Blog Category: Logistics & Supply Chain

  • Choosing a Fulfillment Partner

    Short term – Long term

    The Importance of Fulfillment as a Service is widely known in the corporate world. Especially nowadays when talking about rising fuel prices, courier occupation, prolonged delivery times etc. Choosing a Fulfillment partner correctly may save you potential problems in the future. It is important to keep in mind that the partnership may last a significant amount of time if operations are conducted successfully, and results are met. This means that sometimes, the long-term element must be prioritized over the short-term elements. For instance, sacrificing slightly by increasing your investment costs and choosing a correct, experienced Fulfillment partner may lead to better results in the long run. In this article, we will be providing you with the 5 most important aspects to look out for when choosing a correct Fulfillment Partner.

    5 Key Elements to look out for

    • Experience and Reputation

    If you choose an inexperienced provider that’s new to the industry, you run the risk of delivering a poor brand experience to your customers. The impression on the end customer is often directly related to Fulfillment performance. This increases the need to partner with a well-established, reputable company. It is vital that you conduct business with a company that has years of proven experience and staff that is trained and knowledgeable in all areas of the business. You could also seek reviews from customers that have a similar business model to your business. This way you will have direct feedback that enables you to make a more accurate assessment on whether or not you should choose this Fulfillment partner. Lastly, meeting the Fulfillment partner in person might reinforce the relationship which could lead to potentially increased problem solving in the future. Don’t disregard your companies’ reputation, choose a respectable Fulfillment Partner.

    • Seamless Integration

    This element makes the initial set-up process much easier whilst also simplifying continuous communication by streamlining the information transfer procedures through, for instance, correct API (Advanced Platform Integration) integrations. Set-up should not be a hassle. An experiences professional Fulfillment partner usually has all types of integrations available that make your life easier. They sometimes offer real-time views in transport, inventory management, warehousing etc. Make sure to discuss this topic thoroughly before establishing your partnership to avoid the arise of potential issues in the future. When reviewing the integration possibilities, consider aspects such as Omnichannel Integration (price/delivery/transport/warehousing etc.), CRM/ERP platform Integration, Automated email communications etc.

    • Reverse Logistics and Performance

    Fulfillment service providers sometimes also provide you with the option to handle the complete returns process. This could save you a ton of resources and time, if done correctly. The latter should be stressed as poor handling of returns may influence your brand in a strong negative way. However, if the returns are managed correctly, your brand image receives strong positive reinforcement. Reverse Logistics is thus an important element to look out for and should always be considered due to the high brand impact potential. Make sure to review the performance metrics of the Fulfillment service provider on Reverse Logistics in detail to avoid surprises. Also make sure to consider switching your current Reverse Logistics process. Professional insight should be considered. Openness to change is recommended.

    • Warehouse Locations

    We currently live in an era that follows the golden rule of ‘the faster the better’. Of course, this is not always true, however, customers do expect their shipments to be delivered to them as fast as possible. 7+ days for delivery times is usually not acceptable anymore. The average delivery time within Europe is around 2-3 days. Experiences Fulfillment partners sometimes even offer same-day delivery, depending on your business model. Regardless, it is important to have knowledge on the Fulfillment partners’ infrastructure. Knowing where their Warehouses are located and even knowing traffic routes might validate the claims of delivery performance. If majority of your customer base resides in Spain it would be highly beneficial to choose a Fulfillment Partner that has a reliable transport framework allowing him to have high performance on deliveries to/from Spain. Future opportunities for market expansion should also be considered. If you are planning to ship worldwide for instance, it is important to discuss the possibilities with your potential Fulfillment Partner.

    • Brand reinforcement

    It is often the small things that make a difference. Another factor that should be taken into account is the possibility for brand reinforcement. Customization is an important element that should be considered when choosing a Fulfillment partner. Providing the customer with a strong personal brand experience can have high positive impacts on customer retention and continuous purchases. Of course, it also increases your brand awareness and recognition. Look out for Fulfillment partners that offer you customization options. An example could be personal packaging. Allowing you to use custom packaging options may make the difference and give you a competitive advantage by providing your customers with the brand experience they seek. Brand reinforcement should not trump performance metrics, however, it still stays a valid element to consider as increased brand awareness will almost always positively affect your company.

    These 5 key elements should be kept in mind when considering a Fulfillment partner to outsource your Fulfillment services. Would you like to know how more on how to choose a correct Fulfillment partner correctly? Talk to a ModusLink Expert today by clicking HERE!

