DEAN World Cargo chief commercial officer Hanney Seylim talks supply chain agility.
In stable market conditions, supply chains can implement highly standardised and harmonised processes.
This robust supply chain design is usually associated with the highly desirable economies of scale, reliability, and sound forecasting ability.
Unfortunately, as history shows, such stable market conditions are not long lived.
It’s evident that market instability is the current dominant condition, as recent global events have taught us all.
Organisations that have designed their supply chain based on predictable algorithms, mastering the art and science of procurement, manufacturing, and delivery, are now faced with continuously turbulent and unpredictable variables, due the current pandemic.
Supply Chain Agility is no longer a new concept.
It’s the perfect response to such changing market conditions, however it does not come cheap.
While an agile supply chain achieves high flexibility, rolling with the punches of the raging market conditions, it is also associated with the side effects of increased supply chain complexity, increased costs, and increased pressure on the organisation’s staff, due to the extreme demands of high customisation.
We have found that fashion and retail organisations which are set up to dispatch their cargo to a consolidation point in Australia, so that their orders can be stored and then distributed, were at clear disadvantage in terms of lead time and market responsiveness.
As a response, we have managed to re-engineer the very extensive supply chains of a reputable fashion and retail organisations to the more agile 'direct-to-store' model.
This model can achieve up to 30% improvement on speed to market, less stock held up in storage, and up 25% less of internal personnel resources often taken up by extensive supply chain planning, due to the mitigation of system integrations duplication of data, enabling our clients to redeploy staff with the enhanced efficiencies gained through the project.
Despite the obvious benefits of agility, organisations that operate in complex environments such as international markets, face challenges in implementing the measures necessary to increase their agility.
These challenges stem from the expense associated with the complex operations and management structures necessary to support the desired end results.
For example, it may be difficult for an organisation that operates internationally to ship components or finished products by sea to serve niche markets with individualised goods.
Moreover, it may be arduous for this organisation to promptly react to changes in demand.
Hence, unless the organisation is willing to significantly increase its administrative and logistics costs (e.g. coordinating all parts of its value and supply chains), it may be forced to take counter-agile actions to remain competitive and limit its vulnerability in the marketplace.
As it is evident that the cost of designing an agile supply chain is high, one of the possible solutions to the above dilemma is to outsource the delivery component of the supply chain to an expert supply chain service provider, whose internal processes re designed and engineered around the principles of supply chain agility.
A high-end supply chain visibility technology can aid this process significantly, especially one that can manage the exceptions and bottlenecks of the supply chain, while providing a dynamic forecasting through the extraction of short-term trends and information data.
DEAN World Cargo is a market leading 4PL and supply chain service provider with close to 40 years of experience, particularly in the fashion and retail segments. For more information, please contact DEAN World Cargo: www.deancargo.com.au | Tel: (03) 9279 4400