Accell Reduces Supply Chain Complexities

Kinaxis Inc., an authority in driving agility for fast, confident decision-making in an unpredictable world, has announced that Accell Group has deployed Kinaxis’ RapidResponse platform, digitally transforming its supply chain, providing solutions to supply chain complexities.

Based in Heerenveen, Netherlands, Accell Group is a European market leader in e-bikes and Europe’s second largest supplier of bicycle parts and accessories. The company is leveraging RapidResponse to gain the agility and flexibility needed to react to changes in demand and disruption.

“We knew that in order to remain a market leader, we needed a supply chain that could withstand disruption and adapt to change,” said Jon San Andres, Group Planning Director at Accell. “With Kinaxis we are able to gain complete visibility into our supply chain, and better plan for any scenario.”

With Kinaxis, Accell Group has end-to-end visibility of its supply chain, and the ability to balance all aspects of the demand and supply plans instantly and continuously, taking into consideration material restrictions, production capacity and market volatility. RapidResponse provides the ability to run multiple simulations and collaborate in real-time.

“We continue to see accelerating customer growth in European markets, and we understand the unique supply chain requirements they need,” said John Sicard, Kinaxis CEO. “We are excited to continue to work with Accell Group in bringing concurrent planning to its supply chain.”

The Accell and Kinaxis teams were supported by bluecrux, a value chain consulting company, with broad business experience in successful planning transformations. Accell, Kinaxis, and bluecrux blended into one team, efficiently melting cultures and methodologies. Bluecrux took on the role to dive into the Accell business context and processes, bridging across organisation, process, RapidResponse and Accell systems. Bluecrux also supported Accell and Kinaxis in driving the data and change management streams, where high quality data sets and full user adoption are adding to the success of the project.

“Using their sound methodology on how to manage advanced planning solution implementations, bluecrux helped us taking the first step in the digitalisation of our planning processes,” San Andres said. “Bluecrux is smoothly blending their business process experience, with their understanding of RapidResponse and their overall change management expertise.”

 

The Time for Supply Chain Visibility is Now

Supply chain visibility has been a hot innovation topic for more than the last five years, as tracking technology has evolved and more benefits have been identified. But getting past the market hype, what real progress has been made, and what is left to be done to give supply chain and logistics professionals comprehensive visibility to their operations – especially within retail?

To answer this question, as part of a broader innovation study, Descartes, in conjunction with SAPIO Research, conducted a study of 1,000 supply chain and logistics executives in Europe and North America to gain a better understanding of how far innovations in supply chain visibility have been deployed.

The results of the study – Supply Chain and Logistics Innovation Accelerates, But Has Long Way to Go – show that visibility is contending with other major innovation initiatives and is mature in some transportation modes, but also still has a ways to go. There is, however, a significant variance in the length of that journey for companies based upon senior management’s understanding of its importance to the business. This point should not be lost by supply chain and logistics leaders.

Chris Jones (pictured), EVP, Descartes explains, and reveals key findings from Descartes’ recent research.

Contender in a crowded market

Digitisation has received a lot of attention because it’s closely aligned with supply chain and logistics innovation to transform company performance in ways that allow customers to see the positive difference. Supply chain and logistics operations are typically very extensive, and is something most retailers – bricks n’ mortar and ecommerce brands – can relate to. So it’s highly unlikely that companies would have digitisation programmes that address the entirety of their operations, and innovation themes would end up competing for the same resources. Therefore, senior management support is extremely critical to get to the top of the funding list. The study specifically asked if senior management thought that supply chain and logistics innovation was important – or not, and then cross referenced that answer with other questions to see what impact it had.

The research identified the top four digitisation initiatives companies have focused on as order fulfilment (47%), customer experience (45%) and transportation processes (44%) and supply chain visibility (43%). There was little difference in senior management support the for the first three results when evaluating who thought supply chain and logistics innovation was very important – or not. However, there was a significant difference in visibility results when senior management thought innovation was important (51%) compared to those who believe it was less important (30%).

What might be the reason for greater importance of senior management support for visibility innovation versus the others? The subject has been discussed for ages, but more practical deployments, especially for real-visibility, have become a reality in the last ten years. However, the other areas (order fulfilment, customer experience and transportation processes) are more widely understood by leadership and tie to business execution. This is why it is so important to educate senior management on the value of real-time visibility.