    Bibliography

    Busby, A. (2019, 24 oktober). Fulfillment As A Service, Why The Future Of Delivery Is In The Clouds. Forbes. Geraadpleegd op 26 februari 2022, van https://www.forbes.com/sites/andrewbusby/2019/10/23/fulfillment-as-a-service-why-the-future-of-delivery-is-in-the-cloud/?sh=6b83309d4af1

    business.com editorial staff. (2014, 25 juni). Benefits of Using an Order Fulfillment Service. Business.Com. Geraadpleegd op 2 maart 2022, van https://www.business.com/articles/benefits-of-using-an-order-fulfillment-service/

    Roggio, A. (2011, 4 november). 5 Reasons to Consider Fulfillment Services. Practical Ecommerce. Geraadpleegd op 5 maart 2022, van https://www.practicalecommerce.com/5-Reasons-to-Consider-Fulfillment-Services

    Thill Inc. (2021, 21 oktober). Fulfillment Center Pros & Cons. Thill Inc. Geraadpleegd op 5 maart 2022, van https://thillinc.com/blog/fulfillment-center-pros-cons/

    3Pl, L. (z.d.).  7 tips for choosing a fulfillment partner. Logicos. Geraadpleegd op 5 maart 2022, van https://www.logicos3pl.com/en/blog/tips-for-choosing-a-fulfillment-partner

    Lab, T. F. (z.d.). 8 Essentials When Choosing a Fulfillment Company + 8 Best Companies for 2021. Thefulfillmentlab. Geraadpleegd op 7 maart 2022, van https://www.thefulfillmentlab.com/blog/choosing-fulfillment-company

    Roggio, A. (2011, 4 november). 5 Reasons to Consider Fulfillment Services. Practical Ecommerce. Geraadpleegd op 5 maart 2022, van https://www.practicalecommerce.com/5-Reasons-to-Consider-Fulfillment-Services

     

  • IOT SupplyChain Tools (Internet of Things)

    The utilization of IoT tools (Internet of Things)

    Many of the electric devices/sensors that are applied to smart packaging use the global interconnected network called the Internet of Things. The concept of IoT (internet of things) is aimed at providing a global interconnected network infrastructure for connecting objects to the cyber- physical world. It enables companies to track and trace their products which are equipped with sensors devices (Cheung, 2018).

    IoT tools

    The main IoT tools are elaborated upon below.

    RFID (radio-frequency identification): is an electronic sensor and data collecting system using RF signals located on packages to monitor critical parameters such as temperatures, pressure, and vibration which captures and communicates data about how the products are moving along the supply chain and enable organizations to track and trace the product during its journey from manufacturer to customers (Cheung, 2018). The use of smartphones to increase the supply chain visibility and anytime access by using available handled devices is quickly standardizing for companies’ solutions. The technology is optimal to track products that are in transit (Fedex, 2020).

    Traditionally, inventory counts were a complex exercise done manually about once a year but RFDI technology enables retailers such as Macy’s to monitor stock monthly bringing accuracy from 60% to over 90%. Macy’s reported that it experienced 2-3% inventory inaccuracy per month which is 24% annually but by implementing RFID solutions it minimized out-of-stock situations, provides real-time merchandise location data and allows to track their inventory throughout the retail supply chain (Bianchi, 2017).

    NFC (near field communication): is non-contact near-field communication technology. NFC reader is a tool that can be integrated into the warehouse management picking verification system. The benefits of using such technology are its combinations with the smartphone as a carrier for the logistics industry and optimize the management process with a low error rate to increase operability without sacrificing labor and resources efficiency; thereby enhances the company competitiveness by increasing efficiency inside warehouse management as well as cost savings for the further development of the logistics industry. Furthermore, it helps eliminate the paperwork and provides information about the inside of the package such as the location of the product inside the warehouse, description of the item, and the number of items inside the warehouse.

    All of these pieces of information are readable through the smartphone. The system enables smartphones to read the NFC tag on packages and allows the operator to read the information needed (Hou, 2016). The Diageo company integrated NFC chips for a type of alcohol drink “Johnnie Walker blue”. Customers who have an NFC chip, enable phones to read information from the NFC on the label with additional information about the product and find out if the bottle was in some way misused. It also allows the company to track the product during the whole supply chain, storages, and the opening times (Vasić, 2018).

    Barcode label: Plenty of operations happening inside the warehouse rely on administrative documentation. The use of these barcodes, rack labels save a lot of time to the different employees in term of packing and picking process as they only need to scan the barcode and receive all the information needed on the requisite hardware to read them. The barcodes label also benefits in managing inventory by being able to track the exact location and movements of products in and out of the warehouse facility as well as eliminating delays and error.

    Barcode labels are usually called the foundation of automated warehouses as it was the first data tracking technology and refers to one-dimensional data which means that they can only hold information in the horizontal dimension. They provide several crucial benefits such as inventory tracking, arrival planning, improved picking efficiency, traffic optimization, decrease human data entry errors, and reduce out of stock situations (Jules, 2020).

    Weerts supply chain is using barcodes label on its stored products to monitor the localization of its goods. Weerts supply chain is storing a lot of perishable goods such as chocolate, therefore besides having a temperature control inside the warehouse, the barcode label indicates the perishable dates of the products. Thus, they can distribute to supermarkets the goods with the closest perishable date just by scanning the rack where the product is placed (Richelle, 2021).

    Figure 1Vasić, Đ. &. (2018). NFC Technology and Augmented Reality in Smart Packaging.

    The table above compares the different technological devices and differentiates them in terms of speed, scalability, devices needed, sensing distance, and error rate. It is obvious that compared to the verification systems, the manual work is slower and error rates are high (Vasić, 2018).

