A clearer understanding of inventory lets companies allocate products to warehouse locations .
This reduces delivery time , improves customer satisfaction , lowers delivery costs , and increases sales and revenue improvements . working from imperfect information , companies can make errors that lead to consequences upstream or downstream .
One change that ’ s gaining traction is a focus on rightsizing inventory to avoid shortages and massive surpluses . Some companies are shifting their focus to create the optimal supply chain flow to meet customer demand despite volatility . One company working to optimize its inventory and improve its supply chain modeling is Coupa customer Nestlé .
Nestlé USA recognized a need for inventory optimization due to misalignment , poor data quality , and the challenges of rising transportation costs . They partnered with Coupa to take an analytical , data-driven approach to assess replenishment lead time , adjust forecasts , and improve data quality . This involved network modeling , scenario planning , and continuous design , resulting in reduced lead times , optimized safety stock , significant cost savings , and greater agility .
Agility is also a key requirement for the lastmile . Balancing the customer requirement of “ get me my product as soon as possible ” with minimizing the working capital tied up with inventory is a tough challenge . Supply chain design plays a crucial role in identifying the location of new warehouses ( including pop-up warehouses ) based on customer proximity , ultimately helping achieve that desired balance .
New technology is essential for navigating disruption
When it comes to AI in logistics , the first thing that comes to mind is robots . We won ’ t get into the debate about whether robots will take over the world , but what is undeniable is the critical role that AI can play in improving overall supply chain functionality and resilience .
There are several new technologies that companies are embracing as they look to optimize their supply chains , shave down costs , and manage the variety of different challenges the industry faces . Several of these technologies are also critical tools in improving productivity and helping relieve some of the stress placed on supply chain employees .
In the physical realm , investments in warehouse automation and smart ( AI-powered ) robotics are increasing labor productivity . They can relieve human workers of repetitive and physically demanding tasks , often helping with employee retention , but it is not without its challenges .
fall 2023 I customized logistics & delivery Magazine 27