Supply Chain Visibility is Important

Given the significant disruptions of the last several years, supply chain visibility has become extremely important to manage supply chain and logistics performance. For senior management who believe innovation is very important, advanced tracking of truckload transportation (47%) was the top fully deployed innovation followed by fleet (45%) and courier (44%). Supply chain visibility is, however, rapidly maturing as between one-third to one-half of the respondents across all modes (i.e., truckload, fleet, courier, air, rail, ocean, LTL and barge) cited technologies in pilot or partial deployment.

Taking visibility information and integrating it into supply chain and logistics processes is where its value is fully exploited. Almost half (49%) of the respondents have already fully integrated real-time shipment tracking into their customer service solution, followed by integration with customer portals (36%), transportation management systems (TMS, 27%), supply chain control towers (23%) and dock appointment scheduling systems (23%). For fully deployed TMS integration with real-time shipment tracking, there was a significant difference between those who said senior management believes supply chain and logistics innovation is very important (34%) and those who think it’s less important (16%). The same was true for real-time shipment tracking integrated with a customer portal, with senior management who regard innovation as very important at 44%, compared to 23% for those who regard it as less important.

Competition

Competition is also shaping supply chain and logistics innovation and raising the importance of visibility. The top competitive innovation respondents cited was real-time shipment location (27%) followed by electric or alternative vehicles for more sustainable delivery (23%), digital customer experience (22%) and robotics to improve fulfilment capacity (21%).

Conclusion

Shipment and delivery visibility has become one of the top supply chain and logistics innovation initiatives as companies look for ways to better serve customers and manage inventory. It is also a differentiator that offers retailers the data and insights needed to a leap ahead of the competition.

While the value may be apparent to supply chain and logistics professionals, it’s not necessarily the case with senior management, and may be challenging for visibility programmes to compete with other innovation initiatives for funding. This is why it’s so important for supply chain and logistics organisations to educate senior management within their retail organisations about the value of visibility and where it can be deployed as it rapidly matures.

Where is your brand in its visibility innovation journey, and how have you gotten your senior management to see the opportunities that exist with it?

Supply Chain Experts Say Costs are Falling

Long-awaited price deflation is now happening, says international procurement and supply chain management consultancy INVERTO, part of Boston Consulting Group. Sushank Agarwal, Managing Director at INVERTO, says that businesses must now renegotiate with their suppliers to bring prices down – or lose out to their competitors as price competition heats up:

“The coming months are going to see significant price competition as costs come down, especially in certain commodities. Those businesses that are unable to cut prices in line with the rest of the market could lose out significantly. Some of the major supermarket groups are already starting to compete more heavily on price – milk is one product where we’re seeing price cuts. This trend is going to be repeated across a whole range of industries. There are sectors, like luxury goods, where pricing matters less but that’s a minority of the economy. A lot of businesses have fallen out of the habit of negotiating prices down over the last couple of years. They need to get back to doing that and quickly.”

Despite inflation in the overall Consumer Price Index only having fallen from 10.4% in February to 10.1% in March, INVERTO says that it has seen costs start to fall noticeably across a range of products, including:

– Milk (down 7% from peak price in December 2022)
– Construction materials, such as:
– Sawn wood (down 8% since November 2022 peak)
– Structural steel (down 5% since November 2022 peak)
– Steel rebar (down 7% since November 2022 peak)

These price decreases add to others that were already down substantially from their peaks, such as wholesale electricity, now down 71% from its peak in August 2022 and wholesale natural gas, down 77% over the same period.

Agarwal says that businesses must proactively engage with suppliers and put pressure on them to cut their prices, just as suppliers put upward pressure on prices when inflation was rising. More businesses should now be looking to renegotiate and structure their contracts in a way that allows prices to decrease as inflation falls, rather than only moving in one direction. “Every business in the UK will have seen its costs rise over the last 18 months, with suppliers blaming inflation for their own prices going up. Now that period is over, businesses have to push back in the other direction. Businesses can take a lot of the stress and time out of these price negotiations by agreeing transparent pricing mechanisms in their contracts with suppliers. These mechanisms can ensure that customers know they aren’t being taken advantage of in pricing, while suppliers know that they will get a fair margin even when prices start to come down.”