    All the different devices result in advantages for Supply Chains through the use of IoT tools and help companies in their daily operations. Although the initial cost concerning new sensors technologies are high, the inherent opportunities incentivize companies to invest in the integration of IoT.

    Would you like to know more on how ModusLink can implement IoT tools when managing Supply Chain, Logistics and E-Business? Talk to a ModusLink Expert today by clicking here!

    Bibliography

    Aliakbarian. (2019, February 20). Smart packaging: challenges and opportunities in the supply chain. Retrieved from supplychainquaterly.com.

    Bianchi. (2017, June 28). 5 Examples of Innovative Uses for RFID Technology in Retail. Retrieved from shopify.com.

    BioSpectrum. (2012, July 16). Packing smart for better reach of vaccines. BioSpectrum digital edition. Retrieved from https://www.biospectrumasia.com/.

    Cheung, S. &. (2018). Smart Packaging: Opportunities and Challenges. University of Liverpool & University of Northumbria, Department of Mechanical and Construction Engineering & Division of Industrial Design. Liverpool: Elsevier.

    Choudhury. (2018, April 05). Top Benefits of Smart Packaging for Packaging Companies | Infiniti Research. Retrieved from Infinity research.

    Emprechtinger. (2019, April 18). 5 things you should know about smart packaging. Retrieved from lead-innovation.com.

    Fedex. (2020). Tracking Technologies Are the Cornerstone for a Competitive Supply Chain Strategy. Retrieved from Fedex.com.

    FreightPOP. (2019, September 3). Barcodes, QR Codes, & RFID In Supply Chain Management. Retrieved from freightpop.com.

    Hou, L. &. (2016). The Application of NFC Verification System in Warehouse Management System. South China University of Technology, School of Computer Science and Engineering. Guangzhou,: Atlantis Press .

    impacx. (2020). What is smart packaging and its benefits? Retrieved from impacx.io. Jules. (2020, April 8). warehouse automation 101: a complete guide. Retrieved from easyship.com.

    Pagliusi, J. &. (2020). Roadmap for strengthening the vaccine supply chain in emerging countries: Manufacturers’ perspectives. Elsevier.

    Regattieri, S. &. (2013). The Important Role of Packaging in Operations Management. In Operations management .

    Richelle. (2021, January 11). Smart packaging. (Boulanger, Interviewer) Thrams. (2020, November 25). Big Benefits of Smart Packaging

    Retrieved from primarypackaging.com.

    Vasić, Đ. &. (2018). NFC Technology and Augmented Reality in Smart Packaging. University of Novi Sad, Faculty of Technical Sciences., Department of Graphic Engineering and Design. International Circular of Graphic Education and Research.

    Ward, h. &. (2019). Rethinking packaging. DHL , Supply chain department. DHL Customer Solutions & Innovation Represented by Matthias Heutger.WHO. (2020). Bar-codes, QR codes and Vaccine Vial Monitors in the context of COVID-19

    vaccines. World Health Organization.

     

  • Drones in Supply Chain

    Introduction –

    The evidence of the increasing popularity of Supply Chain automation is pushing companies to research even more performant alternatives that will keep boosting the efficiency of robots inside Supply Chains. The many benefits that come with robots are the reason why new and higher productive technologies are surging.

    Businesses around the world have started to integrate drones into their Supply Chain over the past years to help manage their inventory. The drones are built and designed to assist human workers indoors and benefit large organizations that have stationary inventory. Companies that deal with a large amount of inventory often find it challenging to find items inside the warehouse. Therefore, the areal inventory drones can benefit many big organizations to find the right items inside the warehouse and cut their inventory carrying costs. The drones carry sensors, scanners, and cameras to monitor and track inventory. The aim of integrating this drone is mainly a concern of accuracy as the drones should be more efficient and precise than humans. So far, the result of implementing drones into Supply Chains has been great and drones are becoming quite popular due to their capability of flying around, avoid obstacles, navigate indoors, and operate in fleets (Dronevideos.com, 2018).

    Benefits

    Several benefits can be identified while using indoor drones. First, the human workforce will potentially hold less hazardous tasks which means no ladder climbing or dangerous inspections anymore. There is a fast return on investment due to the manageable acquisition cost of hardware.

    Secondly the reliable/stable software can enable fully autonomous indoor navigation and automatically scan barcodes. Despite these promising positives effects that drones bring to a warehouse, many negatives side effect still needs to be overcome.

    Limitations

    The limited flying area and the many obstacles inside the warehouse make the process complex. Furthermore, integrating the drones into the existing process makes it time-consuming and sometimes unsafe due to potential drones’ failure such as battery explosions. The maintenance and reparation costs are also something to take into consideration resulting in some delays or downturns. Finally, analysts identify the automated drone’s system suffering from the “garbage in”, “garbage out” issues. When inventory gets lost, drones cannot prevent it, identify it, or resolve it. Despite all the benefits that inside drones can bring, few adjustments still need to be studied, analyzed, and fixed to fully enjoy and operate the drones inside automated Supply Chains.

