Supply chain disruptions are a common occurrence and will continue to happen in the future. To help your supply chain withstand adversity, here are four strategies you can consider to future-proof and fortify your supply chain.
In today's global marketplace, consumers have high expectations for fast delivery and a wide range of product options and retailers must work to meet these demands in order to stay competitive. One way to stand out from the competition is to extend the range of products and commodities offered, which can lead to increased sales and profits and reduced market risk.
However, expanding the range of products, known as SKU proliferation, can also lead to increased complexity and the need for more inventory storage space. It's important to manage inventory efficiently to avoid the need for a larger, more costly warehouse.
This is where AutoStore can help. The AutoStore system can free up to 75% of existing storage space, allowing businesses to diversify their SKU offerings without increasing overhead costs. By implementing AutoStore, businesses can successfully manage their growing inventory and remain competitive in the marketplace.
Reverse logistics, the process of returning products, can be a significant challenge for retailers, especially in the era of e-commerce. Online purchases are returned more frequently than in-store purchases, with rates as high as 20-30% for online returns compared to 8-10% for in-store returns. This increase in returns puts additional strain on retail supply chains, which are already facing volume challenges. The process of handling returns is time-consuming and resource-intensive, adding to the overall challenges faced by retailers.
There are several reasons why consumers may return products they've purchased online, including receiving the wrong item, receiving a damaged product, or receiving a product that doesn't match the description. These returns can be costly for retailers, as reverse logistics requires up to 20% more space and labor capacity than the original order fulfillment process (forward logistics). This added cost is compounded by the fact that industrial space is often limited, making it difficult for companies to handle returns efficiently.
Effective reverse logistics management is crucial for retailers who want to maintain a healthy inventory turn and keep operating expenses under control. By understanding the main causes of returns and implementing the right technology and strategies in place, retailers can minimize the impact of reverse logistics on their supply chains and can turn these challenges into opportunities.
The AutoStore solution can help businesses effectively manage their reverse logistics processes by improving picking accuracy and providing fast put away, optimized storage, and prioritized pick of returned goods. This allows retailers to reduce return rates and efficiently handle returns, making them available for sale to the right customers at the right time. Parts Town, for example, has seen a 50% improvement in picking accuracy since implementing AutoStore, and the robots handle roughly 75% of parts picks in just 7% of the total warehouse space.
By implementing a system that can support returns management and streamline reverse logistics operations, businesses can turn the challenges of returns into opportunities for success.
The recent pandemic has taught us the importance of a resilient supply chain, one that can bounce back from adversity and adapt to changes. One way to ensure the future-proofing of a supply chain is through digitization, which involves incorporating advanced digital products and services to streamline operations and improve management. According to McKinsey, companies that have adopted AI-enabled supply chain management have seen improvements in logistics costs by 15%, inventory levels by 35%, and service levels by 65%.
To maximize the return on investment and ensure the longevity of a facility, it is important to invest in tools and technology that consider the current and future needs of the business. This includes considering factors such as design, size, storage capacity, and function. By investing in the right tools and technology now, a business can stay ahead of the curve and be prepared for future growth.
One supply chain digitization that can support a future-proof supply chain is warehouse automation. These systems can easily adapt and expand to meet the capacity requirements and order fulfillment demands of a growing business.
Digitizing the supply chain and investing in supply chain visibility are two distinct, yet related, processes. Digitizing the supply chain involves using technology to automate and streamline supply chain processes such as managing orders, tracking inventory, and coordinating logistics. This may involve integrating various supply chain solutions and processes.
On the other hand, investing in supply chain visibility refers to improving the ability to see and understand what is happening in the supply chain at all times. This can involve implementing tools and technologies that provide real-time visibility into various aspects of the supply chain, such as inventory levels, order status, and logistics.
Having visibility into the supply chain can benefit a business in several ways:
A study by Microsoft found that 51% of business leaders have a data strategy in place to drive revenue and productivity. It’s difficult to predict the future, but one thing we know for sure is that the most efficient supply chains will be those that can effectively use their data to optimize processes, anticipate changes in demand, and enhance availability. However, the key is not just in collecting data, but in integrating it across various systems to achieve end-to-end visibility.
To accomplish this, businesses need to invest in tools and technologies that can effectively transmit information between systems. One such example is the AutoStore fulfillment software, QubIt™ Fulfillment Platform, which is a cloud-native solution that can easily integrate with other operational applications through its API-first architecture (such as third-party fulfillment applications and routing and delivery systems) and complement existing IT systems.
With supply chains becoming increasingly complex and a wide range of data available from variety of sources, it is essential for businesses to have visibility into their supply chain in order to make informed decisions that align with their long-term goals. Without visibility, it can be difficult for businesses to fully understand the current state of their supply chain and make strategic choices that optimize processes, anticipate changes in demand, and enhance availability. Supply chain visibility helps businesses to manage complexity and make data-driven decisions that drive efficiency and profitability.