Last week’s Prime Day serves as a prime example of peak season madness. Setting the standard high for distributors around the globe, Amazon’s summer peak event sheds light on the importance of high-velocity technologies and intelligent systems. In a span of two days, the e-commerce giant promises fast delivery by leveraging resources such as:
- +250,000 workers
- At least 50 of its own airplanes
- 300 semi-trucks
- At least 20,000 delivery vans
Understandably, not everyone has access to the same tools, personnel, or technologies Amazon has. Nevertheless, consumers still place identical expectations for fast, accurate shipments on every distributor. Recent surveys show that 60% of modern shoppers are willing to pay more for same-day shipping, creating higher demands for fast, accurate fulfillment. At the same time, they expect 100% accuracy, which becomes difficult when working in a smaller timeframe. To best understand how your operations can mature to meet demands, it is crucial to first identify the traditional challenges of a dynamic supply chain.
4 Defining Traits of the Dynamic Supply Chain
Order fulfillment has come a long way in the last three years. With the rise of e-commerce and the increasing demand for fast and reliable delivery – otherwise known as the Amazon-Effect – businesses have had to adapt and evolve their order fulfillment processes to keep up with customer expectations. Consequently, the modern supply chain is often characterized by:
- Multiple fulfillment avenues – There are many ways to connect consumers to their products. Standard fulfillment, where orders are picked, packed, and shipped within a set timeframe, has evolved to encompass fewer days. Warehouses may also offer same-day or next-day delivery for urgent orders. Both channels are challenged by direct-to-customer shipping, which is preferred by 43% of shoppers. This means distributors must track different delivery addresses and match parcels correctly to prevent loss. New options such as Buy-Online-Pickup-In-Store have also placed a greater strain on supply chains as orders must be tracked in real-time to ensure inventory levels aren’t outdated.
- Close communication within the supply chain – The digital world is ultra-connected, meaning that demand spikes can happen seemingly overnight. Whether it be due to price hikes, pop culture, or inflation, distributors need to maintain open communication channels with manufacturers and retailers to report shortages, which have become increasingly common. As supply chains become ever more globalized, it is only natural new vulnerabilities to foreign tensions may also disrupt efficiency.
- Fluctuating expertise levels within the labor pool
Peak seasons at the end of the year have resulted in an expected influx of seasonal -and often less experienced- workers across the supply chain. Nevertheless, since peak seasons like Prime Day demand greater speed and accuracy from teams, technology providers have now shaped systems to quickly onboard seasonal teams and automate repetitive tasks that would typically expand labor demands. Voice picking is a great example of how warehouses are rapidly adapting to meet different expertise levels with highly-customizable technologies.
- Demand for heightened visibility from consumers
Last but not least, accurate visibility has become both a hallmark and a challenge in the dynamic supply chain. From the consumer perspective, 9 in 10 online shoppers actively track their orders to verify delivery. Moreover, 70% of customers cite package tracking as a top requirement when purchasing anything online. While businesses accommodate multiple fulfillment mechanisms, tracking systems must also display timely updates to the customer. However, consumers aren’t the only ones tracking operations. Government compliance standards demand transparency within tracking systems to ensure codes are met. Failure to meet compliance can result in fees and recalls, halting productivity and impacting the bottom line.
What do Businesses Need to Thrive in the Dynamic Supply Chain
As the supply chain becomes increasingly dynamic, businesses need to evolve to stay competitive. They must be able to identify and respond to changes in the marketplace and the supply chain quickly and efficiently. The ability to quickly adapt to changes in customer demand and market conditions is critical for success. To thrive in the dynamic supply chain, businesses require a combination of:
- Versatile Hardware – It’s heavily agreed among tech players, decision-makers, and solution developers that manual data entry simply can’t keep up with dynamic operations. While there is no one-size-fits-all automation solution, most experts recommend prioritizing versatile technologies to accomplish multiple tasks through one terminal and lower maintenance costs.
- Intelligent Strategy - In addition to technology, businesses must also have a solid strategy in place. This includes a comprehensive understanding of market trends, customer demands, and competitor activity. Businesses must continually analyze data to make informed decisions and adjust their strategy as needed. They must be aware of the various stages involved in the supply chain, from sourcing raw materials to delivering finished products to customers. This understanding will enable businesses to identify potential bottlenecks in the supply chain and take steps to mitigate them. It will also help them to identify opportunities to streamline the supply chain and reduce costs. Finally, strategizing is also key to adjusting systems in order to accommodate demand spikes. Working with a support team during implementation can help you project future scalability for expected peak events.
- Open Supply Chain Communication – In the ultra-connected globalized world, businesses need to have a strong network of suppliers and partners, as they cannot operate in isolation. They need to have strong relationships with suppliers and partners around the world, which is best secured through reliable communication channels that expand beyond the four walls. Flexible connectivity systems leveraging the latest innovations like 5G and WiFi 6 empower businesses to source raw materials and components quickly and efficiently. Flexible communication avenues also strengthen the accurate traceability of finished products to customers since data can be wirelessly shared among the supply chain.
Amazon might have set the standard, but emerging technologies are here to break limitations. By focusing on efficient and effective fulfillment, real-time visibility, sound strategy, agility, and collaboration, businesses can stay competitive and meet the ever-changing needs of their customers. To learn more about how you can thrive in the dynamic supply chain, contact our automation team for a personalized automation assessment.