    Furthermore, the future might be worrying for workers as they feel targeted and soon stand the risk to be replaced by more efficient and accurate drones (Maghazei, 2019). On the contrary, drones could also be an opportunity for workers to be trained and taught are to manage/supervise these drones and receive more specific assignments that need critical thinking decisions. This will merely shift the work dynamic and prevent job loss.

    A bright future

    Nowadays automated Supply Chains are revolutionizing and reshaping the fulfilment process. The number of drones integrated inside warehouses to Supply Chain daily operations is booming. In general, technologies such as barcode labels, automated guided vehicles, automated storage and retrieval, automated mobile robots, are the close future for most of the Supply Chains around the world. Despite the many benefits such as time-savings, increased accuracy, error reduction, cost-saving, better productivity, efficiency, and more space is created, the human workforce is worried for their future as robots start to replace them.

    Many disadvantages still need to be overcome, even if the availability of affordable drones is increasing, the initial investment remains high at least for most companies. Not to mention the regular maintenance check cost, repairs, and the training of the workers who do not especially know how to use specific drones. Even though drones can operate autonomous, it is still important for workers to understand their protocols to not form Supply Chain bottlenecks along the way.

    It is seen that the implementation of automated drones by big companies such as Amazon, DHL, or UPS is becoming increasingly popular. Smaller companies do not have the capital to invest yet in drone technology, but it is a matter of time before drones will be integrated in most of the Supply Chains worldwide, at least to dome degree. SME’s (Small/Medium Enterprises) also outsource frequently to still enjoy the benefits that drones bring to their respective Supply Chain.

    Fulfilment is being impacted as many time-consuming tasks are replaced by high-tech drones which can reduce the time needed to transport, manage, or place items inside the warehouse. Also, automated drones can work 24 hours, seven days out of seven. This enables consumers to receive their goods in a short period though shortening of lead times which increases customer satisfaction.

    From the beginning of the robotization era in 1960 to the automated Supply Chains in 2020, a huge boom in technology has happened and drones are showing strong potential in performance which impacts the fulfilment process as they become more innovative over time.

    The future for drones is bright. The indoor drones which are being analyzed and studied for full implementation will be another important step for automated Supply Chains as they will be able to bring many positives effects such as a fast return on investment, however, adjustments still need to be made to be for them to be fully operational.

    Despite the necessary adjustments, the rapid growth and advancements in innovative drone technology illustrate a bright future. Would you like to know more about automated Drones, and how to integrate this within your Supply Chain? Contact one of ModusLink’s Industry experts by clicking here!

    Bibliography:

    Baker, P. &. (2007). An exploration of warehouse automation implementations: cost, service and flexibility issues. Academic paper.

    Banker. (2019, March 11). The Autonomous Mobile Robot Market Is Taking Off Like A Rocket Ship. Forbes.

    Bonn. (2016, June 06). DHL employs robot as picker’s best companion. Retrieved from DHL.com.

    Bowles. (2020, November 18). Warehouse robotics: everything you need to know in 2019. Retrieved from Logiwa.com.

    Bridger. (2015, October 8). Upgraded cold storage AS/RS boosts Americold’s productivity, labor efficiency. Retrieved from refrigeratedfrozenfood.com.

    Croxton. (2003). The Order Fulfillment Process. The Ohio State University. The international journal of logistics.

    Dronevideos.com. (2018, September 4). Companies Using Drones In Their Warehouses For Inventory Control & More. Retrieved from Dronevideos.com.

    Jules. (2020, April 8). warehouse automation 101: a complete guide. Retrieved from easyship.com.

    Koster, A. &. (2017). Robotized Warehouse Systems: Developments and Research Opportunities. Research paper, Rotterdam School of Management, Erasmus University, The Netherlands, School of management, Rotterdam.

    Maghazei, W. &. (2019). Applications of drones in warehouse operations. Academic paper, Swiss Federal Institute of Technology Zurich, Chair of Production and Operations Management Department of Management, Technology and Economics, Zurich.

    MMH. (2018, March 23). FedEx partners with Vecna Robotics as part of automation growth strategy. Retrieved from mmh.com.

    Monroy. (2020, August 28). What is warehouse robotics . Retrieved from 6river.com. Richelle. (2021, January 11). Smart packaging. (Boulanger, Interviewer)
    Romaine. (2020, September 15). Pros and cons of AS/RS for warehouse automation. Retrieved

    from conveyco.com.
    UPS. (2020, April 23). UPS Pressroom . Retrieved from pressroom.ups.com. Wilson. (2020, February 6). The future of logistics warehouses . Retrieved from

    supplychaindigital.com.

     

  • COVID 19 The State Of Supply Chains (Part 2)

    Introduction –

    The first part of this article described the negative effects on Supply Chains as a result of COVID-19. It is crucial to understand the problems faced and the reasoning as to why these problems had a big impact amongst Supply Chains across many different companies. It is only when problems and their origin are understood in detail, effective and adequate solutions can be implemented to prevent the return of future negative effects.

