Tag Archives: marketplace

Why decision intelligence is essential for overcoming supply chain constraints

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The current supply chain disruption is one of the many types of crises the marketplace has faced over the years. Even before COVID-induced challenges had cargo ships anchored off of ports across the globe and store shelves barely stocked, supply chain leaders have been in a race to keep up with changing consumer demands, a shifting competitive landscape, and technological advances.

Yet, as the development, reach and success of businesses has become highly dependent on tightly linked supply chains, the structure of those connections has become increasingly fragile and intricately connected.

Over the last two years, an unprecedented supply chain crisis has unfolded. With networks spanning multiple continents, global supply chains have broken down. From COVID-19 and the war in Ukraine to a sideways freighter that blocked the Suez Canal for a week and a growing list of environmental disasters, the upheaval has created a new benchmark for business-as-usual. A survey from the UK Office for National Statistics showed that 40% of businesses in the wholesale and retail trade industry reported global supply chain disruptions at the end of the first quarter this year.

This disruption is closely tied to a failure of foresight and planning built into supply chain systems.

Asking the right questions

Many companies tackling supply chain disruption see themselves as “data-driven,” when in fact, most are not. A Gartner report shows that less than half of organizations have actively started to build a roadmap for supply chain digitization transformation, despite it being a key priority for most leaders. Another survey showed only two-thirds of supply chain organizations felt the strategy and execution of their supply chains were well aligned.

Business intelligence (BI) and analysis tools were the promised future, where business users could easily access and transform huge volumes of corporate-wide data to predict business outcomes and future demand. However, the reality is that traditional BI solutions and ERP systems are static and can only provide a snapshot of the present or past.

Decision intelligence rests on prescriptive analytics

Such foresight comes from adding a prescriptive analytics layer to a firm’s supply chain management. This layer answers the question “what should happen” and becomes the basis for generating decisions, not just insights. This approach elevates the level of analytic inquiry, using machine learning and optimization models to propose a course of action based on data, analytics and business models.

Ultimately, this can dramatically transform how companies manage the flow of goods throughout their supply chains because it resolves the question how to proceed to achieve the targeted outcome.

Decision intelligence and the future of the supply chain

Taking a new approach to supply chains relies on a new vision for data in an organization. Data is the engine of growth and the source of intelligence that will allow businesses to get a grip on their supply chains.

This means drawing on data from a wider variety of sources than ever before. Businesses need more actionable, real-time data from across their supply chains. They need to quickly and securely access multiple data sources across on-premises data centers and multiple clouds. To plan for future shocks, businesses need to learn from this historic moment and feed this information into predictive and prescriptive analytics modeling.

A new tomorrow

Supply chain management solutions based on decision intelligence and real-time prescriptive analytics models are potent instruments in the fight against the supply chain crisis. Such systems can improve overall processes throughout the enterprise and build resilience into demand forecasts. They can reduce costs associated with overstocking, inventory stockouts, and product obsolescence — even in the face of widespread crises.

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Four Steps to Building a Global Chain Risk Management Platform

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Be proactive – and significantly reduce global supply chain risks, discover the 4 steps to building a global supply chain risk management platform in a white paper from Avetta.

A global marketplace presents a complex set of challenges, especially when attempting to maintain a safe and sustainable working environment for your employees, contractors, and suppliers.

A minor detail, if left unresolved on the front end, can explode into a financial or operational disaster.

But the implementation of a world-class risk mitigation solution can save time, money, and even lives.

It’s critical to have the plans, resources, and technology in place that verify credentials, measure financial stability, and encourage sustainable business practices.

A proven supply chain risk management partner can ensure that your program is configured efficiently, intuitively, and effectively.

Save your business from negative impacts to its revenue and reputation by taking the right steps to minimize global supply chain risks.

In this white paper from Avetta, you’ll learn the keys to successfully managing your supply chain, protecting it against avoidable situations, and recovering from unforeseen disasters.

Find out how to better equip your business to prevent:

  1. Incidents caused by under-qualified or untrustworthy contractors or suppliers
  2. Injury to employees, contractors, suppliers – and the obligation of medical expenses associated with them
  3. Direct costs such as damaged goods and materials, machinery repair, and insurance deductibles
  4. Indirect costs including revenue loss from brand damage, employee and supplier down time, production delays, and fines

Read more at Four Steps to Building a Global Chain Risk Management Platform

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Google and Wal-Mart team up to combat Amazon in retail supply chain shake-up

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Google has teamed up with Wal-Mart in its biggest even retail partnership to challenge Amazon in the online shopping marketplace and combat the proliferation of its Alexa-powered Echo device as a means of facilitating voice shopping.

