Logistics revolution

Has just-in-time logistics reached its expiry date? Daniel Kohut, Senior Solutions Advisor at Blue Yonder, says businesses can still reap the benefits of running a just-in-time operation if they better utilise data and artificial intelligence. J ust-in-time (JIT) logistics no need to have unsold inventory business. If it gets past its freshness management has been highly taking up valuable warehouse space. date, you have a problem.” regarded as an advanced Leading companies, such as Apple and The JIT methodology requires inventory management technique, Kellogg’s, have adopted this method businesses to be extremely agile designed to increase efficiency, cut to improve cash-flow and maintain with the capability to handle a much costs and decrease waste by receiving efficient inventory levels. Tim Cook, shorter production cycle. Following goods only as they are needed. CEO of Apple, famously said, “Inventory unprecedented demand and record

With inventory purchased or is fundamentally evil. You kind of want e-commerce order fulfillments produced at short notice there’s to manage it like you’re in the dairy across the globe during the recent

COVID-19 pandemic, some businesses have identified flaws in JIT logistics management.

Daniel Kohut, senior solutions advisor at Blue Yonder, says traditional JIT methodology has shifted following retailers’ problems with order fulfillment due to the COVID-19 pandemic. He says it’s more essential than ever to have accurate demand forecasts and insights into customers’ buying habits as miscalculation could have a significant negative impact on business operations. Despite the challenging climate and unpredicted demand, Daniel believes data is the key to protect profit and regain flawless Just-in-time (JIT) logistics management. In addition, while every company has access to large volumes of information, there is one thing that separates the leaders from the followers: the ability to apply that data strategically.

RADICAL SHIFT

Logistic and e-commerce companies are facing an era of unprecedented change, as well as demand. Digitalisation is evolving customer expectations and companies need to embrace changes in the industry.

Daniel says every company needs to change the way they’re doing business today. “Whether you’re a retailer, manufacturer or 3PL, in the encompassing of supply chain networks, it’s of value to recognise the need to make a radical shift and adopt new market models,” he says.

New technologies are enabling greater efficiency and more collaborative operating models; they’re also re-shaping the marketplace in ways that are only just beginning to become apparent. Advanced analytics and algorithms are proving essential to separating critical facts from trivial information, and then translating that key data into decisions that support pre-defined strategic goals. While every company is applying data in some way, the leaders of the digital revolution are leveraging it for toplevel strategic impact.

With so many technologies competing for management attention and investment, defining a clear digital strategy that’s integrated into business strategy is now even more critical. “Software is changing agility in the supply chain, and more importantly, driving change to protect profit margins,” he says.

Daniel says the need to integrate data analytics and social supply chains to provide much better traceability and predictability is impacting transportation and logistics. Shippers aren’t generally part of a branded retail experience. Most private endconsumers are what we call ‘shipperagnostic’ meaning they don’t care who delivers their goods, as long as they get them reliably, quickly and cheaply.

Consumers want more flexible delivery, expect faster time-to-market, reduced defect rates and customised products. They expect to pay the same price for shipping regardless of capacity constraints faced by their shipper. That’s why digital convergence is a must for every logistics company, Daniel says.

“Cloud technology can enable platform solutions, which in turns makes it possible to use new business models, to provide flexibility and scalability as well as standardised

and harmonised processes across the whole organisation,” he says.

Gathered, analysed and applied strategically, data is the foundation of success in today’s digital, connected, fast-moving business world. Daniel says if your digitalisation strategy isn’t aimed at using real-time data to support top-level, strategic decision making, then you are missing one of the most crucial opportunities presented by digitalisation.

BEYOND JUST-IN-TIME

Daniel says his team, who provide expert advice in the field, are noticing the stages of software onsets throughout the supply chain sector. Companies in the supply chain space are looking for alternate methods for cheaper and faster solutions and software is being developed in depth to heighten business capabilities.

There is no other industry where so many industry experts ascribe a high importance to data and analytics in the next five years than transportation

Data is the foundation of success in today’s digital, connected, fast-moving business world.

and logistics. Daniel says there are vast opportunities to improve performance and serve customers better when part of a digitally integrated supply chain. Utilising machine learning and artificial intelligence techniques to data analytics can deliver truly dynamic routing, he adds.

“Now is the time to go beyond JIT, it’s about getting more insight into what is available across the market at any point of time, especially in relation to inventory management,” Daniel says. He thinks a lot of consumers and companies are in a state of flux; however, no matter the situation or role in the supply chain, people always want to have access to more accurate information regarding traceability and accountability.

“The speed of change is the major factor causing disruption in the supply chain, the way the economy is changing and the expectation for data to respond to that change,” Daniel says.

With any type of information, it’s about making improved decisions as the supply chain continues. He says that’s why real time visibility is transforming logistic management.

Using a hypothetical example, Daniel shares that if he made an online order on Tuesday and expects it by Thursday, as a consumer he wants some form of predictability whether those goods or services will be achieved by the expected date.

“There may be 100 steps involved, from order distribution to transportation to my door. Therefore, artificial intelligence (AI) and machine learning is a vital tool in digestion of digital information in the supply chain sector, and companies need to start preparing for future outcomes from predictability software,” Daniel says.

To put this into further context, Daniel says, a grocery sector’s software system can predict the weather in a certain city will be 32 degrees in two days. Based on its accumulated data, the company’s software system would know cold beverage sales are heightened on hot weather days, which allows JIT solutions to be more proactive to allow technology

to respond to anticipated demands.

“The more data companies have, the bigger the opportunity to start applying more advanced AL to start predicting more accurate outcomes, and then start driving more evidence-based business making decisions at an expedited rate,” Daniel says.

DYNAMIC CHANNELS

The rate of adoption of any automated solutions is not limited by its technical advancement rate. Instead it will be driven by the rates of regulatory and customer acceptance as data traceability reaches new levels of sophistication.

“We’re seeing a shift in demand from traditional JIT methods to new channels that are more logical depending on the marketplace that is changing the expectations of universal delivery times,” Daniel says. He has been pleased to see more companies across multiple divisions joining the wider conversation of data management.

“The emphasis on technology has definitely shifted, the adoption rate has rapidly increased towards software as a primary enabler in a supply chain network,” Daniel says. Blue

“Now is the time to go beyond JIT, it’s about getting more insight into what is available across the market at any point of time, especially in relation to inventory management . ”

Yonder’s customers in Australia include some of the country’s largest grocers, third party logistics operators and manufacturers. “We’re even seeing more customers come to our team to leverage analytics and machine learning,” he says.

Blue Yonder’s company mission is to power and fulfil and it has fully embraced the move to the cloud. He says that Blue Yonder’s competitive advantage is utilising software-as-a-service (SaaS) to power digital transformation, allowing its clients to be more agile in their respective markets.

“Our research shows that due to current disruption in the market, more customers are looking at its network in a holistic manner, moving into a global view of services,” he says. Daniel stresses the importance in developing technology and software to harmonise data.

“There are still a lot of digital opportunities for companies to adopt. To connect the entire system of providers in a supply chain network, whether that be within Australia or the inbound route, right through to the global service offering, operations have the ability to be further advanced,” Daniel says. ■

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