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OPINION: Once the supply chain crisis subsides, we can digitally transform our way to a better future

By Quy Le, Head of Delivery, FPT UK

It was impossible to go through 2021 without hearing about the crisis afflicting global supply chains.  Back in the first quarter of 2020 the pandemic triggered a catastrophic sequence of events that would ultimately impact how efficiently the world’s distribution networks operated.

As Covid-19 ripped across the world and instigated lockdowns across nations and industries, including manufacturing, many assumed that global demand would drop.  As we know, the opposite happened, and the pandemic ended up supercharging the public’s appetite for goods as people ended up spending less on things like travel and eating out, preferring to make a beeline for shopping online.  Retail sales for items like home improvements, home office setups, exercise machines et al all went through the roof.

Even though production could be increased to meet the demand, sourcing parts or raw materials gradually became more difficult as parts of the world remained in differing states of shutdown.  Transportation delays, temporary port closures, container shortages, absent and reduced workforces all conspired to destabilise the intricate supply lines that delivered items around the world.  No industry escaped the carnage.  Food supplies, on occasion, became sporadic.  The availability of consumer goods was, for several periods, erratic.  A lack of vital semiconductors caused upheaval across several industries, notably the automotive sector, with production lines around the world having to close for weeks at a time due to a lack of components.

The pandemic created the conditions for a perfect storm – collapsing all the efficiencies built into the world’s supply chains.

When our distribution systems do return to previous, and they will, operating smoothly once again, they are the epitome of precision collaboration, coordination and communication.  These disruptions over the last two years have taught us some valuable lessons as well as bought us time to reflect on how products are produced and some of the insourcing and outsourcing requirements.  The vulnerability of our supply chains has forced some re-evaluation on how we can improve things and whether technologies such as digital transformation, artificial intelligence or 5G could play a part in alleviating problems if they occurred again.

Data Analytics is an imperative in logistics

Today, data is driving the economy and disrupting how businesses operate.  Data analytics in logistics is one of the domains that is experiencing widespread adoption and utilisation.  The intricate structure of the supply chain makes logistics a perfect use case.  Information can be extracted from numerous internal and external sources and touch-points along the chain i.e., traditional operational systems, sensors incorporated in vehicles, connected devices, suppliers, partners and customers.  Valuable insights from the data will unlock efficiencies and optimise business.

Faster delivery at lower cost

With hundreds or even thousands of vehicles to manage daily, determining the optimum travel routes to minimise fuel or energy costs while ensuring deliveries are on-time is a major headache.  Data analytics have been streamlining route optimisations – the process of determining the most cost-effective route with routing systems.  Vast amounts of data are garnered from shipment information, vehicle capacity, holidays, road quality, traffic densities, crime hotspots and weather conditions which can be leveraged to calculate the most efficient route and stop sequences for fleets or to determine the most suitable modes of transportation (airplane, truck, train or ship) for long-distance routes, as well as the junction points to optimise the flow through the supply chain.

With real-time-routing solutions, on-the-fly data is collected and analysed to control delivery routes.  Shippers, drivers and recipients can respond to real-time events and plan remediation alternatives.  Routing intelligence balances changes in weather, traffic congestion and access to each destination with information about the availability and location of the receiver guiding drivers to the next best point of delivery to avoid an unsuccessful delivery attempt.

Not only do route optimisations systems help to reduce fuel and energy costs, overtime expenses, windshield and planning times they also improve the on-time arrival rates and fleet utilisations; the product being improved customer satisfaction.

Elements of AI are also finding their way into predictive analytics systems for intelligent transportation, route and demand planning.  Big Data from the supply chain is analysed to identify patterns that help provide insights into every link of the supply chain.

Smarter warehouses

Warehouses go beyond the role of just storing and handling goods.  Smart warehouse systems utilise various interconnected technologies to form an ecosystem to automatically track where goods are received, identified, sorted, organised and prepared for shipment.  Smarter warehouses automate the entire operation from supplier to customer.  Data analytics, combined with automation, Internet of Things and artificial intelligence, provide enterprises with a bird’s eye view of the entire warehouse operation and relay back performance information related to the organisation and the delivery of goods.  A smart warehouse improves productivity, efficiency, and accuracy while providing more flexibility and capability.

