MOST Analysis

Mission Statement

In general, a supply chain strategy should look at least three years into the organization’s future. However, that does not mean that the organization then will follow that plan for the next three years without changes or modifications. The global environment is far too dynamic to not make corrections to address major significant changes in an organization’s competitive landscape. To define and prioritize new global supply chain capabilities we suggest that the organization forms a cross-functional strategy team, including resources from sales, IT and finance, and organizes a two- or three- day off-site meeting to initiate the process. The off-site meeting starts with a review of the inputs collected so far. This includes customer requirements, internal supply chain assessment, global supply chain trends, competitive analysis, global supply chain technologies, and global supply chain risks. During the review process, a running list of all potential new supply chain capabilities that could be developed needs to be kept. To rank and prioritize the potential supply chain capabilities, the strategy team needs to determine the estimated impact of each new capability on the organization’s supply chain performance indicators (service levels, costs, inventory & working capital, ROI), as well as consider the human and financial resources necessary to implement each supply chain capability. Some organizations also add a “Probability of Delivery” factor to this evaluation matrix to include a factor describing the complexity and risk associated with each potential capability. Once the strategy team has established that the selected new supply chain capabilities will indeed enable the organization to achieve its goals & objectives and are feasible to implement within the given resource constraints, the team needs to establish a detailed project plan for the new supply chain capabilities selected. The overall project plan also needs to identify how the individual projects are interrelated to visualize that some projects with a lower ROI are actually enablers of projects with a significantly higher ROI.

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Objectives

01. The Need for Supply Chain Innovation and Optimization: departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
02. Supply Chain Competitive Analysis: departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
03. Internal Analysis to Understand Supply Chain Deficiencies: departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
04. Internal Evaluation Measures: departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
05. Forming a Cross Functional Team to Analyze Supply Chain Capabilities: departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
06. Understanding Supply Chain Capabilities and Their Impact: departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
07. The Financial Side of Innovation in Supply Chain: departmental SWOT analysis; strategy research & development. 1 Month
08. Global Supply Chain Dynamics: departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
09. Risks and Threats of Supply Chain Innovation: departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
10. Applying the Theory of Constraints to Supply Chain: departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
11. Measuring Progress in Supply Chain: departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
12. Unearthing New Supply Chain Capabilities: departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month

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Strategies

01. The Need for Supply Chain Innovation and Optimization: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
02. Supply Chain Competitive Analysis: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
03. Internal Analysis to Understand Supply Chain Deficiencies: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
04. Internal Evaluation Measures: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
05. Forming a Cross Functional Team to Analyze Supply Chain Capabilities: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
06. Understanding Supply Chain Capabilities and Their Impact: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
07. The Financial Side of Innovation in Supply Chain: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
08. Global Supply Chain Dynamics: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
09. Risks and Threats of Supply Chain Innovation: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
10. Applying the Theory of Constraints to Supply Chain: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
11. Measuring Progress in Supply Chain: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
12. Unearthing New Supply Chain Capabilities: Each individual department head to undertake departmental SWOT analysis; strategy research & development.

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Tasks

01. Create a task on your calendar, to be completed within the next month, to analyze The Need for Supply Chain Innovation and Optimization.
02. Create a task on your calendar, to be completed within the next month, to analyze Supply Chain Competitive Analysis.
03. Create a task on your calendar, to be completed within the next month, to analyze Internal Analysis to Understand Supply Chain Deficiencies.
04. Create a task on your calendar, to be completed within the next month, to analyze Internal Evaluation Measures.
05. Create a task on your calendar, to be completed within the next month, to analyze Forming a Cross Functional Team to Analyze Supply Chain Capabilities.
06. Create a task on your calendar, to be completed within the next month, to analyze Understanding Supply Chain Capabilities and Their Impact.
07. Create a task on your calendar, to be completed within the next month, to analyze The Financial Side of Innovation in Supply Chain.
08. Create a task on your calendar, to be completed within the next month, to analyze Global Supply Chain Dynamics.
09. Create a task on your calendar, to be completed within the next month, to analyze Risks and Threats of Supply Chain Innovation.
10. Create a task on your calendar, to be completed within the next month, to analyze Applying the Theory of Constraints to Supply Chain.
11. Create a task on your calendar, to be completed within the next month, to analyze Measuring Progress in Supply Chain.
12. Create a task on your calendar, to be completed within the next month, to analyze Unearthing New Supply Chain Capabilities.

