data has overtaken oil as the world’s most valuable commodity, so it stands to reason that in order to control the direction of a business, organisations need control over the data they process. The courier DPD is a good example of an organisation which did just this, exploiting data to become a market leader. Having invested in a data strategy, and an app from which to track the progress of packages, it grew 40% year on year in the wake of the project.
When you consider that we produce an estimated 2.2 quintillion bytes of data every single day, and that 80% of the data needed to run a business sits outside the organisation’s four walls, the critical nature of it comes into laser focus. Harnessing and understanding this data is pivotal to undergoing digital transformation and driving performance.
Before starting any kind of digital transformation, a data management strategy, ideally led by a Chief Data Officer, must be considered. While there are many options for the organisation of data, data lakes have become a popular means of putting data into common formats which can then become easily accessible and malleable, and used across different applications as appropriate. Data lakes aggregate everything, independent of source and format, covering both structured and unstructured data, and storing it in its native format. The data is processed appropriately, irrespective of size limits and formatting restrictions.
Once a data lake is in place, new technologies such as artificial intelligence (AI), robotic process automation (RPA) and augmentation can provide further value to a data strategy in that they can support repetitive low value tasks to free up resources. While this kind of activity was once confined to the finance department, the capability now extends way beyond the balance sheet, bringing automation, and advisory processes to the rest of the business.
On the factory floor in particular, we’re seeing a shift from predictive tasks to prescriptive ones, whereby AI-centric data insights can inform decisions on what to do next based on analysis. For example, insights can predict if a machine is about to fail based on analysis of past history and current usage, and then warehouse planning can be re-organised, or certain processes re-mapped, to maintain on track with schedules and service level agreements (SLAs).
2 – Is cloud optional? (spoiler alert: no)
With supply chain volatility the new normal, according to Make UK, almost a quarter of companies have between 51 and 100 suppliers, with 14% claiming to have more than 200. Over a third of companies have increased their total number of suppliers in the last two years. Against this backdrop, it’s not uncommon for goods to move through 50 layers before they even get to you, and that’s without major incidents such as that witnessed in the Suez Canal back in 2021.
With end to end supply chain capability the goal, cloud is a core building block in setting out the means. Cloud makes interconnectivity with third party partners easy, and herein lies the key to harnessing supply chain complexity and creating agility to steady volatility.
Some platforms for example, connect businesses to all partners, including manufacturers, brokers, 3PLs and banks through a multi-enterprise cloud-native supply chain network. This means that in the event of an incident like that witnessed in the Suez Canal last year, those customers using such a platform had the breadth and depth of visibility re-route, recalibrate and recommend alternative to circumnavigate the bottlenecks.
Some of the biggest global brands rely on these kinds of networks such as this to fulfil their brand potential. Nike for example, doesn’t own a single warehouse, instead, bringing a huge volume of trading partners globally together to represent the organisation. Its reputation for quality and next level CX is built on responsiveness in the supply chain, reacting quickly to demand, and delivering custom built solutions and designs to its market. When you consider that its supply chain changes 50 times per second, it is clear that this kind of reputation can’t be maintained without a robust and intelligent supply chain platform. Such networks represent the fabric of its supply chain, knitting every aspect together. In practice this means that every partner across the chain sees any new notifications in real-time.
3 – The power of the platform
Navigating the ‘how’ and ‘why’ of transformation typically starts with more questions than answers. When it comes to the digital piece of the puzzle, organisations are faced with a plethora of different technologies, systems, applications and capabilities, all promising to bring value. Staying true to the goals and priorities of the project is paramount in honing in on the right ones.
It’s important to have a vision for a digital fingerprint which has resilience, longevity and flexibility. Once you know what and how you want to change, it’s easy to work backwards and create a list of features and benefits before marrying capabilities with specific needs.
However, it’s prudent to remember that on their own, these applications are not going to deliver fundamental change. They won’t necessarily integrate with other providers, and disparate systems inevitably bring inefficiencies and risk.
For the depth of change necessary, it’s all about the power of the platform. Leveraging such a platform delivers both the foundation, and the all-important data lake, to accommodate and integrate the selected business applications.
And it’s the platform which brings the ability to react quickly, using all available information to support not only big disruptions such as the Suez Canal incident, or indeed Brexit, but the many smaller ones which organisations face daily. Out of the box, easy to configure, and with extensibility tools to deliver last mile functionality, getting this part right is crucial for long term transformation.
4 – The people factor
With the right data, and an agile flexible infrastructure in place, the way can be paved to re-imagine the way in which the business is run. Through involving people from across the organisation, both top-down and bottom up, to achieve cultural alignment, value can be pinpointed and tangible performance improvements made. The maturity of digital twins can expedite this element through allowing people access to a real world model of the warehouse from which to pursue analysis and adjustments.
The warehouse of the future is of course digital, but in this context, digital is about much more than automation of processes and enhanced workflow. The warehouse of the future empowers people and creates value through leveraging multi-dimensional data across a resilient and agile cloud-native supply chain platform.
Only through adopting a strategy focused on the core pillars of data; cloud; platform and people, will warehouses possess sufficient elasticity to cope with fluctuating capacity and demand, and the tools to navigate both internal, and macro-economic volatility both today and well into the future.
