Creating Value From Supply Chains with Effective Management

The information captured from a range of sources helps businesses take a holistic approach to their operations that can minimize risk and increase visibility. This is the strategy that a global fishery is using as it redesigns its supply chain systems. Computer World reported that Marine Harvest is targeting its distribution network to improve pricing and traceability of products.

The seafood producer hopes that the changes will drive growth by increasing visibility into demand for its products. Identifying long-term trends and shifts within the seafood industry would increase the accuracy of forecasting, letting the company plan supply chain activity up to three years in advance. This reduces the chance of shortages that could limit sales, and helps mitigate risk. Marine Harvest may soon be able to leverage information from its distribution network to manage everything from marketing to pricing.

Using data management effectively
Data analysis tools and cloud computing have helped supply chains become more integrated with the rest of an organization, ZDNet reported. Big data tools give businesses the ability to not only adjust shipments, but to change marketing strategies, grow demand and increase revenue.

“When we talk about the networked economy, business networks, and connected commerce we’re really taking that to a whole other level, where as marketers, we’re able to hyper-target, our potential customers not just on their demographics, but also be able to predict when they’re going to be ready to buy,” Rachel Spasser, senior vice president of marketing at Ariba, told the source.

Understanding customer behavior is an important factor in inventory management. Accurately predicting how specific audiences will react to various elements ensures that there are sufficient products on hand for sales. By collecting information from a variety of sources, companies can make appropriate adjustments to their shipping strategies.
Internal as well as external

In addition to having sufficient products available, businesses are able to streamline their operations by incorporating big data strategies into their supply chains. Tracking movement of goods can identify bottlenecks and other weaknesses that could contribute to delays in deliveries. Resolving these problems could lead to faster delivery times and fewer damaged items. However, these improvements can only be made if every part of an organization is focused on obtaining a shared goal.

Supply Chain Digital stated that successful logistics management starts with providing a vision to employees. When every part of an organization is committed to making a product launch successful, it is easy to accomplish this goal. Empowering workers to find savings or identify opportunities simplifies the process of creating value from supply chains, which requires organizations to share data collected with everyone throughout the company.

Fortunately, technology is making this undertaking easier. Warehouse management systems centralize inventory data to provide additional control over logistics. The data collected in these platforms can be opened to various departments to increase the integration of information into creative new strategies.

Addressing reverse logistics to create value
Most companies could benefit from improving their reverse logistics practices. E-commerce continues to grow in popularity, but the channel is also responsible for a significant number of returns. Consumers are willing to purchase multiple items online with the intent of exchanging them at local stores if they don’t meet expectations. The change in channel could be difficult for businesses to deal with unless they take a broader approach to inventory management.

Orders within each sales channel are managed through the warehouse management system, increasing visibility across the company. Marketing efforts could be created to drive sales from mobile or digital platforms as a way to increase customer satisfaction.

Returns are a big factor in client satisfaction. Patrons want a hassle-free experience regardless of what channel they use, which is where reverse logistics comes in. When leveraging reverse logistics, the process of reclaiming the products and either getting them ready for resale or clearing them from inventory, businesses should not forget to look at packaging materials. For instance, Handy Shipping Guide reported that IKEA was able to save €140 million by switching to a compressed card pallet. The material was 10 percent lighter than the traditional wood pallet and was easily recycled. The resulting savings helped the company boost its financial performance.

Data analysis can help businesses identify areas where spending could be cut by increasing their understanding of various factors. IKEA knew that lighter packaging material would result in lower transportation costs and its strong leadership empowered employees to seek a solution. With the appropriate tools, companies could accurately predict the return on investment for various projects. The insights can be used to align practices within various departments to maximize the value of supply chains.