At this time of year, industry consultants and analysts state their predictions for global supply chain innovation trends in 2018 – from electric self-drive trucks to the Internet of Things and Blockchain. Instead of adding to those lists, here is my take on just three achievable global supply chain performance improvement steps that retailers and brands might benefit from in 2018:
Real-time, accurate visibility – The classic, perennial improvement objective for all supply chain managers! But it never goes away because ever-increasing consumer expectations continue to cause fragmentation of seasons, more distributed omnichannel delivery and ever-shorter cycles for planning, merchandising, sourcing and logistics. Retailers and brands have moved away from spreadsheets and invested in systems and service providers to start filling data voids and automate laborious tracking and reporting tasks. This helps with visibility, but few have plugged all the gaps and there is no room for complacency. Product development, global sourcing, production and import logistics functions combined should always strive to stay well ahead of merchandising calendars, while meeting cost targets. Any slack will soon be taken up by next year’s consumers’ expectations! Accurate visibility is essential – for 2018, two achievable goals should be:
1) Eliminate remaining data gaps and streamline supply chain operations by fully exploiting and integrating existing systems and those of service provider partners; and
2) Build a longer-term transformational strategy for supply chain visibility that leverages IoT and predictive analytics to deliver real-time supply chain agility with automated inventory positioning and decision support for unplanned incidents. Then, start implementing!
Extract the full value from PLM investments – Many retailers and brands have invested in product lifecycle management (PLM) systems. Few have implemented the full system footprint or unified processes and data from product concept to arrival at the DC, store or consumer. As a minimum, all data collected along the product journey to the shelf should be collected once and centralized in PLM: product specs, product descriptions, images, landed costs, packaging designs, compliance records, test results, customs classifications… just to mention a few. The purchase order should be a progressive process that automatically populates all fields when finally approved for release. For 2018, retailers and brands should expand their PLM footprints, in a prioritized manner, to realize the full value of their investments – increasing clarity, agility and consistency of operations.
Enable sustainable growth – We live and work in a complex world of diverse cultures, politics, threats and ecosystems. Many retailers are highly dependent on China and as we have seen in recent months, it is not easy to predict future trade agreements or costs with any nation. Additionally, consumers continue to become more aware of working conditions and other social compliance issues around the world, directing their wallet towards socially responsible preferred brands. Retailers and brands need an increasing level of vigilance to ensure reliable, sustainable and economically competitive sources of supply amidst changing risks, vendors, tariffs, logistics costs, transit times and more. Visibility (mentioned above) will be key, but so will contingency plans, second (and third) sources of supply, global trade information, recall plans, access to landed cost data and a traceability audit trail that will stand up to minute inspection. Blockchains, partners, sensors and prescriptive analytics will record transactions, watch shipments, provide traceability and prioritize sourcing alternatives in future, and retailers and brands should start developing plans with proof of concepts soon. But for 2018 the focus should be to shore up existing compliance processes and put in place rules-based decision support (manual or system based) for sourcing alternatives. Whether retailers and brands diversify supply away from China or not – knowing the alternatives and impact of staying or moving to alternative sources is very prudent.