To help businesses to monitor their suppliers’ costs and negotiate pricing with them, INVERTO has created its Value Protector tool. This tool allows buyers to independently assess the costs of all their suppliers’ inputs across the locations in which they operate. This gives businesses the information they need to judge whether the price rises demanded by suppliers are genuine or to decide whether to negotiate price decreases.

Businesses can then use the insights provided by Value Protector during meetings with suppliers in order to base the negotiations on the true costs of their suppliers’ inputs. Agarwal adds, “few suppliers are likely to want to share their input costs. Bridging that information gap is the most effective way of reaching an agreement that works for both parties. Customers that can come to a negotiation armed with that data put themselves in the best position to bring their costs down.”

Forewarned is Forearmed in Supply Chain

In uncertain times, supply chain planning is paramount, says Stephan Heessels (pictured), Director, BEUMER Group Logistic Systems. He explains why increased use of automation and digital technologies is essential and talks about how he saw the industry developing over the course of 2023, particularly in terms of the way in which e-commerce affects the material handling and logistics business.

“The major disruptions caused by the Covid pandemic may now be largely behind us, but that does not mean that everything will be smooth sailing from now on. Even as that memory recedes we find that there is still plenty to concern us, with geopolitical conflicts, high inflation, energy insecurity and nervousness around a pending global recession heading the list. For the logistics operator, increased automation and use of digital solutions will be more important than ever in order to respond and modify their processes to meet evolving circumstances.

“For years, the cornerstones of supply chain management have been globalisation, low-cost supplies and minimal inventories. Covid had a major deleterious effect on global supply chains and with the current global geopolitical and fiscal outlook, major upheaval is still possible. Experts predict that systems could return to pre-Covid ‘normality’ in 2023, but even so, the global logistic network will be vulnerable to future political instability, natural disasters and regulatory changes. Building supply chain resilience and assessing how future interruptions can be avoided is therefore critical.

“For an industry that has relied on volume growth, it will be difficult to attain revenue increases in these circumstances. Indeed, we are already witnessing stagnation in parcel volumes and some major logistics service providers are reporting financial losses and tumbling share values. However, on the positive side one of the forces driving the growth of online retail commerce is the global use of smartphones and tablets. Both retailers and shoppers are increasingly using mobile shopping apps, with one in five US shoppers reporting using them multiple times per day.

“Mobile commerce is estimated to have been 6% of total retail sales in 2022, a rise from 4.1% in 2019. And by 2025 social commerce sales – those taking place on platforms such as Facebook, Instagram and TikTok – are estimated to triple.

“In concert with the rise in m-commerce is the increasing popularity of live shopping, whereby retailers can digitally broadcast their products via video and connect directly with consumers online. This is an emerging phenomenon that first appeared in China and can be thought of as the digital, mobile phone based version of TV shopping channels. It is set to become a major driving force in e-commerce, with the 2023 market size projected to reach US$600 billion in China and US$25 billion in the USA.

“Nevertheless, amid this forecast bright outlook for growth there are some shadows. The distribution sector is having to grapple with a difficult labour market as the talent shortage in the supply chain, end to end, reaches a crisis point. Postal distribution centres are struggling to ensure timely and cost-effective last-mile deliveries in the face of an unprecedented lack of workers.

“To stave off this attrition, the industry will also need to deploy strategies that attract, retain, develop and motivate its workers in the digital era. In light of this, we expect to see companies being more conservative when it comes to capital investments, while the focus on digitalising their processes – both back and front-end – will be even stronger, with the adoption of automation tools and advanced data analytics. We have seen much development in the digitalisation of the costly last mile, but hubs will be looking to find ways to digitalise all their processes and become less dependent on human resources through digital insights.

“In consideration of all these factors, I conclude that despite facing some headwinds, the market will continue to grow, providing e-commerce fulfilment facilities with plenty of opportunities for increased growth. In servicing this market, however, it will be important that fulfilment centres work to optimise their operations to reduce costs and resources through increased use of automation and digital technologies.”

Banking Collapses: UK Businesses Urged to Collaborate

With recent events at Silicon Valley Bank and Credit Suisse rocking international finance systems, the experts at global supply chain risk management solution Resilinc are urging UK businesses to collaborate with suppliers to reduce uncertainty.

This instability at major international banking institutions comes on the back of an already turbulent time for businesses. Resilinc’s EventWatchAI risk monitoring platform reported a 271% year-on-year increase between 2021 and 2022 in bankruptcies, plus a 46% increase in corporate restructuring and 77% increase in leadership changes during the same time period.