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Introduction

A supply chain is a network established between an organization and its suppliers to not only procure raw materials but to also produce items and distribute the specific goods to the final buyer in question. Supply chain has always been an area of keen interest to managers and global leaders, partially because of how it relates to the primary areas of business operations – production and selling.

The goal of almost any global supply chain today is to remove hindrances in the path and get the product into the hands of the end consumer. But this is just the basic idea behind it. Every supply chain is built on a set of lasting principles. These principles usually determine the success and authenticity of a supply chain.

A closer look would allow you to tell the differences between a supply chain model that is well thought out and a supply chain design that is brought together without extensive planning or contemplation, for that matter. This is where the idea of supply chain optimization comes into context. Supply chain optimization is about closely connecting the dots in your supply chain and ensuring that all ends are properly connected to one another.

What Is Supply Chain Optimization?

As the term itself suggests, supply chain optimization is the process of making and implementing improvements within your supply chain. These improvements aren’t just made to reduce glitches within the current supply chain, but they also focus on identifying changing market trends and working on them to provide solid output and service standards to customers. Most improvements in the supply chain are centered on raising profits, cutting costs and keeping customers happy where they can.

Your supply chain should be able to give your customers what they want, when they want it and, in the condition and quality they want. The ability to meet the above standards will give organizations the solid foundation set they require for an optimized supply chain globally. The next step in the optimization process is to determine areas where expenses can be cut down or reduced without sacrificing on the quality or standard of goods given to the end customer.

The success of a supply chain is usually measured through its ability to give customers the satisfying experience they require at the lowest cost possible. Customer satisfaction is the end goal, but it shouldn’t come at the cost of heightened expenses and debilitating costs. Organizations look to benefit from the best of both worlds here with reduced expenses and controlled costs.

Supply chain optimization can be achieved by addressing a number of factors, including:

• Physical location/placement of inventory
• Transportation costs
• Distribution tactics
• Manufacturing processes, and so on.

Since there are a number of specific points that organizations should tackle to optimize the design of their supply chain, it makes perfect sense for organizations to identify and follow different approaches for the task.

Local vs. Global Supply Chain Optimization Resources

The supply chain network established by your organization can effortlessly be optimized and bettered in two general methods: local supply chain optimization and global supply chain optimization. Both methods of supply chain optimization deal with firms operating at a global level. Do not be confused by the references to local and global because they aren’t dictated by geographical references per se.

The main difference between both global and international approaches to supply chain management lies in the approaches they follow and the scale and scope of the structure. In this section, we will look into the global and local approaches to supply chain optimization and take a better look at both before we jump into supply chain design among other things.

Local Supply Chain Optimization

Local supply chain optimization is a supply chain process that is focused on specific functions of the supply chain network. The local supply chain optimization process considers supply chain functions in their individuality without considering their impact on other parts of the supply chain.

Looking at steps and ideas of the supply chain in their individuality can generally be befitting to run a profound analysis. The analysis helps unearth specific glitches and mistakes in certain functions, which eventually makes it easier for organizations to not only reduce the problems but also come up with a strategy to minimize the damages caused by that specific function. All functions and steps of a supply chain process play an integral role in influencing the success of the supply chain. With due contemplation and active tracking, organizations can improve specific functions and trigger a domino effect of sorts.

For example, organizations would like to focus on the optimization of distribution processes so that stores always have a steady flow and supply of goods to provide to customers. The delivery process should ideally be spruced up to minimize the chances of late deliveries and to ensure that customers get the products they require at the right time, without any delays whatsoever. Ensuring a speedy delivery process might even mean sending trucks out to stores and different geographical locations, even if they aren’t filled to the core or to their capacity.

This specific process-oriented step might give you a benefit and might put you at a disadvantage as well. On the one hand, you will end up benefiting from the goal you have set for yourself, while on the other hand, this rapid increase can cause costs to increase and become a problem in the long run. Organizations need to keep a stringent check on the cost of distribution as well because, as we mentioned earlier, the primary goals of supply chain optimization also refer to getting the best outcomes possible without a drastic increase in costs.

