by Bill Branit
Right now, there is a certain kind of customer who would love it if you could deliver a single tube of toothpaste to their front door before they go to bed that night. While you might not be the company to make such a granular delivery in a short time, one of your competitors is. Chances are this is a challenge you’re already facing with your distribution service, but what should really keep you up at night is the rise of technologies like smart sensors and predictive AI that will initiate the toothpaste order before the customer has even asked for it.
This level of technology, and product delivery, is right around the corner. Customers will demand it, producers will want to capitalize on the market, and you - the distributor - are in the middle trying to find ways to keep up.
When these changes happen, will you keep up? Better yet, are you equipped to get ahead of the competition by staying flexible enough for the next ten or 100 changes thrown your way?
Regardless of what the headlines say, there is nothing new about "supply chain issues."
Logistics and distribution companies are in the business of resolving a perpetual cycle of these "issues" to keep products moving and businesses thriving. Raw materials get stuck behind a political border, an order quantity is overpromised, or millions of dollars of inventory might be stuck at the bottom of a pile of shipping containers at a port on the other side of the world.
At least, you think that's where your inventory is.
Every day, global distribution systems are becoming more intricate on every level. Two-day shipping is the expected norm (and it must be free!). Fast fashion companies have to produce the right sizes and colors of new designs on an almost-bespoke basis to keep up with the swiftly passing fads and trends. Meanwhile, other companies are cutting their prices to below cost just so they can move inventory that is approaching its expiration date.
And yes, even with all of these challenges, the $6 toothpaste needs to arrive by 7 PM.
Inventory management and distribution is nothing new, but the scale has changed considerably over the last several decades. There are more players and moving parts, each with their own demands and operations that require absolute attention to detail - to speed, availability, and communicating records and orders. Keeping up with today often means exhausting the resources you could use to develop preventative and responsive measures.
This is where Nextworld comes in. Supply chain issues are all about perspective, and Nextworld chooses to see these issues as a way to ensure every link is as strong as it can be. When the market changes, are you equipped to change with it?
You either bend, or you break. Zara - a world-renowned fashion brand - takes an agile approach to the shifting marketing demands. By implementing a composable distribution model, Zara can keep a flexible supply chain that can respond to conflicts in real-time. Zara isn't just design, they keep production, distribution, and marketing as closely connected and share data in real-time.
Thanks to this model, Zara can produce limited runs that routinely satisfy customer demands.
As a business that leverages distribution, Zara's job is to solve the same problem a thousand different ways. The flexibility is what lets them solve different problems with the same solution. Because they can reduce efficiency leaks, their team can apply more efforts to developing future opportunities instead of persistently resolving the current crisis.
Warehousing is expensive. Raw material inventory is sitting money. The window between supply and demand can span years, or it can close in an instant. In the last year, there is an estimated $163 billion in inventory that is abandoned, written off, or lost simply because the consumer moved on before their demands were met. Now, warehousing costs are soaring and overproduction is eating margins.
How quickly could you turn this into an opportunity?
What if you turned from just distribution to pack-and-hold or cold storage? Or if you could start production only after you were certain of the customer's expectation? Toyota and Dell are long famous for employing the Just In Time model to their factory floor, waiting for the orders before the raw materials were delivered to the production site.
For every business, a different model. But throughout the industry of distribution, we see trendy business models come and go and change on a dime. The only constant is change, and tomorrow will likely shift to a new trend because that’s how your competitors stay afloat.
Whether you choose to shift with them, or set a new trend they have to follow, Nextworld is the platform that makes it possible to assemble the data you need to make the most of your assets and maximize your margins. From how information is collected to how it is distributed and analyzed, data is the essential tool your team needs to make on-the-spot decisions that keep you moving forward. Order less and sell more, reduce delivery times and warehousing costs. When you can see the customer trends, you can commit less of your cash flow to inventory that could just sit in a warehouse.
How quickly can you take advantage of a business-altering opportunity? If a retailer said "we will only accept your consumable goods if they still have 50% of their shelf life on the sell-by label." How long would it take to get this specific inventory on a truck or listed on their website?
Or, do you first have to go through a pile of information to figure out what the shelf life is, which lots meet the criteria, and where they are located? Opportunities come with criteria for SKU information, receiving invoices, and sales reporting protocols - how quickly can you meet the retailer's demands?
It is easy to overcomplicate things, especially when the future is so unpredictable. The structure you build today might be obsolete by tomorrow. Coding new systems to incorporate new databases, or pulling in quick-fix point solutions can be costly and difficult to change when new variables inevitably show up.
If you find that new business opportunities or customer demands pile up faster than you can address them, this could be the time to make a change. Nextworld was designed to proactively support business agility with composable enterprise solutions. Nextworld’s applications work with your existing data systems to support an incremental approach to digital transformation that ensures fast results and encourages your organization to tackle it’s most pressing challenges first. Get the most out of your business, your product, and your team without exhausting your resources.
