Retailers and fashion brands need visibility and interpretive analytics from procure-to-pay, as engagement with supply and channel partners deepens. Here are five key reasons visibility is critical, sooner rather than later.
1. With increased complexity comes increased risk.
Retailers have been particularly adept in leveraging globalization to reach new markets and offer customers choice and value. But that agility at scale comes at a price, as supply chains take on more supply and channel partners across more borders and product lines.
Growth-oriented brands know they must think beyond traditional, mature markets like North America or Europe. Products are highly trend-sensitive, with short lifecycles. Innovation and time to market is critical, as is a personalized, frictionless online customer experience with on-time, in-full delivery reliability and multiple ETA and drop-ship options. Understanding where demand is generated, placement of facilities and inventory to fulfill demand must be precise; and therefore, coordination with suppliers and logistics providers must be tightly orchestrated, from end to end in real time, to keep supply, demand and utilization aligned.
“It’s not just about complexity of inbound global sourcing anymore,” says Vincent Barnes, VP of Strategy for Europe, the Middle East and Africa with Infor Nexus. “A North American sportswear retailer may now sell in 90 countries through its own stores, e-commerce, other retailers and e-tailers. Inbound sourcing, inventory placement and the outbound order allocation and distribution are becoming much more complex.”
Even retailers who get it right in terms of technology investment and sourcing, Barnes adds, soon inevitably face growth challenges. “It’s a never-ending process of growth, expansion and innovation, while making sure you continue to build agility into the supply chain.”
2. Collaboration is data-driven.
Life was simpler before e-commerce, and much simpler before COVID-19 put e-commerce on steroids. As large, palletized orders shipped out seasonally to big regional warehouses for push distribution to physical stores on the retailer’s schedule. The important action then was on the supply side, in sourcing of finished product from supplier warehouses and contract manufacturers.
“The data across the supply chain is disparate, not just within the retail brand itself but from the suppliers,” Barnes explains. “What we need is real-time information across the entire supply chain, that everyone can plug into and see the same thing.”
3. Real visibility isn’t on a spreadsheet.
As the sheer volume of data and the number of variables critical to decision-making reach a tipping point, conventional manual systems using MS Excel software, a traditional electronic data interchange-based ERP, warehouse or transportation management system, and the paper forms, e-mails and phone calls used to deal with network partners and align internally become unworkable. Managing real-time, end-to-end visibility is, by definition, going to demand the latest innovations in transactional data interchange and degree of automation.
With an estimated 80% of critical supply chain data now generated externally by network partners such as suppliers and logistics providers, connectivity of partners and visualization of data are key, says Infor Nexus vice president of product management and solutions strategy Heidi Benko. “The value is limited if I’m asking my suppliers, carriers and logistics providers for the status of orders and shipments via email and trying to cobble together an answer.”
Still, Barnes estimates that freight technology adoption remains at historic pre-COVID levels of around 65% to 75%. The reasons are all too human: lack of full C-suite buy-in and engagement, staff churn during implementation, fear of a “black box” software failure, and a general lack of control felt with reduced personal contact. When problems arise, individuals get impatient and revert to what they know: spreadsheet workarounds and contact call lists. Unintended consequences often diminish the existing technology’s value and discourage future investment.
4. Sustainability adds new complexity.
Businesses worldwide are under mounting pressure from customers and regulators for greater transparency and reducing carbon emissions and materials waste in both the production and delivery of their products.
On the emissions side, the increasing frequency, severity and recovery costs of extreme temperatures and natural disasters add urgency to curbing greenhouse gases. Supply chain impacts contribute to more than 80% of global emissions, and many developed and emerging economies will soon require companies to collect and report external “Scope 3” emissions by suppliers and logistics providers.
Consumers and investors, meanwhile, want independently certified transparency about how products are made, from the total carbon footprint (including delivery), to the quality and safety of materials and components sourced, to factory and labor conditions. All of this translates into reporting and collaboration commitments from n-tier suppliers and service providers further upstream and downstream, and participation from certification bodies and specialized third-party data providers.
On the “zero-waste” side, software optimization and automation, enabled by artificial intelligence and machine learning, can automate processes against clear business rules to maximize utilization and minimize fuel consumption. It can also navigate the business tradeoffs of repair, recycle and reuse programs, to extend product lifecycles and generate new revenue streams.
5. Companies need to foster an innovation culture.
Brands risk falling behind in how they’re perceived, to navigate new technology and market changes. They can miss critical opportunities to lure new customers, shorten time to market and increase revenues and margins. Younger, skilled workers with a wide range of job options to choose from and who are comfortable with technology, are willing to turn down work that they feel is routine, lacks creativity or is resistant to innovation. Market leadership and forward-looking reputations begin to erode.
Companies of all kinds will need to assess their operations and strategic objectives holistically, taking into account how they’re perceived in the market by their customers, workers, investors, supply chain partners and other stakeholders. Adaptability to change, backed by data-driven visibility, will determine competitive advantage.
Infor Nexus Delivers Visibility to Retail Supply Chains
Infor Nexus is the leading global supply chain platform. Infor Nexus connects a network of over 85,000 brands, retailers, manufacturers, suppliers, logistics providers and banks on single-instance network platform to seamlessly orchestrate global supply chain processes from source through to delivery and payment. Companies streamline their operations, eliminating inefficiencies and waste while gaining data-driven insights and optimize the flow of capital for improved agility, resilience and sustainability.
Infor Nexus’ Control Center connects supply chain partners to share standardized data and analytic insights, then collaborate with enhanced, real-time control tower visualization of the end-to-end supply chain. Machine learning-based algorithms monitor network activity to predict late shipments and stock outages, provide exception alerts and distinguish meaningful exception signals from noise. Intelligent decision support aggregates common-cause situations or exceptions: predictive analytics offer context on potential impacts across the supply chain. Algorithms are informed by more than 20 years of network data. Key verticals include retail/apparel, logistics services, industrial manufacturing, industrial machinery, CPG and distribution. Clients include Levi’s, Burton, Coles, Deckers, Caterpillar, Molex, Columbia Sportswear, Ecolab, Kuehne + Nagel and DB Schenker.
Resource Link: www.infor.com/solutions/scm/infor-nexus
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