    Now that the negative effects are known and understood to a degree, companies are starting to implement counter measures. Of course, the type of measure implemented depends on the specific company in question. However, the main issue Supply Chains across companies have issues with coping with the effects of the pandemic lies at the current/prior resilience level. Supply Chains simply did not invest sufficiently in the resilience element to minimize these negative effects. Now, how can companies specifically improve their Supply Chain Resilience?

    Increasing Resilience

    According to BizClik Media (2020), the pandemic will not disappear anytime soon. Companies must instead learn to adapt to the business environment. To improve resilience, companies require steady, start to finish appraisal and enhancement and observing. Strong analytical systems must be implemented that monitor constant changes in the marketplace.

    Strong analytical capacity will allow companies to better understand the situation’s complexity, anticipate potential disruption, and quickly develop a response (BizClik Media, 2020).

    See the figure below for a clear visual on how to improve your Supply Chain’s Resilience level in a structured way.

    Figure 1 Operate – Execute – Monitor Cycle (Resilience) https://supplychaindigital.com/supply-chain-2/accenture-building-supply-chain-resilience-amidst-covid-19

    Let’s create a scenario on how to improve the Supply Chain’s resilience using the diagram above. Remember, the end goal of increased Resilience is necessary to enable and increase a company’s ability to respond accordingly to unexpected changes within the demand/marketplace.

    Step 1: Mobilize

    To counter unexpected changes in demand, an initial response plan must be in place that holds specific operating rules. For instance, if demand rises above level X%, automatic notifications must be sent to Suppliers A/B to deliver new products on time. These parameters can be established based on safety/stock margins that are a result of product priority and lead times. Regular flow and depreciation value also play important roles in determining these specific parameters.

    Step 2: Sense

    After creating the fundamental counterplan, risks and implication on the Supply Chain must be identified and analyzed as soon as possible. For instance, if Supplier A uses a specific raw material to create your product that is known to become scarce upon demand increase, inform yourself about alternatives that enable product delivery past these scarcity levels. Diversify risks by looking for ways to counter potential bottlenecks in production and delivery.

    Step 3: Analyze

    It is important to analyze ‘what-if’ scenarios in case of unexpected plan failures. These scenarios must all elements of the Supply Chain including Source, Plan, Make, Distribute, Service. It is best to review these plans and scenarios every couple of months depending on the company to ensure their validity. Furthermore, having multiple perceptions on/off the scenarios and solutions may contribute to increased quality and resilience. The more a company asks itself the questions of what if x will happen, the better the understanding of the possible unexpected obstructions.

    Step 4: Configure

    This final step of this never-ending cycle should include the configuration of the entire counter process. All steps/elements needed in order to facilitate the counterplan should be in place. New transport/backup modalities, alternate materials, backup machinery etc. The more extensive the preparation, the better. This last step really ties in with the third analysis step as the potential disruptive scenarios determined the level of configuration needed.

    Looking ahead

    After continuous focus on Supply Chain optimization to minimize costs and improve efficiency across the board, COVID-19 clearly illustrates that many companies are not fully aware of the vulnerability of their supply chain relationships to unexpected Global changes within the marketplace/demand (Deloitte, 2021).

    Fortunately, new digitalized Supply Chain technologies are showing potential to drastically  improve the visibility across the end-to-end supply chain. It is clear that the current linear model of Supply Chains was not sufficient to be resistant to such global changes as the pandemic. Technologies such as the Internet of Things, artificial intelligence, AVG (Automated Guided Vehicles) are designed to anticipate and meet future challenges.

    Would you like to know more about the state of Supply Chains moving forward? Stay tuned for our next Blog where we will go more in-depth or talk to a ModusLink Expert today by clicking here!.

    Bibliography:

    BizClik Media. (2020, May 17). Accenture: building supply chain resilience amidst COVID-19. Supply Chain Digital. Retrieved November 27, 2021, from https://supplychaindigital.com/supply-chain-2/accenture-building-supply-chain-resilience-amidst-covid-19

    COVID-19: Managing supply chain risk and disruption. (2021, October 5). Deloitte. Retrieved November 26, 2021, from https://www2.deloitte.com/global/en/pages/risk/cyber-strategic-risk/articles/covid-19-managing-supply-chain-risk-and-disruption.html

    G. (n.d.). What impact has COVID-19 had on supply chains & responsible sourcing? Greenstone. Retrieved November 26, 2021, from https://www.greenstoneplus.com/blog/what-impact-has-covid-19-had-on-supply-chains-responsible-sourcing

    Gilkey, J. G. (2021, May 1). The challenges and realities of retailing in a COVID-19 world. Researchgate. Retrieved November 28, 2021, from https://www.researchgate.net/publication/351656064_The_challenges_and_realities_of_retailing_in_a_COVID-19_world_Identifying_trending_and_Vital_During_Crisis_keywords_during_Covid-19_using_Machine_Learning_Austria_as_a_case_study

    Harapko, S. H. (2021, February 18). supply-chain. Ey.Com. Retrieved November 26, 2021, from https://www.ey.com/en_gl/supply-chain/how-covid-19-impacted-supply-chains-and-what-comes-next

