Today’s priorities for supply chain leaders

Over the last three years, the main focus for many supply chain leaders has been resiliency. Disruptions have been rife, with the chain of events starting with the COVID-19 pandemic, continuing with the blockage of the Suez Canal and the Russian invasion of Ukraine, and leading to the impacts of the Red Sea attacks this year.

Resilience can mean different things, from the ability to continue buying inventory and delivering products to schedule, to simply maintaining profit margins. Ultimately, it is about being able to adapt quickly to unforeseen challenges.

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A key takeaway from the supply chain disruptions is that the backbone of business resiliency is cost management. At the start of the pandemic, transportation costs increased dramatically, and shippers were buying inventories wherever they could find them. US business logistics costs rose by a record 19.6 percent in 2022, and half of that increase was due to inventory carrying costs.

To remain successful, logistics decision-makers must prioritize both resiliency and cost management. The former means being dynamic and agile, requiring connectedness and real-time data. The latter means reducing expenditure, as high inventory levels and fulfillment & transportation costs could otherwise dent profitability. This is where a unified supply chain helps.

What is a unified supply chain?

Traditionally, in supply chains, transportation and distribution have been managed separately. This siloed approach often led to inefficiencies and missed opportunities for optimization across the entire network. A unified supply chain is an integrated approach to managing all its aspects, from sourcing raw materials to delivering finished products. Components such as distribution, transportation, labor management, and automation work as a cohesive system, usually through a single app. This enables real-time visibility and collaboration across the supply chain network, eliminating silos and redundancy.

At a software level, the Transport Management System (TMS) needs to be connected to the Yard and Warehouse Management System (WMS) to improve operational efficiency. Managers can quickly and easily add capacity, adjust labor to match inbound arrivals, and change orders up to the point that a truck leaves the depot. Such integration streamlines operations, reduces costs, and enhances agility, allowing companies to react quickly to changing market conditions and customer demands.

The benefits of bringing the TMS and WMS together

To achieve a unified supply chain, companies invest in cloud-native software-as-a-service (SaaS) applications, best built from microservices to enable easy integration and scalability. By adopting adaptable and boundary-less solutions, organizations can ensure rapid innovation, personalized customization, and enhanced connectivity across all supply chain functions.

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However, according to a recent McKinsey study, logistics leaders have significant concerns regarding technology investment, mostly surrounding the cost of the solution and the impact of change management. Businesses ideally want to lower their total vendor footprint and tech TCO while still boosting their ROI. While these goals may seem at odds with each other, a unified supply chain can ultimately work to achieve them these goals.

A unified supply chain consolidates disparate systems, such as distribution and transport management into a single, integrated solution. Without the need for specialized software for each function, businesses significantly reduce their vendor footprint. This streamlining simplifies technology management and lowers the TCO associated with licensing, maintenance, and support.

Another key characteristic of the unified supply chain is its ease of implementation and adoption compared to traditional, siloed systems. A solution that can be up and running quickly reduces the time-to-value and increases the ROI. Moreover, this lowers support costs by minimizing the need for customization and integration.

Consider Manhattan Active

Manhattan, a leading provider of supply chain management solutions, is the only vendor of a unified supply chain offering. The Manhattan Active Platform gives managers total control over adjuestments for supply, demand, resources, and shipment variations, allowing them to think in terms of inbound and outbound rather than WMS and TMS.

With the platform’s microservices-based architecture and API-first approach, organizations can easily integrate and customize their solution, reducing implementation time and costs. Manhattan Active supports various developmental approaches, including low-code, no-code, and custom coding, enabling IT teams to tailor solutions precisely to their requirements with minimum dependency on external vendors.

Instead of high-cost development to alter monolithic applications, internal teams can easily tune the platform to suit end-users’ requirements quickly and iterate on improvements according to need. And because the platform is cloud-based, core functionality is not affected.

By leveraging computational and behavioral intelligence, the platform optimizes decision-making processes and workforce productivity, ultimately driving cost savings and revenue growth. Manhattan’s cloud-native SaaS model eliminates the need for on-premises infrastructure, reducing maintenance and support costs while increasing scalability and accessibility. Continuous updates every 90 days ensure access to the latest capabilities without additional investment.

To learn more about how bringing together your TMS and WMS into a unified supply chain could transform your business, contact the expert Manhattan team today.

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It has not been smooth sailing in recent years for the UK’s distribution, logistics and manufacturing sectors. After taking a significant hit during the pandemic, consumer spending and business activity bounced back with such a velocity that demand vastly exceeded supply, leading to supply chain disruptions. Industry leaders like Amazon made substantial investments in technological solutions to bolster efficiency during the COVID-19 pandemic. These further elevated customer expectations, including the demand for same-day order and delivery services.

