One often reads about the supply chain triangle; how an organization delivers services to its customers, by incurring certain costs while operating with a certain amount of cash. But, in terms of levers available to improve the performance of the supply chain, there are three prominent levers you can pull. These levers are reduction of expense, improved customer experience, and faster decision making. When you factor in the increasing speed of business, it becomes imperative that you make the right technology choices to adapt to today’s dynamic market conditions.
The first item, reducing expense, is most obvious. If you took a hard look at your inventory, you would probably see items that sit on the shelves for too long while you cannot keep up with the demand for others. When this is not balanced, working capital is tied up and your team is often forced to spend more time, fighting fires as opposed to adding real value.
The ability to reduce firefighting comes down to enhanced decision making. Too many supply chain leaders are overly reliant on outdated and complex excel macros. For predictable demand, this may be sufficient, but the modern supply chain is anything but predictable. This is why you keep hearing analysts talk about machine learning, AI, and cloud-based solutions. The raw power in these technologies provides a step-change in your capabilities. This is especially true for making real-time decisions, promotion planning, and asking “what-if” questions.
…and the question of “what-if” plays into the most delicate of actions. Balancing stock to service. At what cost are you willing to keep your customers happy? 99% service levels are possible if you are willing to overspend on inventory. But that cuts into profits and the ability to make strategic investments. If on the other hand, one sides on caution when it comes to inventory, they risk far-reaching negative Yelp reviews and a failure to meet SLAs. When you factor in the cost to acquire a customer, you are almost forced to maintain very high service levels. It is just too costly to lose a single customer.
Learn More: Machine Learning and Data Science – Tools of the Trade
The right technology can provide a solution to maintaining optimal supply chain planning, but the next question is how can you justify the investment? Improving your planning capability is not just an investment in technology, but also the time of your planning, IT, Finance, Sales, and Event Marketing teams. That is why so many take the static approach of “if it is not broken, why fix it”. The fear of the unknown makes us our own worst enemies. Fortunately, there are tools that can help you create a strong business case to justify moving forward with technology investment.
Swifcast by Arkieva is a free ROI calculation application. Swifcast is the only ROI tool that lets you load historical data and receive a forward-looking forecast in minutes. This forecast is actionable and will prove the business case for making the changes in technology. Better yet, it is powered by machine learning and not a bunch of unstable Excel macros. You can sign-up for Swifcast here or complete this form to speak with one of our ROI consultants.