Resilinc is outlining five strategies businesses can employ to mitigate financial risk across their supply chain.

1. Map it out

The first step to collaborate and work with your suppliers is to know who your suppliers are. Mapping down to the subtier level offers complete visibility into your supply chain. Start by focussing on suppliers with the most value or whose loss would impact the company most severely. Mapping needs to go beyond just a ‘tier one’ approach. A smaller supplier in size and value could be providing a vital component of your product or service, without which the financial disruption to your own business could be considerable.

2. Assess the risk

With a full multi-tier map of your supplier network, it’s crucial to carry out risk assessments. Launch risk surveys to individual suppliers to assess financial status and highlight any weaknesses. Take a collaborative approach and offer to help suppliers implement strategies to reduce risk, identifying which suppliers are most in need and prioritizing which to work with first. By undertaking a shared course of action together with suppliers, rather than instructing that improvements are needed, trust will be strengthened at the same time.

3. Be flexible

There are many progressive financial arrangements organisations can offer their suppliers including placing advance orders, paying upfront, or even loaning funds to suppliers facing cashflow challenges. Supporting a smaller supplier essential to your business creates loyalty between you and your supplier, as well as builds a transparent, open relationship which both parties benefit. Oftentimes, it can also result in preferential treatment, early notifications about looming supply chain issues, and larger discounts.

4. Size up support

For suppliers that account for a large amount of expenditure, consider placing orders now for far in advance to account for, and secure, future demand. This could even be up to a few years ahead. Placing orders ahead might also be prudent for suppliers with whom you have a medium spend, or alternatively paying them upfront or on delivery. For suppliers where there is a smaller expenditure, paying in advance may also work, or in the case of small and medium-sized enterprises, extending a loan or relaxing service-level agreements that may be expensive for the supplier to fulfil could be possibilities. Some organisations might also consider taking an equity stake in SME suppliers.

5. Monitor the situation

Mapping out your supplier network through multi-tiers and establishing actions to minimise financial risk is the first stage in building a robust supply chain. However, truly resilient supply chains also include 24/7 monitoring of potential threats. Risk monitoring provides real-time insight into potentially threatening events, enabling businesses to act immediately. Fortunately, it’s possible to access solutions which use AI and other cutting edge technologies to not only identify but predict supply chain disruptions against a number of possible risk events, including financial risks.

Commenting on the importance of supply chain collaboration, Bindiya Vakil, founder and CEO of Resilinc, explains: “After the Silicon Valley Bank announcement, which impacted 3,000 UK businesses, many of our customers began outreach to their SME suppliers offering assistance and support to head off the crisis. We saw procurement leaders offering to help innovative, start-up suppliers, which often provide valuable components, giving options such as reduced payment terms, upfront payment, and orders ahead of demands.

“Not only was this a heart-warming display of good corporate citizenship, it’s actually high class procurement leadership in action, grounded in commercial common sense. Ultimately, it’s far more cost-effective to support existing suppliers than source new ones unexpectedly. Long term supply chain resilience is built on a foundation of supplier transparency, trust and collaboration.”

 

Asia-Pacific SC Consultancy Expands to Europe

A leading end-to-end supply chain consultancy, TMX Global, is expanding into the EMEA market with a central London location and the strategic hire of Gerry Power, UK Head of Country.

Surging demands, supply shortages and inflationary pressures are putting increasing strain on supply chains throughout the EMEA region, driving an increasing need for businesses to be more resilient, agile and adaptable to fuel future growth. As the EMEA region continues to navigate its way through several years of disruption and upheaval, TMX’s specialist knowledge in designing supply chains of the future will help prepare organisations across the region to stay ahead of the disruption and gain a competitive advantage.

Founded in 2010, TMX Global is a specialist supply chain consultancy with offices in Australia, Singapore, Vietnam, New Zealand, Thailand, and Malaysia. The new London office is located at One Kingdom Street, Paddington – where TMX joins tech giants Microsoft and Accor.

In 2021, TMX Global (formerly TM Insight) acquired Xact Solutions in a move that saw the consultancy double the size of its team and secure its position as the largest independent supply chain and business transformation firm in the Asia Pacific region.

