Supply chains are fast evolving, how can retailers adopt Critical Path Management to focus on the bigger picture?

10 Feb 2022 11:55 AM | Anonymous

by Aitor Marroquin, EV Cargo

Global supply chains continue to grow in depth and complexity at an unprecedented rate. Retailers are increasingly diversifying and de-risking their supply chains, changing traditional ‘East-West’ sourcing models into a more balanced strategy including near-shore production and mid-distance alternative markets. The continuing growth of omni-channel is also pushing retailers to re-think how to thrive in an industry where real-time stock availability and fast reaction times are now a must to remain competitive.

In addition to increased complexity, the industry is also facing exceptional levels of disruption. The impact of COVID-19 to supply chains has been evident and widely reported by mainstream media worldwide, affecting stock availability, shortages of production and shipping prices. However, while the pandemic has put supply chain on the map, disruptions in the industry are not new. Challenges such as port strikes, weather conditions, supply/demand space constraints and shortages of labour have been common over the last decade.

As a result, retailers are looking to review the level of control and visibility within their supply chains. A common challenge in the industry is simple to articulate, yet surprisingly difficult to overcome: the lack of a centralised and accurate ‘end to end’ view of the supply chain from product source to end customer. Retailers often use multiple systems and tools, spreading responsibilities across many departments, to track different stages of the supply chain. This practice runs the risk of creating disconnects and losing sight of the bigger picture. In order to achieve lead time reductions and flexibility, retailers are shifting their focus beyond just the movement of goods, by going upstream and aligning all processes involved in the product development lifecycle in to a single agreed critical path.

Coordination across activities, such as new product sourcing, new supplier/factory accreditation with ethical requirements, quality control, sample management, packaging and artwork sign off, packaging optimisation, is becoming a crucial step in order to establish a strong supply chain foundation.

Technology can help to tackle this challenge by providing collaborative, holistic and integrated solutions. Centralised platforms allow retailers to plan effectively and react to changes dynamically in an ever-evolving landscape. Effective and transparent critical path management provides a vital role from the moment a decision to source a SKU (when a SKU is added to a product range) until the point the product is in the customer’s hands. Having all parties collaborate on one platform following a standard process and working towards the same goal, gives retailers the best chance of not only meeting the pre-shipment product development lead time but also pushing towards an optimised and agile process.

Technology can help reduce time-consuming and costly data administration by connecting buying, sourcing, supplier, factory, 3rd party auditor, QC parties and logistics providers through data integration. Managing by exception, measuring against KPIs and using the power of predictive analytics to identify trends, provide the right tools for retailers to effectively manage their supply chains from beginning to end.    

Global retailers are already benefiting from using technology to manage their critical paths. Some of these benefits include 25% reduction in source to shelf lead time, 20% increase in productivity, and 15% improvement in on-time delivery. Retailers are finding significant opportunities by optimising upstream processes and saving time in the early stages of the product lifecycle.

However, the true potential is unlocked when origin processes are not only optimised but connected and integrated with the rest of the supply chain to provide true end to end visibility. As global supply chains continue to evolve, technology can provide the tools needed by retailers to both remain competitive, become agile and prepare for the uncertainties ahead.

About EV Cargo

Headquartered in Hong Kong, EV Cargo is a leading global freight forwarding, supply chain and technology services company with over $1.4bn in revenue. EV Cargo powers the global economy by managing supply chains for the world’s leading brands, with a vision to transform logistics into a technology industry.

EV Cargo was created in 2018 by Hong Kong-based growth-oriented private equity investment group EmergeVest, facilitating a step-change in value creation via a sizeable, scalable and diversified logistics-technology company, well-positioned for future growth. Now a global leader, EV Cargo is driving the transformation of logistics into a technology industry, underpinned by its core values of growth, innovation, and sustainability as a signatory to the UN Global Compact.

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