Lots of information can be collected from sensors to help keep track of parcel movements and detect abnormalities in the routes of forklifts.  The monitoring of temperature and moisture levels will help companies plan the most efficient routes for picking perishable products and reduce wastage.  While insights into inventory management reveal which parts of the warehouse are the busiest i.e., what products are in high demand and where should seasonal products should be stored to maximise full use of the floor space.

Furthermore, logistics operators have control over stock inventory at each warehouse based on historical and real-time data on customer demand and buying behaviours.  An example where this may be useful is when popular products are ordered within a certain area.  The closest warehouse to that region carries a higher inventory of that specific product to meet demand.  Data-related technologies also enable companies to optimise the number, location and capacity of warehouses to minimise capital investment and ensure more efficient warehouse management.

More accurate planning

Over the past few years, the logistics industry has benefitted from predictive analytics advances.  Algorithms anticipate future behaviours based on historical data for predictive analytics to forecast supply and demand.  Businesses can make more intelligent decisions about inventory planning, shipments, labour and capacity requirements.  Logistics operators can generate reports on customer preferences, forecast demand and allocate workforce and resources accordingly.  Predicting machine failures more accurately would make maintaining a site easier.  Repairs or servicing can be factored in before they need to occur.  Catching these issues ahead of time, maximises equipment uptime, reduces delays and rationalises operational costs.

Digitally transforming logistics for a better future

Global supply chains are lean and mean – and operate smoothly.  While the pandemic exposed some of its fragilities embracing digital transformation has the potential to help logistics companies to take operations to another level – improving efficiencies, enhancing customer experiences as well better preparing us for unexpected events.  Exploiting the data available is central to success as we digitally transform our way to a better future.

The rise of the virtual supply chain

By Adam Bimson, Chief Customer Officer, Vuealta

How do you deal with a business that will sell your products, use data and algorithms to adjust product costs, and get said products to your customers in a manner that’s faster, more efficient and far superior to anything you could do yourself? This is a question that publishers have been wrestling with for years, and a challenge many other sectors have failed to heed. 

The business in question is Amazon, and it is dominating sector after sector thanks to a very simple process. It has access to a lot of data, which it uses to gain insights into the likes of price elasticities and demand shifts. Its data-rich virtual world, powerful algorithms and empowered staff enable it to make quick decisions based on the latest insights. These data-driven advantages are built on top of a fast and agile supply chain, which has the ability to deliver ultimate customer satisfaction. Now, incumbents have begun to realise that Amazon is on a course to steal huge market share, and they’re scrabbling to find a response in order to compete with the digital giant. 

The question is whether other businesses can truly compete with the ex-Bezos machine, or whether they must accept their fate and take what they can get from a company that has revolutionised the way we buy everything, from books and groceries to technology infrastructure.

In fact, they can compete. One answer lies in virtual supply chains and requires businesses to recognise that supply chains compete, not companies. The supply chain will of course always be physical, but if multiple businesses can act as a single intelligence sharing entity, there is the potential to become a strong Amazon competitor. 

Partnership could be the key to better agility

So how can the brands that consumers have come to know and love achieve the same agility as Amazon? Ultimately, it’s not necessary to invest in controlling every aspect of their own supply chain, but what they should consider is partnering with some or, even better, all of the other players that make up their supply chain networks. For example, partnering with retailers gives suppliers additional market data, information and insights, which in turn empowers employees by enabling rapid decision-making. Integration with suppliers, on the other hand, enables retailers to offer a more agile response. 

Ultimately, Amazon is showing brands that they cannot keep acting as islands.  

This has also led to the major shift towards direct to consumer (D2C) that we have seen in recent years, which has been further propelled by the pandemic. The advantages this model offers, including having direct access to POS data, is one of the key reasons it is being so widely embraced by so many brands and wholesalers, and will continue to be post-pandemic. In fact, a recent study found that more than half (52%) of wholesale businesses have begun D2C selling since the coronavirus pandemic first started, while another 18% plan to launch D2C sales in the next 12 months.

D2C gives companies end-to-end control of their relationship with and delivery to the consumer and allows them to generate in-depth insights from the data gathered as a result, just like Amazon. So, brands are ultimately going D2C to gain Amazon-like benefits. 