As we can see from the example above, a localized optimization plan for your supply chain is not the best way or long-term solution moving forward. In fact, looking at things in specific, without the general idea of the impact they have on the supply chain, can halt progress and stall the effort you are putting into the supply chain.

Instead, local supply chain optimization is ideally considered as a way to find errors in individual processes and minimize them where you can. Do not take localized supply chain optimization methods as a sure shot means for improving the overall standard of your supply chain.

Global Supply Chain Optimization

As opposed to the concept of local supply chain optimization, the global approach is a more wholesome strategy that considers almost all components of the supply chain process. The global approach takes innumerable factors into consideration and takes a detailed look at the impact certain changes can have on each area of the supply chain.

The local approach for supply chain optimization falls short when put in comparison to the global approach. Global supply chain optimization is harder than the local process. Imagine the local approach to optimization as juggling one bottle at a time – it is obviously not very easy. The process of global optimization is the equivalent of juggling multiple bottles together; something which is even more difficult than the local equivalent.

Most organizations think of global supply chain optimization as a means to achieve perfection. Trying to keep all your processes performing at near perfect speeds can be unlikely. However, the optimization process is about finding the perfect balance between all areas of your supply chain. This can help your supply chain become more congruent and result-oriented.

The goals for both these approaches are the same – to cut costs, keep customers happy and raise profits in the long run. However, since organizations are more excited by the prospects of an across-the-board supply chain strategy than a restricted localized one, they prefer the benefits of global supply chain optimization over local.

Additionally, during the process of optimization, organizations should make sure that the savings made through the optimization process, either in the form of efficiency or reduced costs, should be more than the additional expenses incurred. The optimization is only justified when the above is the case.

Though global and local optimization might sound a bit intimidating to firms, there are certain techniques that can help organizations through this process. We look at these techniques in our next section.

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Supply Chain Optimization Techniques

Briefly speaking, supply chain optimization is broken down into the following techniques:

1. Staying ahead of changes
2. Sticking to your strengths
3. Strengthening collaboration
4. Saving time & using technology
5. Searching for ways to improve

We study these techniques in greater detail below:

Staying Ahead of Changes

Having a supply chain model or design that is currently performing alright is not an indication of future success. The success or satisfactory results you’re enjoying currently will definitely not last forever, and there will come a time when you will have to innovate or predict the upcoming market trends and changes to remain in touch with them. Businesses need to stay aware of changes in the market to keep their work processes well tuned and to work optimally toward success in the supply chain.

To help you in this direction, POS systems can help keep an eye on your supply chain’s ability to handle volatile periods of demand from the market. The data generated through the POS systems can be used to predict future changes, and to also make your supply chain better than it is currently. Staying prepared for the future will help you achieve better results and will satisfy your customers without the need for you to extend your budget beyond what you can easily bear.

Sticking to Strengths

Today, all organizations and managers like to believe that they can handle things on their own, without help from other partners. After all, this is the guiding principle for organizations today. If you want things done right, you should probably get them done yourself, without trusting anyone else. However, this principle does not hold true in the supply chain and business world of today.

Even if you’re able to ace every step of your organization on your own, chances are that you will underperform somewhere in some process. This is where outsourcing comes to the rescue. There is no shame in outsourcing – in fact, the external help you get from outsourcing can help you complete tasks that are foreign to you and your team.

Organizations need to realize the importance of their core functions and focus on the strengths that they are good at. Being a jack of all trades has its limitations and can impede progress in the long run. Eventually, when it comes to your supply chain network, it is necessary for you to focus on the strength and see where outsourced help from third party vendors can fit in. Obviously, organizations should adhere to their due diligence standards and find vendors based on stringent measures to avoid being duped by unreliable vendors.

The use of reliable vendors to outsource supply chain tasks can help you cut down on costs and prioritize the most important areas of business. These are areas where you feel some ground work can be done to improve performance.

Strengthening Collaboration

Collaboration is a core component of your global supply chain and should be prioritized during your supply chain optimization process. Integrating your manufacturing processes with the delivery schedules of your suppliers can significantly help improve the control of inventory and can also ensure that the results you derive are more efficient and optimized.

