For many e-commerce businesses, Covid-19 threw a spotlight on faults in their supply chain. Consumer demand went through the roof just as factories closed and supply chain management faltered.
For logistics, a global pandemic is an extreme example of the type of issues that can put a hole through the best laid business plans causing logistics problems.
Supply Chain Threats
Threats come via a number of sources. International trade tensions can aggravate supply issues. For instance, the US-China trade war of 2018 resulted in over $750BN worth of additional tariffs between the two nations1. Extreme weather events in the Pacific and Atlantic basin can disrupt the supply of raw materials used in everyday products such as cell phones or the LEDs2, Showing how global trade can be disrupted for a number of reasons. Cyber security hacks are a growing threat with the cloud storage providers who may hold your company data under regular attack3. Even commonplace accidents such as a factory fire can stall production for weeks.
Visibility and Agility
The key to mitigating these risks is to utilize supply chains that provide you with two crucial components - visibility and agility. Or to put it more simply, the ability to see exactly what’s happening with your goods, and the ability to adapt or expand your means of delivery quickly if you need to, providing flexible delivery.
Let’s think about the supply chain to your customer for a moment. If you send goods across the international border (or more realistically in a connected world, across several borders) the probability that an external threat will jeopardize that delivery will increase. Weather events, road closures, traffic issues, even vehicle hijacking are all far more frequent than you might expect – certainly more usual than a global pandemic.
In 2015, David M Gilgor looked at the five dimensions of agility for the Supply Chain Quarterly*. The five metrics identified are:
Alertness. The ability to predict new trends by listening to customers and exchanging information with suppliers.
Accessibility. Access to the types of data that will help you decide how to act, shared via the supply chain - not just the IT department.
Decisiveness. Making decisions on how to respond to opportunities. As supply chains become more complex, agile decision making falters.
Speed. Delivering on a chosen course of action swiftly. Fast fashion houses, such as ASOS, rely on bringing new products online at speed.
Flexibility. Upscaling the way you operate, the markets you trade in or the service levels of your business partners to take advantage of opportunities.
Real Time Tracking
Real time shipment visibility is essential if you have eager customers to satisfy. The ability to see exactly where all your shipments are with up-to-date feedback on progress and potential hold-ups, such as provided by Parcel Connect’s eConnect system. This ensures that your supply chain is delivering as expected and allows you to keep track of products to identify where you could mitigate risk. This could be a factory shipment delay that might impact your production line, or a border issue that means you need to divert your package to keep on track for your customer.
Visibility becomes really powerful, however, when you have a supply chain that co-ordinates future-facing data. By taking intel from a network of partners and local operators, who can feedback on local issues, then collating that information so that it is fed back to you as a holistic overview allows you to anticipate problems before they arise. This makes the process a whole lot smoother for you – and the end recipient.
But what about agility in the last mile, that crucial end user experience that can make or break a company’s reputation? That’s when you, and more importantly, your customer, need choice. The choice to have their goods delivered to their home, or to a work place, or another address that’s more convenient for them, giving them several different delivery options. Maybe they will want their goods left with a neighbor or in a safe place. Or maybe they will prefer to have their new purchases delivered to a handy service point or locker where they can pick them up at a time that suits – with a signature on delivery for your peace of mind.
Flex and Scale Operations
But agility in the supply chain isn’t simply about avoiding hold-ups. It should offer you the opportunity to flex and scale your operations as your business increases in volume and markets. Many small and medium sized e-commerce merchants find that once they have established a solid supply chain in one trade lane, then they are ready to expand into others along the same route. This is where services like direct injection can reduce both transit times and delivery costs.
Direct injection enables you to bypass processes in the origin country such as pick-up, depot distribution and forwarding to the gateway. So for destination countries with the highest volumes, orders can be directly inserted into the network, while those countries where you have lower volumes still benefit from the standard networked solution. Customs can be cleared ahead and sorting reduced, resulting in a faster, more predictable movement and more competitive pricing. For an SME scaling up, direct injection is the way forward.
Sourcing the most agile supply chain can be a massive headache, especially if it involves co-ordinating with an array of different providers. Team up with Parcel Connect and you can enjoy all the flexibility and convenience you will ever need, with standard tools enhanced by bespoke services, designed for your future. If you’re ready for greater agility, speak to an e-commerce specialist today.