The organisation’s clients include Coca-Cola Japan Bottlers Inc, UNIQLO, Australia Post, BMW, Asahi, and Australian supermarket giant Coles. As it kicks off its EMEA expansion, TMX Global is working with one of the UK’s most trusted brands and largest specialist clothing, beauty, home and food retailers.

To lead the expansion, TMX Global has appointed industry heavyweight Gerry Power as UK Head of Country. Gerry has more than 30 years’ experience in the supply chain sector, with 22 of those spent leading TNT operations in India and Malaysia. He has also held senior leadership roles delivering strategic growth in the aviation, 4PL, and e-commerce space across both UK and Asian markets.

Power said: “I’m delighted to join TMX and head up the organisation’s expansion into the Europe and the UK. Events of the past three years have posed threats to supply chains in the EMEA region like we’ve never seen before. From Brexit to the pandemic, to the current challenges of the conflict in Ukraine – supply chains have been thrown into the spotlight and we’re seeing more organisations explore how they can ensure their operations are more robust, agile and flexible. I’m excited to replicate TMX’s commitment to designing and delivering bespoke and tailored end-to-end supply chain strategies that help provide clients with a competitive edge in the UK.

“Our base in central London provides us with a great location to service our clients across the UK as well as throughout Europe and I see enormous scope for growth in this region. Now that we’re on the ground, we’re assembling a best-in-class team to help future proof supply chains for our clients locally.”

Travis Erridge, Co-Founder and CEO at TMX Global, said: “In the past few years, there’s been an increasing demand for strategic supply chain expertise around the world and as a result we’ve always had our sights on global expansion. This entry into the EMEA market is a significant milestone for us, as we invest in full delivery teams and an office in central London. We’re also delighted to secure the appointment of Gerry Power to lead our expansion and consider this an exciting time to be part of TMX Global’s growth. We look forward to announcing more strategic hires as we strengthen our team on the ground throughout the region.”

Milan Andjelkovic, Co-Founder and COO at TMX Global, added: “The UK is an important market for the supply chain industry, and we see strong alignments in the TMX approach and the business needs of organisations in this region. As a result of ongoing economic and political disruption worldwide, the pace of change is only accelerating in supply chains throughout the UK. Our team of industry leaders are committed to innovation, and we’re excited by this unique opportunity to establish ourselves in the centre of London and share our experience and expertise with the EMEA market.”

 

Manhattan Benchmark Reveals Retail Winners

Manhattan Associates Inc., in partnership with Google Cloud and Zebra Technologies, has announced the findings of the industry’s first real-world analysis of Unified Commerce in specialty retail. The Unified Commerce Benchmark for Specialty Retail, conducted by Incisiv, assessed 124 retailers across 11 specialty retail segments on the implementation of 286 key attributes of Unified Commerce.

Based on insight from real purchases, returns, and customer journeys across digital and physical channels, the benchmark reveals the common attributes of successful retailers and the opportunities for others to improve their customer value and modernise operations. Of the 124 retailers benchmarked, 15 emerged as leaders. These brands are Academy Sports + Outdoors, American Eagle Outfitters, Belk Inc., Crate & Barrel, Levi’s, Macy’s, MAC Cosmetics, Neiman Marcus, Nordstrom, Pandora, REI Co-op, Saks Fifth Avenue, Sephora, UGG and Zales.

In today’s rapidly evolving ecosystem, retailers need complete visibility on and insight into every aspect of their business, from back-end to customer-facing. Unified Commerce solutions combine a retailer’s front- and back-end systems to establish a single view of the business. That single view informs better decision-making and enhanced customer experiences, while enabling brands to identify and respond to trends quickly, ultimately driving stronger revenue growth by up to 6X. However, consolidating systems and building a cohesive Unified Commerce solution can be quite challenging.

Retail Challenges

The benchmark identified the following common challenges in retailers’ efforts to adopt this new model:

  • Personalisation – Retailers must be able to identify shopper intent and curate a personalised experience that meets their expectations. However, only 38% of the retailers studied give their store associates access to shopper purchase history and wish lists across all channels. Only 20% of the retailers studied provided personalised product recommendations and offers. As a category, digitally-native vertical brands (DNVBs) outperformed the broader retail cohort in this area, with 42% offering advanced personalisation capabilities – 16 points ahead of the overall group examined.
  • Real-Time Inventory Visibility – Visibility into allocatable and saleable inventory and rich findability are critical for retailers wanting to provide a seamless omnichannel experience. Only 29% of the retailers studied provide real-time inventory statistics on their product detail pages.
  • Convenience and Flexibility – Today, convenience is about more than just speed of delivery. Convenience encompasses providing multiple payment and delivery options and the ability to make changes to an order after the sale. Only 15% of the retailers studied provided the option to change fulfilment method post order confirmation. On an average, only 27% of the retailers provided the ability to return store purchases online.