The distribution, logistics and manufacturing sectors must also tackle supply chain issues brought on by the Russian invasion of Ukraine and the UK’s departure from the EU, renewed climate goals, smooth integration of IoT devices and other technological advancements, as well as labour shortages. A recent study from business advisory firm BDO found that 77 per cent of mid-sized businesses face persistent supply chain disruptions thanks to these challenges. Indeed, research from Make UK found that supply chain pressures will likely continue impacting businesses into 2024.

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Supply chain disruptions have significant consequences, causing delays, increased expenses, inventory shortages and customer dissatisfaction. Inflation can have a similar negative impact, which was at 6.7 per cent in September and is not expected to return to ‘normal’ levels until 2025. It directly drives up prices of materials, labour and transportation required for manufacturing, shipping and storing goods. When this price hike is reflected in the cost of the goods, demand slows, starting a vicious cycle of financial loss. According to a report from Extensiv, 92 per cent of transportation, supply chain and logistics stakeholders claimed that inflation negatively affected their business in 2022.

The need for an agile and responsive supply chain is, therefore, more pressing than ever. The logistics industry is experiencing increased demand for quick insights and innovative solutions to navigate supply chain disruptions and fluctuating consumer preferences

One way of giving a distribution, manufacturing or logistics business the best chance of withstanding difficult conditions is by transitioning to cloud technology. Here, data and applications are hosted on remote servers accessible via the internet. Cloud technology offers scalable, powerful compute and storage, and real-time data access, empowering manufacturers with comprehensive supply chain visibility. By centralising data, companies can rapidly collect, analyse and make informed decisions to mitigate risks and pre-empt disruptions.

The cloud works to improve manufacturing processes, inventory management and distribution efficiency, all without complex infrastructure management associated with legacy, on-premise solutions.

A key characteristic of cloud solutions is their adaptability and scalability. As cloud providers offer Software as a Service (SaaS), they can tailor their offerings to meet specific needs, allowing organisations to engage with shifting demands more effectively. This agility is crucial to maintaining an efficient supply chain when disruptions arise. It is also cost-effective, allowing for a flexible pay-as-you-go model that scales resources as needed.

Real-time insights gained through cloud platforms empower companies to make informed decisions on the fly. This ensures optimised production, inventory levels and distribution strategies, and reduces the risk of overstock or stockouts. Enhanced data security is another critical benefit, with cloud providers offering robust protection against breaches which provides peace of mind.

Cloud-based analytics offer better understanding of customer preferences and market trends, enabling rapid responses and improved customer satisfaction. Improved collaboration is also fostered across the supply chain as stakeholders can more easily publish and share data regarding, for example, procurement and order management. In essence, cloud technology paves the way for cost-effective, secure and collaborative solutions, optimising the supply chain while also fortifying it against disruptions.

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Adrian West, the VP of Distribution/Logistics and Manufacturing at Advanced, said:

“Supply chain disruptions have underscored the importance of agility and responsiveness in our sector. Transitioning to cloud technology is key, offering real-time data access and comprehensive supply chain visibility. This enables us to make swift, informed decisions, optimising our processes and meeting shifting demands effectively. It’s not just about weathering the storm; it’s about steering our course through it with confidence and resilience.”

Since the boom in e-commerce brought on by the pandemic, cloud adoption in the Distribution and Manufacturing  sectors has been increasing. Ofcom estimates that between 2019 and 2022, UK revenues for cloud infrastructure grew by 35 to 40 per cent each year. Additionally, Data Bridge Market Research forecasts that the global cloud supply chain management market will reach £58.53 billion by 2030. Technology will enable more widespread use of self-driving trucks, autonomous cargo drones and smart factories. The latter are facilities that leverage IoT sensors, data analytics and cloud computing to monitor and control manufacturing processes in real-time. Gartner suggests that, by 2026, 75 per cent of enterprises will have adopted some form of intralogistics smart robots into warehouse operations.

Choosing the correct SaaS provider is essential for the successful cloud transformation of any distribution and manufacturing  business. Doing so will help mitigate common hurdles relating to integrating new systems with old, skills shortages and set-up expenses. Cloud technology can be incorporated smoothly into a business’ operations with the help of a trusted, experienced provider like Advanced.

Advanced provides back-office software tailored to the manufacturing and distribution/logistics industries that generates tangible results. Every year, employees in these sectors save over 750,000 hours through automation and reduced manual input enabled by Advanced’s back-office software tailored for the manufacturing and distribution/logistics industries. Find out how to kick-start your cloud transition by contacting Advanced’s expert team today.

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