Long gone have the days when the visibility of the status of our deliveries was murky. The Supply chain is now an intersection of transparent links and we have now full visibility from production, right down to the distribution centre and out to the customer’s door. This logistic visibility gives the feasibility to be proactive instead of reactive; the more we know, the better we can apply our knowledge to satisfy our customer requirements.
It opens the door to what goes on between the start and end of a process. Customers use this information in endless ways; what the suppliers are doing, status of the freight, inventory levels and, most important, what customers want. Companies use this information in some obvious ways: to understand customer demand to match the offer, identify and solve transportation delays, to match inventory and customers demand, cut cycle times, provide better service to customers, and save money.
The Growing Demand for Transparent Logistics
Long gone have the days when the visibility of the status of our deliveries was murky. The Supply chain is now an intersection of transparent links and we have now full visibility from production, right down to the distribution centre and out to the customer’s door. This logistic visibility gives the feasibility to be proactive instead of reactive; the more we know, the better we can apply our knowledge to satisfy our customer requirements.
It opens the door to what goes on between the start and end of a process. Customers use this information in endless ways; what the suppliers are doing, status of the freight, inventory levels and, most important, what customers want. Companies use this information in some obvious ways: to understand customer demand to match the offer, identify and solve transportation delays, to match inventory and customers demand, cut cycle times, provide better service to customers, and save money.
Changing of Customer Mindsets
This is a customers’ market. Standard deliveries to clients are almost obsolete. We can click and collect from stores and we can have our deliveries reaching us any-time and anywhere. Marketplaces have now a real foothold in the market by offering large product catalogues, fair price and great shopping experience. Customers are becoming more loyal when shopping on-line (apparel customers spend 67% more 31-36 months after the first purchase).
Shoppers like seeking what they want from wide selections, for the right price and fast. Cross-border ecommerce continues to become a more frequent habit among global shoppers. According to Pitney-Bowes, 66 percent of online customers said they shop cross border, with 58 percent saying they do so on a monthly basis.
New Technology
Information technology is leading the consumer and Logistics market. It’s driving changes in our shopping experience and visibility across the supply chain. We have moved from an outdated technology to more vibrant and dynamic solutions such as the use of warehouse management software, drones, AI & robotics, mobile technology etc. It’s a new way of working, a seamless streamline of data integration. This new wave of information technology that is giving to Logistics & Supply Chain a new direction and driving the customer behaviour to new requirements and expectations. The same technology is also given the marketplace platforms to grow and give customers more dynamic ways to shop on-line and interact with the entire supply chain. It’s this information technology that gives customers the feasibility to have the freedom to choose “how” and “when” they want to receive their products.
Supply Chain Flexbility
Companies are faced with increasing demands from customers for highly customised products and services delivered at unprecedented speed. As a result, flexibility is now just as critical as efficiency. Centralised distribution hubs have now been replaced by satellite operations to fulfil the stringent last mile delivery requirements. We have moved towards warehouse robotics to pick items from conventional racking. According to the McKinsey Group, the price of automated labour compared to human labour has fallen by up 50% since 1990. Technology disruption has also facilitated the increase of marketplaces for B2B operations. Customers can now easily select and book space directly with warehouses, get a selection of warehouses and costs and easily connect with hubs that are closer to customers. Last mile delivery has a crucial impact on customer satisfaction; it’s the perfect supply chain scenario in which crowd-sourced logistics solutions could be beneficial, and in particular the Uber-style last-mile freight services. Crowd-sourced transportation could be especially useful for small deliveries of goods portable enough to be transported by small vehicles, even by bike. Customers want flexibility and they are not interested in the types of carriers used!
Competitive Logistics Costs
We are currently living in the typical “customers’ market” where clients have options to dictate their requirements at no additional cost. One of the major challenges that the logistics sector is facing is the ability to keep costs competitive regardless of having to tailor relentlessly their services to customers. Technology has a big role to play in this; GPS, Smart phones, robotics and the use of marketplace solutions for B2B are only some of the tools that allow customers to enjoy the on-line experience with total visibility of the services provided. It’s the same technology and the increased demand of customised services (same day delivery, timed delivery) that enables the logistics providers to better utilise their assets, increase productivity and the ability to offer competitive costs without impacting the level of service provided.
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