Driving Strong Growth

“Shoppers don’t see channels the way retailers do. Unified Commerce can only provide the highly customised shopping experience expected by today’s consumers if there is true visibility of inventory availability, and flexibility during and after the sale,” said Manhattan Associates president and CEO, Eddie Capel. “Embracing a Unified Commerce model can drive strong business growth, high revenue opportunity, lead to competitive advantage and heightened customer loyalty that every retailer covets. With the right technology and solutions, they can outperform their peers by as much as 6X.”

“Zebra Technologies is helping retailers globally optimise their inventory and engage their associates to improve productivity and deliver an elevated customer experience,” said Bill Burns, Chief Executive Officer, Zebra Technologies. “This new benchmark highlights the important role that real-time inventory visibility, front-line worker enablement, and fulfilment flexibility play in driving Unified Commerce, and we have the right solutions to deliver these benefits.”

“In order to deliver on the promise of Unified Commerce, retailers must connect digital and in-person experiences, and all of the data and systems that enable them,” said Carrie Tharp, VP of Retail and Consumer at Google Cloud. “Manhattan Associates’ partnership with Google Cloud on this benchmark shows how retailers can make it easy for customers and store associates to find the right products online and instore by implementing a unified commerce strategy backed by data and AI.”

New Battleground

Giri Agarwal, Chief Strategy Officer at Incisiv commented: “Unified Commerce is the new battleground for retailers to differentiate themselves. Our 2023 Unified Commerce Benchmark shows that leaders who have adopted unified commerce deliver highly nuanced, seamless customer experiences across channels, leveraging technology and data to drive revenue growth. The insights from this benchmark won’t just help retailers keep up, it will help them stand out.”

Click HERE to view the complete 2023 Unified Commerce Benchmark for Specialty Retail.

 

Setlog Joins Forces with Shippeo

Setlog’s Supply Chain Management (SCM) specialists will join forces with Shippeo’s transportation tracking experts to give Setlog customers an optimiszed Carrier Booking module that will enable them to track their shipments in real-time.

In addition, they will receive exact information on the estimated and actual time of arrival of their shipments (Estimated Time of Arrival, ETA, and Actual Time of Arrival, ATA). The substantial advantage is that companies receive an immediate warning in the event of a delivery delay. They can then react to the disruption and adapt the transport processes to the new circumstances, leading to greater predictability in their supply chains.

“For those who buy and trade globally, it’s not enough just to know when a container ship has left port. Predicting the arrival time as accurately as possible and tracking the shipment in real-time is an unbeatable competitive advantage for shippers,” emphasises Christian Trappe, Sales & Business Development Lead at Setlog. The IT company’s first customer to use Shippeo’s solution is household goods specialist Wenko.

Full Transparency

Companies very easily get full transparency on the transport status of their shipment in their day-to-day business. There are several reasons for this:

  • Shippeo’s tool can be fully integrated into the OSCA SCM solution via an interface (API) in just a few steps; there is no media break;
  • Users have access to 90% of all ocean freight vessels;
  • Users benefit from real-time container tracking that goes down to SKU level;
  • Shippers remain digitally independent, meaning they can continue to work with their carriers, contract logistics providers, and other partners and do not have to replace their service providers;
  • An innovative early warning system is created that allows better control of the inflow to the warehouse. Delays are thus not only avoided, but inventory and demand are also matched and optimised.

According to Trappe, the choice for a partner in real-time transport tracking was made quickly for several reasons: Firstly, Shippeo has the widest reach in this area, with access to more than 150,000 logistics service providers, and at the same time, more than 1,000 TMS and telematics systems are connected to the system. Second, the platform is more mature than any other on the market and delivers the highest ETA accuracy. According to Trappe, Shippeo promises 90% accuracy on delay forecasts up to 12 hours before delivery in the road sector.

