Improving logistical connectivity and reducing supply chain tiers can be a crucial part of an organisation’s success. Changing product designs and distribution networks can eliminate multiple suppliers and minimise intermediaries, increasing control and transparency. Additionally, it improves demand management by eliminating the need for third-party inspections. To maximise these benefits, consider implementing these strategies. But how can you improve logistical connectivity and reduce delays?
First, retailers must improve end-to-end visibility and collaborate across functions to resolve problems. Typically, supply chains are tracked through multiple disconnected data systems. Introducing a digital control tower to integrate and consolidate all data systems will create transparency and accelerated response times. By reducing bottlenecks and enhancing visibility, retailers typically improve fill rates by 10 percent and reduce excess inventory by 30 percent. Consider the benefits of a BRC Audit for your retail business. Find out more at https://mqmconsulting.co.uk/articles/internal-auditing-as-part-of-the-brc-global-storage-distribution-standard/
Just-in-time (JIT) inventory systems have long been the standard for industrial supply chains. However, in recent years, many manufacturers have started experimenting with JIT and have found that it is not as effective as they had hoped. For instance, JIT does not work when certain components are short-lived. In the retail industry, retailers have tried “pack and hold” strategies – ordering in bulk to avoid stockouts but gambling with unsold inventory.
While implementing a robust solution is essential to ensure that the product reaches its destination on time, retailers should avoid concentrating their business with a single supplier. This will help alleviate capacity constraints and open up opportunities to supplement capacity. A fragmented supplier base will vary based on each supply chain leg. If retailers rely on ocean freight, they should revisit their existing arrangements and explore other alternatives, including non-vessel operating common carriers, freight forwarders, and other modes of transportation.
Delays occur because of various reasons, including a shortage in a commodity. A container may sit idle at a port for a week while waiting to unload. When this happens, it reduces the capacity of shipping companies, and a ship will be out of service for a week or two. As a result, the production cycle is interrupted. It takes a long time to restore production. But with the use of new technology, delays can be greatly reduced.
Although reducing disruption risk can increase costs, executives tend to avoid tackling these issues because they believe this will lower cost efficiency. In the meantime, managers can avoid concentrating too much capacity, resources, or suppliers by reducing their risk. In general, it is better to overestimate the likelihood of a disruption than underestimate the cost of a single supply chain event.