Additionally, organizations can also improve their delivery patterns by studying and cross-referencing data from their end retailers. This data can help predict demand and can allow you to keep up with the pace of what customers expect.

With the power of collaboration tools and automated solutions in the supply chain today, the mountains of data available here can easily be deciphered. Ultimately, the interconnectedness between areas of your supply chain is bound to improve optimization and help each stakeholder remain in touch with the other.

Saving Time through Technology

We have already mentioned the importance of technology in the techniques above, and believe it is something that can actually help actualize results. You can incorporate supply chain management software operations here along with the data available across the supply chain ecosystem to derive sense out of different processes and data sets.

Customer experience can also be significantly improved through the use of technology. Customer feedback can be recorded and later be worked on to give customers the perfect experience, without the minor problem of gaps in communication.

POS technology can be grouped together with touch systems to give employees the ability to focus on efficiency and to better predict demand curves.

The list of technological advancements is endless, with the bottom line being just how significant it can be for organizations to use tech solutions for supply chain optimization.

Continuous Improvement

Supply chain optimization is a continuous improvement process that is achieved through consistent efforts and hard work. Organizations should remember not to become complacent with the status quo surrounding them. Suppliers and manufacturers shouldn’t be blindly trusted, and feedback from customers and other stakeholders should be taken seriously. There is always room for improvement, which organizations can follow to enhance their supply chain optimization.

Be sure to review the coordination between stakeholders from time to time. Enhanced collaboration can help achieve better results and lead you to the path to glory. Additionally, there is always room for improvement in supply chain practices. Supply chain processes should also be continually assessed and aligned together for the best results.

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Step by Step Process for Supply Chain Optimization

The steps to build an optimized supply chain include:

Establishing a Supply Chain Council

The success of your supply chain is heavily dependent on the supply chain team you have in place within your organization. The leadership in place will not only determine the pace at which you proceed, but will also steer your supply chain in the right direction. Without the right individuals present to guide your supply chain forward, your organization would keep repeating the same mistakes and land itself in hot waters. Having a supply chain council can be the guiding light you need right now. Additionally, the objectives of all upper and lower-level employees can be aligned to ensure everyone is on the same page. This will allow your supply chain to work in synchronization with the rest of the business.

Syncing with Different Supplier Tiers

Suppliers are broken down into different tiers. Obviously, you source your products or raw materials from a supplier. Now, in most cases, the supplier you’re dealing with is also sourcing their goods from some other supplier. Sometimes they are dealing with raw materials, while other times, they have service providers offering them specialized services. The suppliers to your suppliers are known as tier 2 suppliers, and knowing more about them can be handy for your business. Additionally, if you feel that tier suppliers cannot be trusted, communicate this to your current supplier and explain the trickle-down effect to them. The poor performance of their suppliers will eventually reflect in your performance.

Streamlining Processes

Just having working processes is not enough if you want your organization to achieve a supply chain optimization model for the long run. Whenever you zoom in to the smaller details of your supply chain network, you will find that certain processes require straightening or are just not in the position you want them to be in.

Strengthening Supplier Relationships

Good supply chain optimization is not possible without strengthening relationships with suppliers and keeping them on board with your decisions. A healthy relationship with your suppliers can allow communication to flow both ways and can lead to some amazing results. A healthy supplier relationship includes setting goals, deciding on the right process to reach those goals and agreeing on the assessment methods in place. There should also be an established and proven message to manage the discrepancies in your relationships.

Considering Cost of Ownership

Business owners often make the big mistake of limiting their inference and investigation of a supplier to the cost that they provide. Only considering the price provided by a supplier and limiting all other factors is a mistake because prices are never an honest indication of what you will actually end up spending on their services.

The total cost of ownership, or TCO, is more than just the upfront cost of services and supplies and also includes the potential costs of transportation, warehousing and other related operational costs. Keeping a healthy relationship with your suppliers allows you to effectively calculate TCO and reduce expenses where it is possible for you to do so.