The brands embracing these different approaches are directly targeting the three elements that make Amazon’s offering so strong – data, insights, and agile response. 

A new way of managing supply chains

From the perspective of a virtual supply chain, data and intelligence provide the insights that brands need to empower people and processes to make decisions rapidly. They inform pricing, trends, and ultimately decisions. 

To create a true virtual supply chain though, this should also be paired with the ability to offer an agile response. This ultimately needs to be underpinned by a fast supply chain and good information sharing that ensures insights are delivered downstream to the suppliers. Great scenario planning is also increasingly recognised as a core competency in any supply chain as it supports a great number of possible responses to expected or unexpected market changes by enabling people to quickly assess and evaluate feasible options and make the best decision for optimal response. This might be in response to consistent moments in the calendar, such as peak seasons; unforeseen events, such as political coups, trade wars or global pandemics; or they might be unseasonable weather influencing what consumers want to buy. 

Whatever these events are, scenario planning, driven by data and the insights they provide, is critical for brands looking to build a supply chain that is agile and can adapt to changing circumstances without impacting the consumer experience. 

Mirror Amazon, don’t replicate it

Brands are only going to stop Amazon eating their lunch if they can identify what has made the ecommerce giant a giant, and then see how they can replicate it for their own business. That doesn’t mean companies becoming a mirror version of Amazon; it means identifying strengths and weaknesses, finding partners to plug the gaps, and underpinning it all with data intelligence that can help it react as rapidly and intuitively as Amazon.

Why digitising supply chains can help pay for itself

By Derek Bryan, VP EMEA, Verizon Connect

For some businesses, digital transformation represents an opportunity to improve how it operates and connects with partners and customers; for others, it can seem like a headache with a considerable price tag attached. 

While it’s true that any change requires careful planning, those in the ‘loathe camp’ may be overlooking the benefits and considerable return-on-investment (ROI) digital transformation can generate, especially across supply chains. 

Opening the door for automation

Most supply chain managers are time poor and have many plates spinning at the same time. Digitising the supply chain can open the door for automating administrative tasks, freeing up time to improve operational performance. For example, it can help to check for human error or flawed data input throughout the supply chain, assist with job allocation, automatically update clients or supply chain partners on the status of jobs, and simplify compliance processes. 

Automation is often labelled as a threat to job security, particularly those which involve physical labour as is commonly found in supply chain-based occupations. This is far from reality for two reasons: first, the technology required to carry out all the tasks required of a human worker is either too expensive or too sophisticated to be economically viable for businesses; second, automation tends to impact time-consuming, repetitive tasks such as reporting, job allocation and scheduling. This means that workers and supply chain managers are empowered to focus more of their time on value-add tasks while the admin gets taken care of. 

Channelling value back to the customer

At its core, digital transformation has the imperative to make everything centred around meeting the needs of customers. While digital tools have enabled new service offerings to customers, the supply chains they rely on have become increasingly intricate. Not only do supply chain managers contend with more complex networks of stakeholders, they must also operate within narrower time frames due to rising customer expectations.

Most organisations already have the tools required to fulfil customer orders on time, such as route-planning, GPS tracking and live traffic updates. At the very least, customers expect to be kept regularly updated on the status of deliveries or engineers, especially when it comes to delays.

With the right digital tools at hand, such as an integrated software platform that automatically tracks the status of jobs and processes, organisations can enhance both the quantity and quality of customer touchpoints either online or via mobile applications – literally putting delivery information in the palm of the customer’s hand.  

This also helps notify managers when mobile workers have completed a job, validate the condition of their cargo, and create or reassign jobs in near real-time, based on which worker is most suitable for each delivery or job. Not only does this mean workers are able to complete every aspect of their job without disruption, but supply chain managers obtain a clearer view of whether their mobile workforce is operating effectively, and on time.

Unexpected benefits

A digital supply chain can bring unexpected benefits too. The issue of vehicles being empty on their return journey is a challenge for lots of companies. Aside from the sunk fuel and worker costs, the shortage of drivers currently being faced in the UK makes it even more difficult for supply chain managers to reliably get goods to where they need to be, when they need to be there. 

