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Business Innovation

Data’s Impact on Supply Chain Resilience

Written By: Jake Rheude
September 21, 2022
6 min read

Data plays a vital role in ensuring the success and viability of businesses, and leaders in eCommerce and enterprise sales realize that this security extends to supply chain resilience. Companies with well-versed supply chain managers consistently use business intelligence to spot trends, adjust spending, and secure supply lines. The better they can trace data en route with packages, freight, and manufacturing, the less likely they are to be caught unaware or decimated by supply chain issues that seem to be growing more common.

If you’re in the supply chain space today, generating and sharing high-quality data with minimal noise is essential to building a safe, resilient operation.

Data Sharing for Greater Visibility

The simplest way to see data’s impact on supply chain resilience is to open any dashboard or tool you have. Then look at just the internal data you collect. This may move you upstream or downstream a few links, but not much beyond that. It’s very unlikely you’re generating your own private data two tiers up, for instance.

Data sharing through integrations and regular communication is how you create a vision of the supply chain across each arm. You need other-party data to see patterns. Learning about your partners and their supply chains gives you a better chance to protect yourself.

If you’re sourcing parts from two different suppliers, but they rely on the same single source for raw materials, you still have a single point of failure long-term. Work together to share and understand so you can identify global bottlenecks and start adjusting accordingly.

Flexibility in Problem-Solving

Supply chain data doesn’t eliminate all issues, but it impacts how you can respond. The complexity of covid and its disruption of imports, shipping lanes, and those last-mile deliveries are still being felt. The more information you’ve got at your fingertips around past models, current projections, and potential disruptions, the better you can create plans to address issues as they arise.

Information and its context give you two advantages in problem-solving efforts. First, data and consistent sharing speed up your ability to respond to issues that arise. For supply chains, this might mean identifying new sources for materials or shifting how goods arrive at your facilities. In the U.S., port congestion dominated the news, but now companies are facing significant issues with rail’s ability to move containers from ports to different regions. Data-sharing with importers and freight forwarders can help you identify that issue early on and work to secure alternative ways to move your goods inland.

These practices also translate into dynamic responses, such as sending a second shipment when a first is delayed or switching suppliers when a region or country enters a lockdown.

The second protection is your ability to model issues. Most demand forecasts using pre-pandemic data have been thrown out. However, analysis of supply chains during 2020 and 2021 can help companies identify potential bottlenecks and create plans to address them.

It can take months to create new relationships or find alternative sourcing. Start now so that they’re in place when the next thing breaks.

Improved Product and Material Protections

Data also enables companies to create protections at the shipment level. Reducing shrinkage across your supply chain, from transit to safety in warehouses and stockrooms, makes you more resilient by reducing expenses and optimizing resource utilization.

For products and raw materials, this starts at any point of packaging and preparation. For containers, pallets, and individual parcels, companies can adopt new IoT sensors to monitor sensitive elements such as temperature, moisture, and shock. Tracking items and pallets throughout the journey helps business monitor for spoilage and other issues that ruin products but aren’t as obvious as traditional damage.

That way you’re not selling bad items to customers or paying to store bad goods until the final QA check.

Information sharing is essential to success here. Your partners need to be aware of the systems for two reasons. First is that many tracking devices can now provide notices. So, a truck driver can be warned that goods are approaching their heat tolerance and then take steps to check refrigeration units or swap loads with an operational trailer. Second, this opens informatics and dashboards to simplify and speed up the identification of the responsible party. Disputes are resolved faster and more accurately, improving your ability to recoup some of the losses.

Protect the Customer Experience

The end consumer is a core part of your supply chain, no matter if you sell B2B, B2C, or both. Data analytics can bring in the customer’s perspective, allowing you to improve their experience with your brand.

Protecting the customer starts with production-level data. When analytics improves your ability to reliably source materials and products, you’re a safer and more reliable supplier for customers. You can be the brand they turn to time and again, enhancing loyalty and lifetime value.

The shift from just-in-time to just-in-case inventory management also uses data to protect your customer experience. Predicting demand curves and planning for longer lead times enables companies to shore up or reduce stock, as necessary. Surviving in troubled economic times often means slimming down goods that don’t sell as quickly or generate as high of margins.

Let data tell you when long-term storage pricing pushes your total landed cost for an SKU or order into negative territory.

If you’re working with a 3PL or have significant relationships with carriers, consider using your data to check their capabilities and customer satisfaction. This is like A/B testing you do in other areas, but it requires robust data management. You’re tracking customer complaints, returns, and replacements across many channels to see if delivery performance impacts satisfaction.

That’s a big lift, but eliminating a 1% or 2% return rate can become extremely valuable when you consider the costs of replacing goods, return shipping, labor spent on QA, repackaging costs, and more.

Creating the Big Picture

There’s a wealth of data out there, but it can be hard to understand and use. Supply chain management platforms can help you combine data from different systems for analysis and interpretation. There is functionality to track and improve reporting, enhance data accuracy, and generate actionable business intelligence.

The thing is that those are promises you cannot realize in a vacuum.

Building supply chain resilience through data means integrating multiple sources, collaborating with partners, and sharing what you know. Adjusting your forecasts based on diesel pricing, port congestion, carrier capacity crunches during peak, and general availability requires more data than any one company can source on its own. The big-picture approach is inherently collaborative.

So, the final aspect of building a data-driven supply chain is sharing. Data analytics platforms make it easy for your team to bring this all together and track patterns over time, better informing your next supply chain steps. Turning those recommendations into legitimate action requires you to share with partners, collaborate on what you can do versus what they can change, and build a roadmap to success together.

No link in a supply chain grows or shrinks without the rest. Share your growth opportunities so that partners do the same, and you’re all better able to weather what comes next.

Jake Rheude
Written By: Jake Rheude

Jake Rheude is the Vice President of Marketing for Red Stag Fulfillment, an eCommerce fulfillment warehouse that was born out of eCommerce. He has years of experience in eCommerce and business development. In his free time, Jake enjoys reading about business and sharing his own experience with others.

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