Cutting Inventory Levels

A popular business saying suggests ‘there’s no such thing as too much inventory’. Well, this saying does not hold true in the efficient and optimized supply chain environment of today. Keeping additional amounts of inventory can cost your business a significant amount of money. Think of all the excess space and storage you will need to keep your additional inventory. Inventory storage costs should be minimized for better management. Then, there are additional costs such as wastages and other expired goods due to excess holding periods. Additionally, inventory can also hide problems that your suppliers and supply chain partners are guilty of committing. These problems suddenly emerge when there is an inventory shortage, and you realize just how inefficient your services are.

Planning for Demand

Having a simple idea of how the future will impact demand for your product can prove to be beneficial in the long run. Demand planning is an important part of running a business today and gives organizations an idea of the demand levels they should plan for. If you’re dealing in multiple products, you don’t want too much of a popular item. Additionally, you also don’t want to be shorthanded when more orders come for a popular product. Customer requests should never be rejected. A rejected customer is a possible avenue lost for your business.

Supply chain organizations can benefit from opening new doors and unearthing new opportunities for innovation and optimization. Optimization is the call of the hour today and supply chains and organizations can benefit from enhanced results.

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Using Supply Chain Planning to Drive Competitive Advantage

Market research firm Gartner recently mentioned as part of a study, “Supply chain planning (SCP) is the forward-looking process of coordinating assets to optimize the delivery of goods, services and information from supplier to customer, balancing supply and demand.”

Supply Chain Planning or SCP covers every stakeholder from the second or third tier suppliers to the end customers. Once the stakeholders are understood, an optimized plan is created to cohesively improve the company’s production, sales and other operations. These steps ensure efficiency and cost effectiveness in the supply chain for a lasting period.

Efficiency in supply chain planning is bound to achieve three goals: increased sales, lower production costs and better supplier relationships. Companies like Dell and Walmart used the supply chain to good effect in the 80s to build their competitive advantage, and the same is being done by behemoths like Unilever and P&G today.

In this section, we mention some ways for you to leverage supply chain planning as a tool to achieve a competitive advantage in the market.

Engage in Real Time Supply Chain Planning

The current global COVID-19 pandemic has shown businesses just how the landscape surrounding them can change and shift in a very short time. How a business handles these quick shifts in the market will determine its flexibility and longevity in the industry.

Supply chain analytics solutions allow managers and leaders the ability to view real time data from every part of the business. From POS terminals in the supply chains and from the mines where suppliers extract raw materials, companies can gather data from all sources of their supply. Companies can use this large volume of contextual data to forecast shifts in the supply chain and determine changes in the market. These rapidly changing market demands will help organizations understand what is required of them in the moment and how they should go about it.

A change in demand expectations should be reflected in the requirements businesses have from suppliers. A look at these different sources of data and the analytics derived from them will give organizations a chance to create changing business parameters and implement new requirements.

Develop a Collaborative Supply Chain Strategy

Most large businesses have an expansive list of vendors, distributors and suppliers. These stakeholders usually work in silos, without any form of coordination between each other. All these partners should work in a collaborative environment to maximize the value of the supply chain and minimize discrepancies in the process. Communication is necessary for supply chains operating at a global level, where suppliers, manufacturers and customers are spread across the globe rather than being saturated and present in one area.

Additionally, developing a collaborative supply chain strategy that includes input from all stakeholders can offer good news for all stakeholders as well. The success of a company usually trickles down to all other stakeholders in the supply chain process. Suppliers get to benefit from the success of the company they’re providing goods to, as they eventually develop a positive rapport and can use the success of the company as a representation of their standards.

Building and maintaining strong relationships with suppliers is just as important as maintaining relationships with customers. Just like an organization needs to satisfy all customers, it also needs to ensure the trust and reliability of its suppliers. As such, an effective supply chain management strategy wishing to achieve competitive advantage for the organization should prioritize stakeholder communication across the board.

Additionally, including input from the stakeholders in your supply chain can also help generate a lot of positive ideas and clear out delays in the current supply chain process. Your suppliers probably know more about the intricate details of different industries than you do. Obviously, keeping their experience in mind, it is a given fact that they will be able to guide you better in specific industry related matters than you would be able to handle yourself. Hence, the positive rapport built through stakeholder relationships here will definitely help you achieve the competitive advantage you want to achieve.