Enabling the integration of vehicle tracking systems with intelligent software platforms to provide updates on available freight capacity in near real-time, means businesses are able to fill empty vehicles on their return journeys by identifying their live locations and offering the capacity to companies looking to move goods to destinations on route. This means that assets can be utilised, helping to reduce empty miles and emissions, increase productivity, and making transport operations more cost efficient. 

The future is software-defined

Digital tools don’t just sit on top of existing structures, they create a platform upon which supply chains are orchestrated. In an age where just about anything can be digitised, organisations can use this to identify operational inefficiencies in the supply chain and open up new revenue streams. Not only that, the inherent flexibility of software-defined supply chains gives businesses the chance to do this continuously and easily scale their products and services to meet changing demands.

Fighting plastic pollution with technology

Returnable and re-useable transit packaging and equipment is a key business and environmental asset; unfortunately, a huge amount is lost or stolen each year. Warren Harris, Insight and BD Manager at Bakers Basco tells us how they’re using to tech to cut down on attrition and catch thieves in the act

A major part of the issue is about how we use plastic throughout society, including in the logistics and supply chain. For example, in the bakery industry, Bakers Basco has been using GPS technology for a number of years to help reduce the attrition rates of our plastic bread baskets and dollies. These products are designed to be reused again and again for a life span of up to 10 years, and then, in many cases, recycled once they come to the end of their useful life.

In the current climate, with very real and valid concerns about the volume of non-returnable and non-reusable plastics in the supply chain, there is an increasing focus on Returnable Transit Packaging (RTP).Unfortunately, like many RTP products (like pallets – most of them are supposed to get returned and reused), our plastic baskets and dollies are just too well-designed, sturdy and all-round useful – so they get ‘borrowed’ or taken out of the supply chain. Of course, there are additional costs in terms of harm to the environment – people who misuse returnable packaging tend to dump surplus items at the side of the road or in canals, rather than disposing of them responsibly. Our estimates suggest that 90% will go into a skip, the local council will pick them up and they will end up in landfill – and we all know what that means for the environment.

The right kind of plastic products, used in the right way, can majorly contribute to solving the plastic problem, while helping companies cut costs and improve margins through their use in the ‘circular economy’, where things are built to last and can easily be recycled and the raw materials reused when they reach the end of their life. Bakers Basco manages a pool of circa four million baskets and dollies throughout the UK benefitting members such as Fine Lady Bakeries, Warburtons, Hovis, Allied Bakeries and Frank Roberts; they are an essential part in the transportation of millions of our favourite products to retailers each week.

Aldi UK CEO Giles Hurley last week sent a letter to suppliers outlining the supermarket’s pledge to have all their own label products in 100% recyclable, reusable or compostable packaging by 2022, while Iceland MD Richard Walker recently stated that packaging is only around 5% of the food system’s carbon footprint. With these greener minded changes taking effect in the food industry, how products are transported then becomes a key consideration. Returnable Transit Packaging is going to be an important factor in ensuring that goods delivered in less packaging still reach the shelves in saleable condition, and RTP can also be designed to fit perfectly together, maximizing the amount of stock transported at once, and minimizing the number of delivery vehicles on the roads. 

But for the environmental impact of this harmonious circular economy to be seen, we need to devise innovative ways to reduce RTP equipment losses.

Technology has opened up new means of tracing and tracking items as they pass along the supply chain. Such innovations can prove crucial to driving efficiency and cost savings, at the same time addressing key requirements such as sustainability by saving a fortune in disposable packaging and never going into landfill.

Recent examples of innovations we’ve implemented include impregnating the bread basket plastic with a special traceable glitter-like additive which makes them identifiable after recycling and reprocessing to discourage the illegal procurement of the equipment for this purpose. We’ve also successfully deployed tracking technology to make our equipment easier to locate and recover should it fall out of the supply chain, such as satellite imagery and GPS chips. Looking to the future, we’re continually on the lookout for new and innovative ways of cracking down on the loss of returnable transit packaging and have been investigating RFID technology. 

To us, the case is clear; the higher we push up the retention and reduce the attrition rates of our bread baskets and dollies, the lower the cost to both the bakery industry and the environment through dumping and unnecessary recycling.

Image by Hans Braxmeier from Pixabay 

FTA sceptical on smart tachograph financial benefits

Smart Tachographs will aid compliance with drivers’ hours rules but any claims of financial benefits to businesses are misguided, according to FTA.

