By John Andrew Shawyer, director, Associated Pallets Ltd.
During 2013, global businesses saw a number of disruptions caused to their supply chain. Everything from factory disasters to ethical problems had an impact on the supply of goods across the world. These can all affect businesses both financially and on a reputational level. With 2014 well under way, what are the potential trends for this year within the global supply chain?
As companies saw from last year, there is always the potential for the supply chain to be disrupted. Companies can't plan for every eventuality, such as a decline in the number of pallets for sale, but they can be better prepared when incidents occur. By having a good risk-management strategy in place, they can reduce the impact of these problems and effectively work around them. This will enable businesses to continue to meet the demands and expectations of their customers, whatever challenges are thrown at them.
Use of Data Analysis
By effectively using the right data, businesses can understand their requirements more efficiently. They can start to look at predicting what their customers will be ordering and when, enabling them to better manage their manufacturing and production sites. This will make the process much more effective and less open to disruption caused by problems outside of their control. During 2014, businesses will look to move away from using data purely for customer service, sales and marketing reasons. They will start to consider supply chain issues, including risk management, inventory management, how many pallets they have and procurement.
Moving Operational Bases
A few years ago the trend within manufacturing was to move sites abroad, with many companies relocating them to Asia and South America. This was mainly done to achieve a more cost-effective approach, as the labour in these countries was found to be cheaper and more flexible than in Western nations. However, we are now starting to see a trend for companies to move bases closer to home as global wages start to standardise. As the cost of labour becomes less of a factor and the use of technology makes it easier to have multiple operational sites, companies are favouring the trend of 'reshoring'. By having their production facilities closer to home, they are less likely to face global challenges, from natural disasters to freight issues.
The majority of businesses, especially those that are customer-focussed, rely heavily on having a fast and efficient distribution process. Often this is difficult to achieve on their own if they don't have the warehousing and transportation facilities. Investing in these could be beyond their means, but not doing so could impact on the growth potential of the business. However, there are now a growing number of specialist logistic businesses that operate for this reason. They have the ability to help retailers quickly fulfil their orders without the large-scale investment that would traditionally have been required. In 2014, companies will look to more effectively forecast their ordering schedules, which will help to reduce the cost of deliveries even further.
Supply chain management will never be an exact science. There will always be issues that companies face. However, it is how they manage these problems that will dictate how successful a business they become.