The next iteration of supply chains 

Global supply chains have been thrust into the limelight during recent months. Labour shortages, fluctuations in inventory and peaks in online activity have caused the crisis we have been witnessing and don’t seem to be going away. For many consumers, the supply chain – the process of how they receive their goods – wouldn’t have even crossed their mind.  Recent events however have put the sector firmly under the microscope.

In the UK, Prime Minister Boris Johnson has taken note of the crisis and has committed Sir David Lewis, the former CEO of Tesco’s and a supply chain expert, to help solve the challenges before the festive season. This appointment, combined with temporary visas for overseas workers is the government’s plan for solving this bottleneck in getting goods to consumers. This focus on our supply chains has caused our entire industry to rethink how we view our sector and has prompted a discovery set to shake-up what we know.

The Evolution of the ‘Supply Chain’

For those of us who work in the industry, the term ‘supply chain’ has been ever-present. Manufacturers, logistics and fulfilment operations, transport providers and the service providers of the industry (suppliers, vendors and software makers) have become acquainted with the term. But we have got to the point where the ‘supply chain’ as we know it, is dead.

The term ‘supply chain’ just isn’t relevant to what we are actually seeing unfold in fulfilment centres and warehouses. It isn’t just about one link connected to another link in a linear system. Despite the sector’s practical nature, it is important to focus on the terminology we use to ensure we can plan effectively for the future. Visualising our supply chain as a linear system from a product’s raw point of origin to the end consumer is not viable anymore. We must think about the supply chain as an interconnected mesh of nodes, each serving the wider objective of seamless consumer fulfilment.

The term ‘supply chain’ rose to popularity in the mid 1900s when fulfilment and logistics was a linear sequence. However, the businesses involved with logistics in 2021 are significantly more complex than those in 1950. There are more challenges associated with fulfilment and more connections between the movement of goods in our economy. Combine this with rising customer expectations and it is clear to see why a linear system wouldn’t work in modern fulfilment.

Within this new mesh of nodes, each of the elements (manufacturers, logistics and fulfilment providers, warehouses, etc.) must learn new roles and develop new capabilities to construct the omnichannel fulfilment network. We must change the way we think about our supply chains and focus on the future. Forget stores, warehouses and fulfilment centres, each is now a fulfilment node. This is the goal we as an industry must work toward.

Challenges associated with this new network

This network is how modern fulfilment needs to operate in order to support changing consumer behaviours. From this, we now need to develop and mould it into something that works for our industry and each node. Working out the challenges relating to each step will ensure effective planning. Here are three factors which organisations must consider:

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Each node must be able to plan and execute in real time. This enables autonomous solving of problems without the need for human interference. This is where robotics and automation make a real difference. Each element of the system must be connected and aware of what is happening across the network. Without this, the network falls apart. Automation technology enables this awareness and ensures each section of the network understands its role, but also how its role affects others.

To ensure operational efficiency, each node must be able to interconnect and communicate effectively. This is bolstered with network awareness.

Components must access to inventory data, the location of this inventory and access to order information for complete awareness and intelligence across the network. With this information, nodes need to interpret and act upon this intelligence in real-time with no delays.

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Modern fulfilment must involve the consumer

Within this new network, the consumer must be considered and included to give them the best experience and buying journey. If the consumer is included in every process and has visibility over each stage, they can select the fulfilment options based on data and real-time progress. This is instead of just being updated in the gaps between nodes and being told that their preferred fulfilment option is unavailable.

Not only does this increase end-customer satisfaction but is also creates realistic expectations for both consumer and company. An example of this would be that you could send the end-customer a notification that their preferred SKU is unavailable, but also give them multiple other options. This can be done whilst you are processing the order, building trust and a better rapport between retailer and the customer, and making progress towards frictionless fulfilment.

We are at the point in the supply chain’s evolution in which it is obvious that we need a mesh of nodes within the fulfilment network. The business and customer demand are there and needs to be acted on. We now need to build out these nodes and move the ‘supply chain’ on from a chain to the interconnected network.