32% Increase in Accuracy

To continuously improve its forecasts, the French company not only works to improve data quality, but also relies on advanced technologies such as machine learning. In May last year, Shippeo published figures on the accuracy improvement: “In a window of up to 48 hours before a scheduled delivery, the increase was a remarkable 32%. This was an exciting moment for us and our customers, especially since we have already heard from several customers how impressed they are with our Estimated Time of Arrival forecasts. Among them Renault, one of the largest car manufacturers in the world,” says Anand Medepalli, Chief Product Officer at Shippeo.

For Trappe, the cooperation with Shippeo is an important milestone in enabling companies to establish an inbound supply chain with maximum transparency and real-time visibility: “Our SCM solution OSCA provides our customers with SKU transparency from the selection of the supplier to the control of the ordering process and the receipt of the goods at the distribution centre.”

 

 

Cost-To-Serve Analysis Should be Core Planning Tool

A new white paper from a supply chain consultancy suggests retailers are too fragmented in their approach to determining their Costs-To-Serve (CTS) and should instead adopt CTS analysis as a core, business-critical initiative for informing future decisions and direction.

“In a great many retail businesses Costs-To-Serve are treated as though they are a fixed overhead and allocated evenly across orders, when in reality they vary by the individual characteristics of each order – channel, geography, the nature of the goods, the behaviour of the customer, and so on. They also change over time, and not necessarily uniformly,” explains, Neil Adcock, Managing Director at Bis Henderson Consulting – authors of the report.

The report asks some fundamental questions: Take a given order, do you know what it will cost to fulfil that order? More acutely, do you know what margin you are making? In fact, are you actually making any profit at all? These are questions that many retailers may find difficult to answer.

The hidden costs

“Whether determining channels to market, or setting up or revising fulfilment and distribution strategies, the retailer needs a deep understanding of where the Costs-To-Serve are generated, how these vary across orders, and what actions can be taken to improve profitability on every order,” Adcock says. “Such actions could range from changing the locations of fulfilment centres, to varying the customer offer, to in some cases limiting service offerings or even withdrawing from some lines of business.”

The white paper sets out the many hidden factors influencing cost, margin and value in the supply chain and emphasises the importance of understanding CTS at a granular level across the broad gambit of products and services a retail business offers. “The analysis should inform the wider strategy, and should give clear visibility of margin and how to maximise it or protect it,” he says.

More than a one-off exercise

The report finds that CTS needs continual revisiting in order to inform and respond to higher-level business decisions and is an essential tool for protecting margin and ensuring profitability.

Adcock explains: “The balance of Costs-To-Serve is constantly changing as fuel costs, labour costs, rents, the affordability or otherwise of warehouse automation and so on vary, but also with changing customer behaviours. Particular channels may become more or less popular, for instance, as people drift back to the office, home delivery may decline relative to click and collect, or the nature of demand ‘peaks’ may change with recession. Also, the balance between branded and white label goods may change with economic hardship and that may affect how much margin is available to cover the CTS.”

The report states that there is no ‘standard model’, but offers valuable insights that are common to many retail scenarios, covering topics such as channels, distribution architecture, service offer, differentiated service levels, hidden costs, returns, accounting policies, exceptions and methodology.

The white paper offers pointers on how a retailer’s Costs-To-Serve are made up, where the ‘hidden’ costs are buried, which costs are truly fixed overhead and which are order-related. Critically, the report emphasises how retail businesses need to make CTS a central pillar of their supply chain thinking, helping them to make better-informed and more profitable policy decisions across the board, from channels-to-market to investment decisions and service level promises.

CLICK HERE to download the full white paper.

 

Podcast: Future of the Supply Chain – Listen Now

Logistics Business magazine has launched a series of podcasts. ‘Logistics Business Conversations’ are monthly, topical and exclusive talks with key informative spokespeople from the supply chain industry. Available now for free on Spotify, Apple Podcasts, Acast, Google Podcasts, Amazon Music, and all other podcast distribution platforms – just search for Logistics Business Conversations.

In our first episode, hosted by editor Peter MacLeod, he talks to Guido Brackelsberg and Niklas Kirwel, Directors of Setlog – a supply chain management software specialist. They discuss international supply chain challenges, how to mitigate them and whether globalisation as a trend will continue or not.

30 minutes of lively debate and good advice. Listen anytime on your preferred platform or by clicking here.

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