    Meyer, A. (n.d.). The Impact of the Coronavirus Pandemic on Supply Chains and Their Sustainability: A Text Mining Approach. Frontiers. Retrieved November 26, 2021, from https://www.frontiersin.org/articles/10.3389/frsus.2021.631182/full

    Netherlands, S. (2021, July 27). COVID-19 impact on supply chains. Statistics Netherlands. Retrieved November 25, 2021, from https://www.cbs.nl/en-gb/dossier/coronavirus-crisis-cbs-figures/covid-19-impact-on-supply-chains

     

  • COVID 19 The State Of Supply Chains (Part 1)

    Introduction Grand disruption

    Delayed shipments because of sea freight disruptions, monthly increasing fuel charges, disconnected communication between transport modalities.. These are all direct effects encountered across Supply Chains that resulted from the introduction of the virus COVID-19.

    It is undeniable that COVID-19 has caused many disruptions across markets. Especially within the Supply Chain industry, the virus has caused some companies to go bankrupt due to their fragile Supply Chain not being able to counter the negative effects caused by the virus. This unforeseen situation, experienced by companies worldwide, has caused management staff to relook and revise their current Supply Chain strategies. What is the current state of Supply Chains? Are there any positive effects that come from the disruption within the industry? Which are the key learning factors to pay attention to? These questions are all covered concisely within this 2-part article.

    Negative effects

    In order to understand the current state of Supply Chains the negative effects incurred must be known. Many Supply Chains faced comparable negative issues because of COVID-19. Ernst & Young LLP (EY US) conducted a survey in late 2020 where they asked approximately 200 senior-level supply chain executives at organizations across many sectors, including consumer products, retail, life sciences, industrial products, automotive, and high-tech companies in the United States with over US$1b in revenues if they experienced positive/negative effects amongst their Supply Chains. Out of these respondents, a staggering 72% stated to have experienced negative or severe negative effects. 18% stated the pandemic had no effect on their company whilst a minor 11% actually stated to have experienced positive effects. See the chart below for a short visual overview of the respondents’ answers (Harapko, 2021).

    Figure 1, Supply-Chain Effects experienced as a result of COVID-19 – 200 Respondents SE (https://www.ey.com/en_gl/supply-chain/how-covid-19-impacted-supply-chains-and-what-comes-next)

    According to this research, many Supply Chains were hit hard by the pandemic. Some companies experienced more negative effects than others. This research stated that, among the respondents, all automotive and nearly all (97%) industrial products companies said the pandemic has had a negative effect on them. Furthermore, 47% of all companies reported the pandemic disrupted their workforce.  These are significant amounts and clearly visualize the struggle experienced by many companies in their later stages.

    Confusion, a lack of understanding.

    The specific negative effects faced by Supply Chains are too many to go into detail. Supplier retraction, fuel charge increases, significant demand increases, modality issues etc., to name a few. Especially in the early stages of the COVID-19, not many organizations understood the virus. It’s nature and the effects on short/long term future were very difficult to predict. As a result, the impact of the negative effects stated accumulated rapidly. It was difficult to implement direct countermeasures as nobody understood precisely how the virus would develop in the future.

    According to Greenstone (n.d.), this confusion and lack of understanding resulted in cross-border flows of goods being stalled due to safety precautions needing to be understood and then implemented. Furthermore, local ‘lockdown’ regulations formed a great obstacle that needed to be understood in relation to trade. It was only after this that the natural flow-of-goods could continue to work on operating levels. This phenomenon can be easily identified within food Supply Chains. However, as mentioned before, the negative effects faced by Supply Chains can be seen across all industries. 94% of the Fortune 1000 companies claim to see Supply Chain disruptions because of the coronavirus. 

    Figure 2 COVID-19 Supply Chain effects – Fortune 1000 companies (https://www.google.com/url?sa=i&url=https%3A%2F%2Fsupplychaindigital.com%2Fsupply-chain-2%2Faccenture-building-supply-chain-resilience-amidst-covid-19&psig=AOvVaw1cleCCNUnB1vy8TfDrQvHx&ust=16388950

    The main conclusion that can be given from the experienced negative effects is that the many companies lacked a certain amount of resilience within their Supply Chain structure.

    On the upside, COVID-19 has magnified and identified the present issues within current/former Supply Chain Structures and operations. Now that these issues have been identified, companies can use this knowledge to adjust accordingly for the better and gain a strong competitive advantage as a result. Would you like to know more about the state of Supply Chains moving forward? Stay tuned for our next Blog where we will go more in-depth or talk to a ModusLink Expert today by clicking here!.

