In today’s competitive environment, Australian consumer goods companies must change their supply chain management to ensure they exceed consumer expectations, integrate with their supplier network, and use data and analytics capabilities to gain deep insights into their business.
Essential to the success of any consumer goods business is the effectiveness of its supply chain. However, for many companies, legacy technology and processes mean a more human or manual intervention is needed. This, pooled with low visibility over inventory levels, product location and movement, can impact profitability.
With the impending launch of a major logistics company into Australia – which is renowned for its vast product range, delivery efficiency and speed – customer expectations of service are set to further increase.
Consumer goods organisations must step up their agility to remain competitive.
Meeting expectations and keeping consumers informed should be at the forefront of any customer goods business strategy, the emphasis must be on doing things smarter, better and more efficiently.
The time is set for Australian vendors to review their supply chain management (SCM) to ensure they are equipped for this new environment. If the advances in supply chain process design and information systems expand, the scope to improve is vast.
Importance of System integration
Australian consumer goods organisations have sophisticated supply chains, and improvement measures are not always simple if legacy technology is involved. Many supply chain management challenges trunk from inadequate, outdated and unintegrated technology systems.
Modern supply chain management is a matter of the customer having the right product at the right time to satisfy demand, to achieve this, the organisation need efficient warehouse processing, goods shipping, inventory picking accuracy and dispatch.Traditional systems may not integrate well with suppliers’ and customers’ systems.
A lot of companies will not deal with a customer or supplier unless they are using electronic data interchange. The other point to make is it is not much help having sales reps on the road if they cannot access the information necessary to answer customer queries with their mobile device.
Supplier collaboration
A more sophisticated supply chain system can enable greater collaboration between suppliers, consumers and other relevant entities.When companies have their supply chain integrated into their vendor’s system, with visibility of stock and orders to give them timely updates on delivery and pricing changes, this streamlines the process and takes away manual involvement.
Morshona has worked with some companies to help integrate their supply chain management integration system with suppliers and customers, using for instance Microsoft Dynamics 365. This technology not only improved efficiency of supply chain management integration, it also replaced their disintegrated legacy systems and enabled integration, delivering efficiencies through timely and accurate business perceptions.
Opportunities for improvement in demand forecasting, planning and procurement are always there for companies with modern supply chain management that can execute global procurement strategies – an area many Australian companies have not really embraced yet.
Commercial integration
As Australian consumer goods organisations increase their geographical reach engagements, the integration of financial systems is also very important.On the base of any supply chain is financials. Supply chain management can help improve services levels and lower the cost of doing business.
For example systems like Microsoft Dynamics 365 helps organisations to perfectly integrate their supply chain information with their financial information, and facilitate different structured companies and geo-space statutory reporting. With better insights into how finances and supply chains work together, businesses can determine a ‘cost to serve’, which analyses product, supplier and customer profitability.
With this information usually taking months to take months to generate, but with cutting edge technology it enables data to be refreshed on a prompt basis. This would enable the company to scale down on the cost to serve meaning the organisation can segment consumers, determine the most important ones and offer them the most profitable products.
Organisation intelligence improvement
Scaling up supply chain management to connect to financial information is one benefit, nonetheless there are many other areas of a company where effective supply chain management can assist.In addition, there needs to be adequate emphasis on data and analytics, otherwise the company will have a system with data, but not using it to its full advantage.
To put this to a live example, it is more like how big data can help organisations be predictive and proactive to get better outcomes when sourcing product from Asia-pacific region, by using big data the company might know exactly what the weather will be like on the voyage, and the status of the receiving port. The organisation can ask, what actions are available to prevent delays? Should the vessel be re-routed, or the delivery expedited via air freight?
Drones and IoT are the future
In Australia, new technology is steadily making its way into the world’s supply chains, from driverless trucks to drone technology and the Internet of Things (IoT). Though, these will take time to develop and be used in everyday operations.
In 20 years we will see self-driving vehicles used in certain applications. Even today, automated, guided vehicles can be used to deliver linen to various sections of hotels and hospitals. Although autonomous drones as a consistent delivery method are still in the future, they can currently be used to inspect supply chain equipment, such as a conveyer belt and to assist with problem solving and maintenance.
The supply chain management industry has adopt a form of IoT – radio frequency identification (RFID) – but the cost is dear for most companies. IoT is almost an advancement, where commonly accessible data can be used to make decisions or report information on, or with, the product.
Companies will use a combination of RFID, barcodes and IoT. In food distribution where fresh produce is being transported over long distances, RFID can monitor the shipment temperature during the journey.
Transform with seamless expertise
Australian consumer goods organisations can make available technology that will enhance their supply chain systems with cloud-based technology such as Microsoft Dynamics 365. However, to get the most successful transformation, the company should be backed by a breadth of expertise. Companies need to implement it with consumer goods industry expertise, so companies can work on the processes, not just the product.
Expertise in change management strategy is also crucial, to ensure the process change comes first, and the technology complements the approach. Changing an organisation is a combination of process, technology and metrics. Most organisations can be optimised before implementing a technology.
Morshona and ICT Solutions
Morshona partnership with some ICT solutions enables clients to have access to SCM technology and the deep expertise of our teams, who can help to build a transformation strategy and implement the technology.
For more information on supply chain management, talk to Morshona’s supply chain Advisory team.
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