Understanding the Impact of Higher Interest Rates on Global Supply Chains
Before the COVID-19 pandemic, supply chain resiliency had not truly been tested on an international scale. Researchers understood how supply chains could be disrupted by shocks to the system, such as natural disasters, but impacts in those cases were regional, rather than global.
Facing globalization, increased product complexity, and heightened customer demands, companies are taking up advanced technologies to transform their supply chain from a pure operations hub into the epicenter of business innovation.
Accenture found that 94 percent of Fortune 500 companies are seeing disruptions. In July 2020, the Institute For Supply Management (ISM) revealed that 97 percent of survey respondents' operations have been or will be impacted. As COVID-19 continues to shape the definition of supply chain resiliency, organizations must factor in geographic diversification, end-to-end transparency, and the need to create surplus capacity for moving everything from raw materials to finished goods.1
Supply Chain Technology
Today’s competitive marketplace means there’s less room for inefficiency, but the good news is supply chain technology can simplify and optimize your business processes. That’s why it’s imperative for companies to continually innovate and streamline their supply chain, and software likely provides the greatest bang for the buck.
The right service supply chain technology enables your company to create greater visibility within your supply chain, gain more control over your inventory, reduce operating costs, and, ultimately, outpace the competition.2
As demand continues to evolve in an increasingly globalized world, supply chains will become an even more crucial part of business success.
Here are five ways to use technology to build a better supply chain for your firm.31. Real-time, Actionable Data
In order to service customers, you need real-time inventory data at your fingertips that is accurate and actionable, no matter where the part is located worldwide.
Radio Frequency Identification (RFID) chips, barcodes, and scanners are vital pieces of equipment that can provide innumerable benefits to your business. For example, RFID chips or barcodes can be placed on every product, which gives your company a way to easily track inventory.
With computerized product management, RFID chips and a barcode system provide increased visibility that can substantially improve your supply chain efficiency by detecting any order anomalies as they occur — enabling employees to immediately correct mistakes and reduce errors. Such technology also allows for easier, more consistent tracking throughout your supply chain, giving you maximum control and visibility over parts, whether those are motherboards or processors.
Knowing what you have and where it’s located leads to supply chain efficiencies and lower operating costs.
2. Enhancing End-to-End Visibility
Enhanced transparency enables organizations to better assess their supply chains to meet supply and demand, and make data readily available to all stakeholders so that they can do the same. To achieve true visibility, organizations must audit their own systems to identify where upgrades or add-ons can be deployed, and collaborate with vendors, establishing a culture of trust and highlighting the mutual benefits of working more closely together.
By using sensor technologies, like RFID chips coupled with internet connectivity, companies can collect data at every logistics checkpoint, from raw materials to delivery of finished goods. This improved real-time transparency, signaling, and response ensure that inventory levels are always current, improving capital and time management so that products and services are delivered to the end customer on time. This ability also helps eliminate misplaced inventory and shipments, reducing revenue loss.
Such supply chain management technologies make it easy to greatly reduce the time spent shipping, receiving, tracking, and compiling order data. This can save your company both time and money.
Last but not least, enhanced data availability makes it easier to produce customized reports and auto-generated reports that help your customers and you better understand where opportunities for improvement lie.
3. Diversify Portfolio of Suppliers and Vendors
Finding partners, suppliers, and vendors in multiple markets enhances a company's ability to withstand supply chain disruption on both a local and global scale. Consumers increasingly prefer to “shop small" and patronize community businesses; in turn, these small, more agile outfits can complete jobs more quickly. Third-party platforms that analyze system diversity can help businesses identify and vet potential suppliers and the efficacy of new contracts and purchases, and ensure any time-sensitive decisions can be made in line with their procurement strategy. They can also integrate communications in one place, to foster relationships and greater connectivity between supply chain partners.
Investing in supply chain technology helps your company simplify its supply chain, eliminate unnecessary links, improve efficiency and reduce expenditures.
Optimizing the number of links in your supply chain will also enable you to lower the risks associated with shipping and receiving. For instance, you may find you can decrease the number of vendors for a particular part to two or three companies rather than five or six, and still meet your company’s service obligations and mitigate your risk around unpredictable events, such as natural disasters or a potential trade war.
Customers turn away from businesses that routinely have shipping delays, shipping errors, and products that are out of stock. Enhancing your supply chain technology can minimize risk and improve your company’s reputation within the industry.
4. Enhance Customer Communication
Creating predictability, consistency, and visibility within your service supply chain enables your business to communicate faster and more efficiently with customers. Ideally, your supply chain technology will give you immediate access to all the real-time, actionable information you need, such as:
(i) Parts order tracking
(ii) FSL location map
(iii) Location of specific parts availability globally
(iv) Location of parts nearest the customer
(v) Tracking field tech support personnel
Social media is also another communication tool available to add to your supply chain arsenal. You can use social media accounts to interact with customers, respond to questions, report accidents or weather conditions that may impede delivery or service schedules, and create automated updates about your inventory.
Social media can also increase the visibility of your company and improve demand for your products and services.
5. Forecasting Future Demand
There are different demand forecasting models that companies can utilize to leverage their data and analytics for specific periods of time. These include macro-level forecasting (for broad disruptions in commerce), micro-level forecasting (specifically for particular businesses, industries, and customer segments), short-term forecasting (for a period of fewer than 12 months), and long-term forecasting (for a period of time greater than a year).4
Regardless of which model is employed, companies will have the capability to accurately forecast demand for the foreseeable future. After collecting and evaluating data, companies can pinpoint weaknesses in their supply chain and make improvements where needed. This includes identifying budgetary cost-cutting opportunities and setting objectives to mitigate supply chain errors.
By accurately forecasting future demand and managing inventory accordingly, companies can greatly reduce disruptions within the supply chain and ensure a seamless experience for clients, which can ultimately help boost retention rates. Since consumer demand is the lifeblood of any business, accurately forecasting future demand can be essential.
To stay ahead of your competition, it’s essential you continually adapt to emerging tools. Supply chain technology can greatly enhance your productivity as a company by helping you cut costs and improve customer satisfaction. Businesses must continue to strategize and adapt as the pandemic continues to unfold. Implementing a diversified supply chain that is both predictive, proactive and responsive will help to ensure companies not only survive but thrive, in a post-COVID-19 world.
About Exporta Technologies
Exporta Wholesale is the largest marketplace connecting suppliers in Latin America with buyers in North America. Today, we have a network of over 5,000 Latin American suppliers serving a variety of consumer goods and product categories in the United States.
Exporta’s marketplace offers buyers a full-service experience in the origination, sourcing, and managing of products. The platform was founded on the idea that curation and service are the most important elements in the buyer’s journey. Exporta’s marketplace is building technology that addresses the pains of sourcing products internationally at attractive prices.