Sydney has endured some really strange weather this summer, and I am sure there will be more surprises to come. One day we are sweltering above 40 C, the next it feels like I should be grabbing a jacket.
At lunch time in North Sydney, you can easily spot the effect the extreme heat has on local businesses. Office workers suddenly make a beeline for air-conditioned cafes, and the number of electric fans being sold is astounding.
Customer demand can obviously shift very suddenly, and while the causes may seem obvious with hindsight, it doesn’t necessarily make it easy to profit from the next spike in demand. The businesses who do best seem to be the ones who plan ahead, and have built their systems to adapt to shifts in customer needs.
Last year, Gartner published a free report rating the supply chain performance of large global companies. Not surprisingly, the top 25 was dominated by global brands that touch most people’s everyday lives – including PepsiCo, Nike, Colgate-Palmolive, Unilever, McDonald’s, and Amazon.com.
To a very real extent, these companies have set price and product deliverability expectations, and every business needs to compete for customers who now think that items should always be in-stock, and delivered the next day.
The “I want it, and I want it now” expectation is driving changes in purchasing behaviour by both consumers and businesses. Manufacturers who decide to sell directly via online stores are also disrupting and disintermediating distribution channels, which means retailers/channel need to offer customers real added value and timely delivery.
Fortunately, supply chain technologies have undergone a price revolution over the last 10 years, and most businesses can now afford to implement perpetual inventory systems, with real time barcode, RFID, and GPS tracking systems. Integrated ERP systems linking lead to sales to order to despatch are affordable and are effectively table stakes in today’s global supply chain world. The very systems used by the big global brands to run their supply chain empires.
In most cases, implementing these technologies can speed up the flow of both goods and information. This reduces the amount of capital tied up in inventory, while improving business visibility and efficiency. Instead of manually deciding what inventory to order, automated demand planning tools can make recommendations to your team, which they simply approve (or adjust) – freeing them up to find and eliminate costs and bottlenecks in your supply chain.