Data and IT systems have always promised to deliver a vision of the future that somehow has never quite materialised. We’re keen to hear readers’ views on the use of tech, in particular things like data analytics and big data. Mikko Kärkkäinen, group CEO of Relex, believes that investments in the right IT systems must become a priority if new fleets, DCs, and other network assets are going to operate at their best.
The latest advances in technology about the location and availability of vehicles are only going to be as good as the information they rely on further up the supply chain.
How do retailers ensure there is sufficient supply chain capacity in picking, transportation and shelving – in particular when going through the biggest promotions and seasons? How can they plan seasonal and presentational stock build-ups in a realistic and cost effective manner? What’s the best way to deal with bottlenecks within the supply chain?
Building a solid supply chain plan based not only on demand forecast, stock levels, and open orders but also on lead times, delivery cycles and capacity constraints is key to those questions. It also enables retailers to:-
- Continuously check if there is enough inventory to fulfil demand
- Check if supply chain capacity can fulfil the plan
- Try alternative plan scenarios, especially when facing uncertain demand
Some call it capacity-restricted supply chain planning, integrated business planning or retail S&OP. Whatever the name, it provides a uniquely innovative view of the supply chain and will therefore form an increasingly integral part of ensuring the successful ‘last mile of delivery’, which is where fleet management comes into its own.
S&OP planning gives retailers full transparency and visibility of the entire supply chain, helps them spot any capacity issues in the chain, and enables them to test and compare different plans before choosing the best one.
By linking all the echelons of the supply chain together, all planning and actions are based on one single, end-consumer level demand forecast. This forecast can then be converted to store order forecasts, transportation forecasts, capacity and resourcing forecasts etc.
Maintaining capacity restrictions for delivery routes, store shelving capacities, and warehouse space, for example, can be used to get proactive alerts on any capacity issues on any level of the supply chain. For example, alerts might take into account daily shelving capacity in store; transportation capacity per day per store, per route or in total level; as well as picking capacity per day per warehouse zone. The moment the system detects any deviation or risk to capacity limits, it can alert the business and amend downstream supply chain processes in real time.
There is little advantage to be gained by having fleets optimally scheduled for route planning, for example, if the systems and processes in place further up the supply chain do not support these.
If you have thoughts on the use of data in the retail operations and logistics industry, why not get in touch? You can leave a comment, or drop us an email. We’ll be publishing some reader opinions on this topic, so add your voice to the conversation.