Today’s distribution centers are key to a successful supply chain management strategy, requiring a balance between storage and product movement that can be tricky to achieve in today’s on-demand environment, according to a logistics and supply chain management expert.
In a recent Digital Supply Chain column, Thomas Chanel, founder and CEO of CATTAN Services Group, points out today’s distribution centers are more complex than ever, yet companies expect an unprecedented level of agility and responsiveness.
On the one hand, there’s the complexity. Where there used to be four broad types of operations, there are now 12, according to a logistics and supply chain management, he writes. Distribution centers have to manage a wider range of line items or SKUs for any given. There are tight inventory cost restraints right now, rising freights and volatile energy costs, he writes.
But at the same time, companies demand agility in response to e-commerce orders, which may mean packing up an order from various SKUs. Order cycles are shorter, and there’s a focus on “pull don’t push” or “on-demand” ordering and planning, he points out.
“If such resiliency is to be exercised and exploited, companies must have adequate control and visibility of both its supply and demand chain,” Thomas writes. “To do that, sound distribution logistics decisions must form the foundation for the development of strategic flexibility and responsiveness at the DC level.”
There’s really only one option if you’re dealing with complexity while demanding agility: Automation of supply chain management.
But it’s not enough to just add supply chain management software. Let’s look at some of the other technologies that can help you manage complexity while remaining flexible and responsive:
- B2B Gateway software built on a foundation of service-oriented architecture, which will allow you to share information with key suppliers and business partners. Why a SOA-foundation? So the software can be updated or rolled out quickly to new partners.
- Support for RFID or other sensors to monitor product levels.
- An integration layer to connect all the data about supplier, parts, product and customers from any system. End-to-end integration is particularly important if you want to improve transportation management.
- Master data management to help ensure that data is correct and governed by the appropriate people throughout the supply chain.