Getting supply chain execution systems right amid COVID


The market environment in 2020 has been characterised by the enormous levels of uncertainty and volatility in terms of demand as well as significant capacity constraints. Choosing the right supply chain execution system has been critical to the success or otherwise of warehouse and transport operations. Scalability and flexibility has become key in order to cope with market structures which have in some cases transformed over a period of months.

Take retail for instance. COVID has left a legacy of empty high streets which are only starting to recover. In its place, consumers have wholeheartedly adopted e-retail even for items such as groceries. Those bricks and mortar retailers which don’t have an effective multi-channel or omni-channel strategy will rapidly go out of business and such a strategy will often require a cloud-based warehouse management system which can be rolled out quickly and easily over multiple sites. Agility more than ever is essential, especially now that consumers are expecting reliable, specific and fast delivery times. They want to know what stock is available and exactly when it will be delivered – a trend which can be largely attributed to the influence of Amazon. Some of the best performing retailers in the crisis – such as Zara – had in place systems which allowed them to fulfil online orders from their stores as easily as from warehouses. Therefore after lockdown, they weren’t left with out-of-date inventory which required rolling over to the same season in 2021 or selling off at a large discount, as has been the case with many of their competitors. ‘Direct-to-consumer’ strategies are becoming quickly adopted and for many companies, this is transforming not only their operations but also their mindset. Systems which facilitate the far more complex requirements of dealing with a fragmented customer base will be a key to survival for many manufacturers.

Not just this, but the supply chain execution systems which are adopted need the flexibility to add in modular capabilities, such as returns processing, and above all the capability to be implemented and configured quickly and cheaply.

COVID has also forced logistics and supply chain organisations to assess how they most efficiently operate their warehouses. Volatility will require the use of more temporary staff so easy-to-use systems are a prerequisite to prevent long periods of training. Social distancing places stress on resources and consequently many companies are looking at how more automation can be introduced to improve efficiency. Execution systems can allow management to make decisions on resources, capacity and investment but they require high levels of real-time and accurate data visibility.

Source: Transport Intelligence, September 24, 2020

Author: John Manners-Bell