Demand-driven-retail-supply-chains-need-automated-wholesale-routing

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A new wave of automation in manufacturing and compressing spreads in labor cost arbitrage opportunities are encouraging importers to on-shore or near-shore more of their supply chains. At the same time, lean practices, tight industrial real estate markets, and intensifying e-commerce activity have shifted the perception of supply chain outperformance from a cost center to a competitive differentiator.

These changes require retail brands and their wholesale customers to develop more flexible and responsive supply chains. One metric key to successfully navigating this transformation will be the velocity of information flows from the end customer upstream through the retailer and back to the supplier.

End-to-end freight visibility is an obvious precondition for speeding the flow of information pushed to all partners in a value chain, but that level of technology is only now being adopted by the majority of shippers, third-party logistics providers, and transportation companies in the space.

“For 78% of participating [consumer packaged goods] companies, end-to-end data visibility—from point-of-sale data to GPS tracking data on shipments—is a priority. Although they are accumulating more, and more valuable, data, most companies lack the tools and systems to analyze it and apply insights from it,” wrote Boston Consulting Group in reference to its 2018 survey of more than thirty leading CPG companies.

“Effective [demand-driven supply chains] leverage network-based models that allow all participants to work as one virtual organization. They are also effective collaborators as they share big data across the network and respond quickly to changing customer demand signals,” KPMG wrote.

“Heavily automated, fully integrated demand and supply planning breaks traditional boundaries between the different planning steps and transforms planning into a flexible, continuous process,” wrote McKinsey analysts Knut Alicke, Daniel Rexhausen, and Andreas Seyfert in a recent report titled “Supply Chain 4.0 in consumer goods.”

“With advanced system support, 80 to 90 percent of all planning tasks can be automated and still ensure better quality compared with tasks conducted manually,” McKinsey concluded. 

 

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