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Avoiding Supply Chain Disruption This Holiday Season

Frank Kenney
Avoiding Supply Chain Disruption This Holiday Season

Buckle up, folks! We’re entering the 2020 holiday shopping season, and this time around is guaranteed to be like no experience your company has ever had. It has started already, well before Black Friday, and stands to challenge even the most prepared of companies.

Whether you are a manufacturer, retailer, wholesaler or distributor, here are three key questions to ask yourself right now:

1. Are you ready? Meaning, are all of your potential sales channels and fulfillment systems humming in sync across your enterprise ecosystem: your ERP, your 3PL’s WMS and carrier’s TMS?

2. Are your business processes sufficiently digitalized to where you can deliver the expected customer experiences? Ready for buy online, return in-store?

3. Can you anticipate, visualize, and respond to supply and demand shocks by maintaining inventory levels in the distributed warehouses and do you have the 2nd and 3rd groups of carriers ready to tender in case your primary transport options reject your loads due to capacity restraints?

Each of these questions, in case it isn’t obvious, is really about the health of your digital ecosystem. Because before you can answer “yes” to any of these questions, the critical component of your ecosystem -- your B2B ecosystem integration platform -- needs to be up to the task of governing and controlling the digital interactions of your business in an era where eCommerce is dramatically reshaping the size and scope of your supply chains and fulfillment mechanisms.

Microsoft CEO Satya Nadella recently said, “We’ve seen two years’ worth of digital transformation in two months.” And he’s more than right about that. COVID-19 has hugely impacted human existence. It has dictated the new norms of face masks, social distancing and how we learn, how we work, how we play, and how we grieve. Students learn remotely through cloud-enabled devices. Workers work from home managing and monitoring automated floor operations. Football games are played with virtual crowds and we say goodbye to loved ones using cloud conference services once reserved for board rooms.

For the dozens of companies I speak with weekly that actively refuse to move to the cloud, there are hundreds of others that embrace the always-on, elastic, any-device access of cloud computing. I no longer try to persuade folks to move to the cloud; I just remind them that their competitors are taking advantage of the fact that I can transform 100,000 messages a minute, execute 10,000 rulesets and sub-processes in the same time frame, all with minimal operational personnel. And If I need to do more I can easily scale up.

It isn’t just us, either. Tech Industry titans like IBM, Google, Microsoft and now Snowflake are all relentlessly executing strategies that are shaping this cloud-first, cloud-only future, and they have the clout and financial wherewithal to change entire industries with their competitive offerings.

Similarly, retail industry titans like Walmart and Target are reshaping the way manufacturers, wholesalers, and distributors do business. If you can’t keep up with their changing guidelines, they’ll find other suppliers who’ll better enable them to deliver on the customer experiences they’re promising. The rules to retail are still the same, just expanded. That premium shelf space is now premium warehouse space and manufacturers still have to fight for it.

Brooks Kitchell, Managing Director and Head of Retail Strategy with Accenture, put all this into good perspective in a recent report about how retailers should prepare for the upcoming holidays, saying, “Retailers need to ensure their eCommerce capabilities are up to the task, with detailed visibility into demand changes and inventory – and a laser focus on seamless experiences and fulfillment efficiency.”

If you feel you’re ready for the frenzy that’s coming, how did you get there? If you’re not ready, here’s how you CAN get there.   

Acknowledge and accept the impact that eCommerce is having on your ecosystem. Ecommerce IS stretching further and faster into your supply chain. That’s why you need to take steps now to digitally enhance supply chain operations to accommodate eCommerce today – and for tomorrow.

Realize that the “flawless execution” your CEO keeps ranting about is essentially a call for greater real-time integration control. She’ll find budget for it when you tell her there is no other way to turn your multichannel supply chain into an omnichannel supply chain. The newest currency is customer NPS and brand performance. Perhaps I’m being melodramatic but nestled in the latest investor PowerPoint between safe harbor statements and EBITA fillings are two slides on NPS and brand.

Watch the macro trends impacting your industry. As we enter the holiday shopping season, consumer packaged goods, electronics, home improvement materials, furniture, furnishings, and the like are all currently experiencing growth at the expense of travel, hospitality and traditional brick & mortar sales, largely due to COVID-19. Capacity has thrown another wrench in the processes too: The outbound tender reject rate for refrigerated containers is at +43%! If you are a manufacturer of items that need to be climate controlled, that means close to one-half of your loads won’t be accepted on the first try. Oh, and the spot rates will throw your margins way out of balance.

Why am I so passionately telling you all this? Because it helps explain why a B2B ecosystem integration platform that’s designed to help you sidestep supply chain disruption through greater agility is the lynchpin in your go-forward success. Such a platform comprises:

  • APIs for connecting to the new sexy eCommerce front-ends and all the shiny transportation visibility services (Project 44, Macropoint, Sensitech, FourKites, etc.)
  •  EDI for exchanging the complex, time-sensitive purchase orders, load tenders and invoices
  • And a powerhouse orchestration engine to run everything else.

Error identification and resolution can be automated processes. PO number reconciliation with ASNs and invoices can be automated. And the onboarding and continual change management that happens in an ecosystem can be automated.

OK, so it won’t walk the dog, or change the windshield wipers. But it can shave off the thousands of man-hours spent manually processing stuff.

Suffice it to say, this holiday shopping season will be a wild ride. So, as I said at the beginning, buckle up!  And to calm your nerves, and help you manage through any coming waves of supply chain disruption that may hit you, consider downloading The Supply Chain Continuity Framework. It’s free.

Happy Holidays!

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