Supplier relationships and other communication between stakeholders can be improved through the use of technological advances that give organizations a chance to remain in touch with all stakeholders at a given time. The advancements in technology have meant that video conferencing and other tools can bridge the geographical gap and give organizations a chance to develop a positive relationship without any hindrances whatsoever.

Adopt Automated Solutions

Back in 2019, a report released by McKinsey international reported on the user confidence in AI adoption in the supply chain. Artificial Intelligence has opened the doors to multiple avenues and made global supply chains more progressive than ever. This improvement has surely not gone unnoticed and has given organizations a chance to better their services and stand on the same pedestal as their competition.

Respondents for the survey conducted by McKinsey were asked to give answers to 33 uses of AI across different functions in the organizations, and the impact they would have on the costs and revenues of the organization as a whole. In the conclusion of the report McKinsey stated, “Aggregating across all of the use cases, 63 percent of respondents report revenue increases from AI adoption in the business units where their companies use AI, with respondents from high performers nearly three times likelier than those from other companies to report revenue gains of more than 10 percent.”

In supply chain management related questions, 14 percent of all respondents reported a cost decrease of 20 percent or more through the adoption of AI and other automated services. 16 percent of all respondents saw cost decreases between 10 and 19 percent, while over 30 percent of firms saw a decrease of 10 percent or less. As far as revenues were considered, 13 percent of all organizations surveyed as part of the project reported that the revenue increase due to AI adoption was over 10 percent, while 22 percent saw an increase between 6 and 10 percent, and 28 percent of the organizations saw a revenue increase of 5 percent or less.

The basic results from the survey reported that over 44 percent of all respondents realized amazing cost savings in all business units where AI technology was deployed. AI implementation had reduced cost savings by over 10 percent for most firms.

“The two functions in which the largest shares of respondents report cost decreases in individual AI use cases are manufacturing and supply-chain management. In manufacturing, responses suggest some of the most significant savings come from optimizing yield, energy, and throughput,” McKinsey explains. “In supply-chain management, respondents are most likely to report savings from spend analytics and logistics-network optimization.”

A number of automation solutions are now part of the supply chain and delivery industry. Automated solutions like collaborative robots reduce errors in the manufacturing process and decrease the time it takes organizations to fulfill orders and reduce waiting times. These benefits and automated solutions allow workers inside a firm to work more efficiently and get more work done in as less time as possible.

Implement Agile Processes

Implementing disruptive and innovative technologies can prove to be a major source of progress for the supply chain. However, just as the name itself suggests, these improvements are disruptive and can prove to be costly at times. When working with innovative solutions and disruptive management styles, it is best to implement agile process improvements because of their ability to seek and uncover incremental improvements in the process.

The full impact of implementing the agile process will not be experienced by organizations on the first day of implementation. Over the period of time, small and incremental changes and efforts work together to signal major improvements in the processes.

The benefits of the agile processes and mentalities will be felt in the form of lower costs and minimized disruptions as a result of market changes and other trends. Since employees are tasked with spearheading the process and leading the change forward, they take greater interest in the process and are more likely to accept the change brought as a result of it, rather than show resistance to it.

To obtain maximum value out of your supply chain, it is necessary for you to be aware of supply chain cost drivers and the impact they have on your business. Increasing costs in the supply chain are usually telltale signs of problematic cost drivers. Organizations looking to create a cost-effective and robust solution should address the root causes here rather than the symptoms that appear on the surface.

For instance, the labor costs in a warehouse might be drastically rising, but this might just be a symptom or a sign of another problem such as below par pick paths and picking errors in general. Replacing the current lot of employees with new unskilled labor will put you at a disadvantage without even considering treating the root cause that led to the situation. Once you understand the root cause behind the high labor rates, you can take measures to improve picking accuracy and reduce the unnecessary work involved. This will effectively address the root cause without any additional problems.

Short-term cost savings should never be attained by sacrificing your long term growth goals. Technologies like warehouse automation and others powered by AI can help improve services and give a smart return on investments.

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Supply Chain Analytics to Help Improve Competition

Most organizations today use some form of supply chain software to manage logistics and procurement in the supply chain. But when