The move is expected to have a significant impact on the retail supply chain within the United States as well offering customers a whole new way of purchasing goods.

As Forbes analyst Kevin O’Marah puts it: “It signals an acceleration in the shift from store-based retail supply chains to a hyper-personalised, smart consumer supply chain.

“The dynamics of this new supply chain will be brutal for consumer brands accustomed to shelf-centric demand.”

The new partnership marks the first time that world’s largest retailer is offering products outwith its own website in the US. It announced this week that it’s going to offer a huge array of items through Google’s online shopping platform, Google Express, and eventually through its virtual assistant, Google Home.

Wal-Mart is hoping that it can integrate its large network of stores with its digital business thanks to the new partnership.

Read more at Google and Wal-Mart team up to combat Amazon in retail supply chain shake-up

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What’s Behind the Inventory Crisis of 2016?

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The last time the inventory-to-sales ratio was this high was 2009, when we were in the throes of the Great Recession – people lost jobs, businesses closed, nobody was spending, nobody was growing.

What does it mean that inventory levels are this high in 2016? Are consumers not spending? Are we headed for another recession? Or are other forces at work?

Well, in April the Bureau of Economic Analysis reported that consumer spending experienced its biggest gain in six years. And while JPMorgan recently reported an increased probability of a recession in the next 12 months, no one’s sounding the alarm bells quite yet. Besides, inventory levels have been high since last fall.

So what else could be at work?

The Marketplace

Traditionally, a drop in consumer demand would cause a short-term build-up of inventory. But businesses would eventually compensate by cutting orders and manufacturers would produce less. But as we’ve seen, demand isn’t going down. And yet, inventory isn’t moving. Why?

One major culprit is the way consumers shop. Their expectations have changed. This is the age of Amazon Prime, Instacart, Uber and Lyft. Free shipping. In-store pick-up. 1-hour delivery. Easy exchanges and returns. Above all – convenience. If it isn’t convenient for a customer to buy something they want, they won’t buy it – or they’ll buy it somewhere else. Fulfillment has usurped the throne of customer satisfaction.

Traditional retailers have struggled because of this. As young, tech-driven start-ups bite into market with the luxury of fresh starts, traditional retailers have tried to stay competitive. One common tactic has been to keep buffer inventory on hand. Out-of-stock inventory kills customer loyalty. Not being able to fulfill quickly kills customer loyalty. But having lots of inventory doesn’t equate to efficient fulfillment. That requires having a modern, flexible supply chain. Without agility, retailers often lack the competence to satisfy customer demand, let alone fulfilling profitably.

Read more at  What’s Behind the Inventory Crisis of 2016?

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Managing the Risks of Multinational Supply Chains

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Managing supply chain risks is critical to the success of any business.

Although, the importance of supply chain risk management is perhaps most clear in Asia Pacific with its high growth rate, shifting industry trends, increasingly sophisticated consumers and expanding businesses.

An Overview

With these marketplace dynamics comes greater interconnectivity of multinational risks. According to the World Trade Organisation (WTO), Asia Pacific includes nine of the world’s top 15 countries importing and exporting intermediate goods.

Companies in the region depend upon goods and services from companies in other countries in order to successfully operate their businesses, and vice versa. As the region becomes more interconnected and trade flows continue to increase, protecting valuable supply chains from both existing and new risks becomes critical to the success of companies based there.

However, managing these risks can be challenging. Today’s supply chains are becoming deeper and spread over more countries. Knowing exactly what, where and how connections can impact a company’s business can be difficult.

It is not uncommon for companies to have supply chains that go down several layers, beginning with one supplier or distributor which is dependent upon a second, which in turn depends upon a third and so on. A problem at any of these levels has the potential to disrupt a company’s business operations.

As a colleague of mine once explained: “You are only as good as your weakest link.” So it is important to have clear line of sight to all of the links in a company’s supply chain. Typically, issues such as quality control and incomplete or late delivery are top of mind when considering problems with the potential to disrupt a supply chain. There is another risk that is often underestimated, but can be equally as damaging – financial failure.

Read more at Managing the Risks of Multinational Supply Chains

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