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5 Ways to Modernize Your Supply Chain Logistics


5 Ways to Modernize Your Supply Chain Logistics

You’ve started the online business you’ve always dreamed about, gotten customers, brought in referrals, and seen your revenue increase as a result. Great! But along with that increase in revenue comes an increase in orders, and with that, a need for a system. Your business has grown enough for you to think about supply chain management.

How are you getting orders shipped to your customers? Is that the most efficient and cost-effective way? Is it environmentally responsible? How are you tracking orders to make sure they don’t get lost along the way? Are there any areas of your supply chain you could improve?

We’ll examine how technology is helping address these questions, and how business owners big and small can take control of their supply chain.

IBM, for example, uses its Food Trust product to track produce across the U.S. via the immutable digital ledger of blockchain technology. It’s permissioned, so only members of the network like growers and suppliers can add information to the ledger. Transaction, location, and processing data all get recorded into an electronic database accessible to any member of the network, anywhere they can access the internet.

Method 1: Automated Delivery

As a company grows, or even for smaller companies to compete with larger ones, the ability to deliver product quickly is important. Customers increasingly want their items within a couple of days, without wanting to pay extra for expedited shipping. Automated delivery is one way you can speed up the process of getting product into your customer’s hands.

Companies like Amazon are starting to utilize automated vehicles and drones for their last-mile delivery efforts; that last leg of shipping between them and the customer. Distribution centers near large urban areas allow for the combination of automated delivery and regular shipping, letting more flexibility into your deliveries.

Method 2: Artificial Intelligence (AI)

Artificial intelligence can be utilized in a variety of ways to try and forecast trends that could affect your supply chain. For example, a change in weather could mean an uptick in demand for a certain product, like heavy-duty boots, or a change in traffic patterns.

According to analytics firm McKinsey & Company:

“...the days of a ‘single truth’ regarding the forecasting numbers are over - these advanced algorithms provide probability distributions of the expected demand volume rather than a single forecast number.”

AI that constantly monitors and adapts to traffic patterns can update your fleet on the best routes to take to get around traffic and slowdowns, so your product gets to the customer more quickly. It can also make sure you’re only shipping as much as you need, so you don’t waste time and gas on excess inventory.

Method 3: Blockchain Technology

The ability to granularly track merchandise wherever it is in the country, or the world, is vastly improved by blockchain technology and the IoT. The IBM system we mentioned earlier not only lets members track the number of items and their location, but certify that those items have been inspected for quality and passed that inspection. Accountability across the entire supply chain is increased by the ability to know not just where something is, but who handled it and when. Multiple kinds of cargo can be tracked granularly with this method.

Environmental conditions and ingredients can also be tracked via the blockchain ledger, and given enough time and data, weaknesses in the supply chain can be identified and solved to further increase the efficiency of delivery.

Method 4: Crowdsourced Distribution

Delivery apps like Favor and Postmates are contracting people who live in the same areas as their customers to transport goods to them more quickly. Instead of using the Postal System, these companies enlist people to deliver everything from meals to packages, supplementing their existing distribution channels with one that may be more agile.

Method 5: Automated Risk Management

The modern supply chain is a complex, interrelated web of factors and people. Automated systems help a company manage the immense amount of data needed to plan and distribute products to a network of global customers. Both generalized and niche risk-management tools are available to help companies avoid interruptions in their supply chain as a result of factors like a political upheaval, drop in demand, or inclement weather.

While you may not be able to implement all of these methods into your supply chain logistics plan, every little bit helps. If you don't have the resources to automate shipping yourself, consider teaming up with an online-shipping organization that can. It could prove well worth the investment, and get your business some extra reach.

For information on how ubbe is helping modernize supply chain logistics and to learn our story, check out our about page.