    Bibliography:

    BizClik Media. (2020, May 17). Accenture: building supply chain resilience amidst COVID-19. Supply Chain Digital. Retrieved November 27, 2021, from https://supplychaindigital.com/supply-chain-2/accenture-building-supply-chain-resilience-amidst-covid-19

    COVID-19: Managing supply chain risk and disruption. (2021, October 5). Deloitte. Retrieved November 26, 2021, from https://www2.deloitte.com/global/en/pages/risk/cyber-strategic-risk/articles/covid-19-managing-supply-chain-risk-and-disruption.html

    G. (n.d.). What impact has COVID-19 had on supply chains & responsible sourcing? Greenstone. Retrieved November 26, 2021, from https://www.greenstoneplus.com/blog/what-impact-has-covid-19-had-on-supply-chains-responsible-sourcing

    Gilkey, J. G. (2021, May 1). The challenges and realities of retailing in a COVID-19 world. Researchgate. Retrieved November 28, 2021, from https://www.researchgate.net/publication/351656064_The_challenges_and_realities_of_retailing_in_a_COVID-19_world_Identifying_trending_and_Vital_During_Crisis_keywords_during_Covid-19_using_Machine_Learning_Austria_as_a_case_study

    Harapko, S. H. (2021, February 18). supply-chain. Ey.Com. Retrieved November 26, 2021, from https://www.ey.com/en_gl/supply-chain/how-covid-19-impacted-supply-chains-and-what-comes-next

    Meyer, A. (n.d.). The Impact of the Coronavirus Pandemic on Supply Chains and Their Sustainability: A Text Mining Approach. Frontiers. Retrieved November 26, 2021, from https://www.frontiersin.org/articles/10.3389/frsus.2021.631182/full

    Netherlands, S. (2021, July 27). COVID-19 impact on supply chains. Statistics Netherlands. Retrieved November 25, 2021, from https://www.cbs.nl/en-gb/dossier/coronavirus-crisis-cbs-figures/covid-19-impact-on-supply-chains

     

  • Inventory Management & Supply Chain Responsiveness

    Introduction – Identify – Adapt – Scale

    Inventory Management has always played a key part in any successful Supply Chain. Correctly managing inventory levels helps companies to swiftly adapt to unpredictable changes within the marketplace. Volatile demand can cause troubling issues when not handled correctly. These issues can often perpetuate themselves into a strong negative cycle. For instance, let’s say you are a company that sells seasonal jackets. Due to an unusually warm winter, your winter jackets no longer sell as expected. Without adapting to the current demand, your winter jackets will become excess inventory overtime. Storing these jackets/tending to them and selling excess inventory etc., all take time and resources. In addition, the warmer winter raises the sales on your fall jacket collection. As you haven’t updated the inventory on these jackets, you are a significant amount of revenue. These negative effects could have been prevented with an adaptive and responsive Supply Chain. It is crucial for all businesses looking to scale, to understand the importance of having the ability to shift production towards demand.

    Correctly managing inventory levels requires a responsive Supply Chain, but what exactly does that mean? According to IGI Global(n.d.), A responsive Supply Chain can be defined as a Supply Chain that is able to shift its production to unpredictable customer demand. How do Supply Chains do this? One way to realize a responsive Supply Chain is to correctly manage inventory levels.

    Inventory Management

    Correctly Managing Inventory levels can be a struggle, depending on the marketplace and products in question. See below the best ways you can effectively improve your inventory Management by making your Supply Chain more responsive.

    Improve Supplier relationships

    Products that require multiple raw materials or parts from different Suppliers are heavily reliant on the active Supplier relationships. Companies that trade in those products ought to continuously look for ways to improve their Supplier relationships. This can be done through ways such as specialized contracting/transparency improvements/on-site visits etc. These are all ways to improve the Supplier relationships so that the flow of required parts/raw materials can be done as fluently as possible. Having a better understanding of your supplier’s business position (and vice versa) allows a company to better anticipate and forecast required elements for their end products. This maximizes the throughput speed at which new materials can be ordered and received, in turn increasing your adaptability to the marketplace.

    Figure 1(Supplier Relationship Management) Significance of Healthy Supplier Relationship. (n.d.). from http://www.strategicsourcing.pk/2015/12/significance-of-healthy-supplier.html

    Risk Management

    Another way to improve inventory control and build Supply Chain responsiveness is through effective risk management. Especially in turbulent times and strong unforeseen events such as COVID-19, the element of risk management is crucial for any business not looking to fall into a spiral of negative effects. Supply Chains are able to manage risks by having multiple production facilities/acquiring different logistical partners/correctly managing their staff/capacity levels, etc. It is important to always look for ways to minimize risks. This will minimize the negative effects incurred when facing unforeseen events. As a result, less pressure will be put on your business which gives breathing room for improvement and correction. Especially for SME’s (Small-Medium-Enterprises) looking to invest in new technology, a detailed risk analogy of the sought-after investment must always be made prior to continuing business. Automation and digitalization are important elements in Supply Chains nowadays. Despite the importance of these elements, never invest without a proper risk-return analysis. Investments made correctly with low risks (e.g., Material Resource Planning IT systems) allow companies to increase the improvement of their inventory management.

    Outsourcing

    A method to the improvement of Supply Chain performance and inventory management that has become increasingly popular over the years is the concept of Outsourcing. Companies such as ModusLink are Supply Chain experts with years of accumulated Industry knowledge. Companies within the Supply Chain Outsourcing industry often have big teams of professional Supply Chain Experts that allow them to often effectively take over whole Supply Chains. Some companies can also be price-competitive, increasing the attractiveness of outsourcing your Supply Chain. These companies use their extensive network, Supplier relationships and vast IT-infrastructure to massively increase the Supply Chain responsiveness and Inventory Management. Companies that outsource effectively gain the ability to spend resources elsewhere. This allows their business to flourish in a short-time period and more importantly, increase their ability to scale effectively.

