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Today, businesses are looking at all angles for improving efficiency and flexibility in serving their customers' fluctuating demands. With profitability and service level commitments top of mind, they weigh options for everything from e-commerce engagement to inventory and channel cost strategies like ship-to-store, JIT (just-in-time) and direct-to-customer shipping. Some are taking the costly approach of playing out possibilities by trial and error. Conversely, companies that recognize the value of data insight are choosing to use supply-chain analysis and optimization to illuminate the best options for facility locations, sourcing contracts, inventory policies, transportation goals and other elements critical to strategic decisions aimed at growing the business enterprise. A lot of those companies are engaging traditional consulting firms to achieve the level of supply-chain expertise needed to collect and effectively analyze data essential to those decisions.
In the years ahead, expect more companies to challenge long-accepted retail paradigms by opting out of capital investments — like brick-and-mortar facilities — that tie them to long-term business strategies and jeopardize their ability to adapt quickly. Instead, more companies will partner with third-party providers to find flexible solutions that aren’t as capital intensive but that still deliver desired customer service levels. With the ability to reengineer their supply-chain network to accommodate the state of flux in the market, these companies will be positioned to adjust at the rate of change.
As the speed of change accelerates into a new decade, competition to meet demand among national parcel carriers and e-commerce giant Amazon will continue to compress customers’ desired response times. The quickest companies to adjust are best positioned to achieve long-term success. Ultimately, equilibrium will occur between e-commerce and brick and mortar sales; however, based on consumer demand, retail locations could change significantly in form and function.
Beyond 2020, as data scientists push the limits with new technology, there is potential for automation of network design and optimization, potentially reducing the need for a human interface and allowing for on-demand impact analysis of the supply chain. As companies focus more on sustainability initiatives, ongoing developments in emerging technologies could help their efforts as many work to move goods closer to their target markets, further integrating supply-chain decisions with strategically planned and data-fueled business moves.
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