(IMAGE SOURCE: Amazon Web Services)
The internet age has given us a lot of tools to do things more efficiently and offer better services, but the other side of this is that it has therefore changed the level of efficiency and service we expect. This is something that is hugely evident when you examine how supply chain management has evolved alongside things like ecommerce.
The shift in customer expectation
In the past, before things like cloud computing and SAP became the norm, people had the expectation that when they ordered something by phone or mail, there would be a fairly vague and possibly long lead time as dedicated staff working for the supplier each did their part in producing and shipping the item.
Now, people expect far more, and even custom products need to be produced and fulfilment completed within a short and clearly defined time span for a business to be able to meet the market's expectations.
Supply chain management used to be a concern for major global brands with channels to market all over the world, but now it is something even locally focused SMEs need to do well.
Of course, this only became the case because the tools at our disposal for supply chain management became sophisticated enough that high efficiency became not only the norm, but accessible to businesses at every level.
Reducing labour and increasing efficiency through IT
Over the past two decades, supply chain IT has evolved to the point where it can remove a lot of the work involved in processing, monitoring and recording steps in the chain. With cloud IT, orders can make their way to the right point in warehouses, and everything can be recorded, tracked and accounted for with virtually no input from staff or a physical paper trail. This removes a lot of the scope for human error, streamlines and expedites processes, and keeps costs down.
As the 'internet of things' – where machines and devices can be networked and communicate with each other – becomes more advanced, it becomes possible for many more elements of supply chain processes to be automated and managed remotely. This could result in even greater improvements in efficiency and cost effectiveness, as well as the potential for entirely new ways of doing things and new offerings for customers.
Another interesting side effect of the increased use of technology in supply chain management is that it has enabled some businesses to protect themselves from some of the volatility in the markets in recent years.
As seen in the US when manufacturing was hit by the 2007 economic crisis, clever use of the analysis capabilities technology has given us could help businesses tweak and streamline their efforts and respond to rapid changes in cost of materials, exchange rates when dealing with international trade, and other factors. Just as technology allows the average individual to effectively manage the share dealing involved with having an ISA, it can allow a business access to all kinds of helpful financial analytics.
Supply chain management is more sophisticated and complex than ever thanks to technology, and yet infinitely simpler to control, scale and adapt. It will be interesting to see how advancing developments in areas like driverless delivery go on to further impact the supply chain and logistics in the coming years.
Author: Ben Barlow