The business organisation, which represents the interests of the logistics sector, refutes claims made by the European Commission when the law making the new devices mandatory was made in 2014 that it will save logistics businesses a total of EUR 500 million through increased efficiencies. 

James Firth,  FTA’s Head of Road Freight Regulation said: “Smart tachographs will aid enforcement of the drivers’ hours rules; regrettably, enforcement agencies across Europe face a constant battle against those who would try to compete unfairly by driving beyond the legal maximum hours. The  next generation tachographs herald a new era in the fight against lorry drivers driving  when fatigued, but while they will help with enforcement, but they will not save the industry substantial money.”

Firth continued: “Fortunately for drivers, they will notice little change; the new models look identical to their predecessors and drivers do not need to replace their tachograph cards. Furthermore, the added satellite location data will help authorities to catch non-UK based operators who work illegally in the UK market. The satellite location function does not provide live tracking – a common misconception – instead, it takes a location ‘stamp’ at start and end of duty and every three hours of continuous driving.” 

The FTA says efficient logistics is vital to keep Britain trading, directly having an impact on more than seven million people employed in the making, selling and moving of goods. It says that w ith Brexit, new technology and other disruptive forces driving change in the way goods move across borders and through the supply chain, logistics has never been more important to UK plc. 

Image by MikesPhotos from Pixabay

GUEST BLOG: Technology and the production of jewellery – the perfect match?

Technology has played a significant part in improving the efficiency of the jewellery design and manufacturing process. Here’s how… 

Computer-aided design 

CAD is an important piece of technology for many businesses. As more people look for products which are unique, computer-aided design (CAD) has become a key feature of bespoke jewellery design and manufacturing.

This type of design uses computers to create and modify a design before it goes into production. It can generate precise 2D and 3D models, as well as technical illustrations. 

Neil Dutta from Angelic Diamonds, retailer of yellow gold engagement rings, says: “CAD allows for the creation of more intricate designs, as the piece can be seen and edited close-up in a way that didn’t used to be possible. Customers can add their own input to the designs after seeing the realistic images too. Jewellery is often a significant investment for the buyer and it’s important for both the client and the seller that the buyer is satisfied with the end-product.” 

When it comes to jewellery which are to be a gift or hold special meaning, many customers have different tastes. From bold designs to delicate vintage styles, there are a lot of variants that people prefer. Often, people want a one-off piece made too, and CAD can help with this. 

Not only does it reduce the amount of time needed to create bespoke designs, but it also allows for the generation of designs before the finished product is manufactured. The technical illustrations which can be produced allow the customer to see their desired product from different angles and in a realistic format. This means that any modifications to the piece can be made before the jewellery is created, saving wasted gems, metals and resources if the client changes their mind.

Advancements in laser technology

Laser engraving is a modern alternative for making one-off, custom or unique designs. Laser technology can be used when engraving metal pieces or adding inscriptions and detail to jewellery. The smallest of details can be created with a laser, due to the precision of the machinery, meaning that wording is clearly legible once engraved. 

Although Laser technology has been around for some time, advancements in lasers are continually progressing the industry as highlighted in the above.

Advancements within print 

In the jewellery industry, 3D printing works by using CAD to create 3D printed wax or resin models of jewellery. These are then used to cast delicate pieces with the fine metals — 3D printing with precious metals to begin with would be overly costly. These moulds mean that separate sections of metal don’t need to be soldered together, creating a more solid and complex piece of jewellery. 3D printing has opened a range of opportunities for a lot of sectors, improving the efficiency of the manufacturing and production process. 

Shoes by Shaherazad specialises in jewellery for shoes – founder Shaherazad Umbreen says: “I’ve experimented with 3D printing a lot, as it allows low-cost testing of product designs. In the past, going directly to metal-bashing techniques meant that if a design didn’t look right, then precious time (and costly metals) were lost. “Now, I design in CAD, print in 3D, and only then when the design is just right do I then use the 3D mould to create a piece of jewellery. Many of my designs are in 22 carat gold, so this new process has saved me thousands of pounds and hours of time.” 

Who knows what the next revolution in the industry will be! Although technology of jewellery has changed over time, people still appreciate hand-crafted pieces and jewellery that has taken care to create.