    These three elements are important ways to Increase a Supply Chain’s responsiveness and in turn, increase inventory management. There are plenty of other ways a business can improve its Supply Chain Strategy. Would you like to know more about these innovative strategies and how you are able to implement these within your Supply Chain? Stay tuned for our next Blog or talk to a ModusLink Expert today by clicking here!.

    Bibliography:

    Amsler, S., O’Donnell, J., & Cole, B. (2021, February 11). inventory management. SearchERP. Retrieved November 24, 2021, from https://searcherp.techtarget.com/definition/inventory-management

    Significance of Healthy Supplier Relationship. (n.d.). Strategic Sourcing. Retrieved December 3, 2021, from http://www.strategicsourcing.pk/2015/12/significance-of-healthy-supplier.html

    Walts, A. (2021, October 29). Your Essential Guide to Effective Inventory Management + 18 Techniques You Need to Know. The BigCommerce Blog. Retrieved November 21, 2021, from https://www.bigcommerce.com/blog/inventory-management/

    What is Responsive Supply Chain | IGI Global. (n.d.). IGI. Retrieved December 3, 2021, from https://www.igi-global.com/dictionary/building-a-strategic-framework-for-retail-supply-chain-analytics/52748

     

  • Innovation with Reverse Logistics (Part 2 of 2)

    Introduction

    In Part I of this article we gave a short introduction to the Reverse Logistics concept, and the reasoning behind the recent increase in popularity. Many SME’s (Small-Medium Enterprises) now make use of Reverse Logistics to some degree. The benefits gained such as resource management, profit margin increase, and increased customer satisfaction are prominent within any company that maintains a reliable Reverse Logistics Chain. 

    In Supply Chain Management, Reverse Logistics can be used as a strategy to close the circularity of a products’ life cycle. Reverse Logistics is the process that deals with the collection and remanufacturing of used or unnecessary items. From a supplier point of view, Reverse Logistics’ drivers are legislations, which oblige them to manage the remanufacturing of sold products, environmental concerns, strictly linked to the demand of customer to have more sustainable products, and economic benefits, since a returned item can easily be sold instead of producing a new one from raw materials (D’Amico, E. D. 2021).

    This part of the Reverse Logistics Article will cover the latest innovations that are mainly used to gain a competitive advantage within the marketplace. When executed correctly, these innovative technologies allow companies to scale rapidly. SMEs often outsource to professional Supply Chain companies that make use of these technologies. This way, smaller companies can experience the benefit of rapid scalability whilst keeping their investment costs low. It also provides better resource management as they can allocate their personnel to other tasks. In this article, we will zoom in on the two most popular innovations within Reverse Logistics.

    According to D’Amico, E. D. (2021), An implementation of technologies such as IoT (Internet of Things) and Blockchain would allow to improve the functionality of Reverse Logistics. Although these technologies can be expensive to be implemented and require much expertise, they offer possible solutions, especially with the use of RFID (Identification tags usable on products). Traceability, transparency, and prediction are the main benefits of Smart Reverse Supply Chain (SRSC).

    Innovative Technologies

    Internet of Things (IoT)

    According to K. Ashton (2019), IoT describes a network in which every physical product has a virtual identity and is linked to a connection. It represents one of the main pillars of the revolution of Industry 4.0. The IoT is considered as the key that allows objects, such as RFID tags or sensors to communicate with each other and with humans. The holistic connection created a synergized network that allows streamlined Data transfers on a large scale.

    IoT is used within many Supply Chain aspects nowadays. Inventory management is a frequently used aspect. As soon as the quantity falls under an established number, a reorder can be automatically processed with the use of RFID in a virtual cloud. According to Wanganoo (2020),  the structure of IoT is based on four layers. These are:

    • Data storing (RFID)
    • Communicaion
    • Service
    • Display layer

    IoT is able to bring remarkable opportunities to Reverse Logistics. Through the establishment of a connected network of products, the information infrastructure is strongly improved (Gar-2020).

    Blockchain

    Blockchain can be defined as a digital technology that facilitates the recording of transactions and allows for the traceability of a resource. The type of resource can vary between physical (e.g., cars) or an abstract resource (e.g., patents or cryptocurrency). Especially with cryptocurrency, Blockchain allows the record of every transaction. Blockchain as a process can be explained as follows: The moved information can be envisioned as a block, which contains all the pertinent data and passes from one client to the next. The exchange should be endorsed by the organization, which looks at the data and approves it. This guarantees straightforwardness and security. The new record is added to a block, that contains a unique code, named hash. It also contains the code from the previous block and is successively added to a chain of blocks.

    The main concept stimulates the idea of handling information in a decentralized way. Information is verified by the collective, instead of by a single entity.

    When it comes to supply chain and Reverse Logistics, Blockchain can be used to improve the chain in multiple ways. The decentralized structure allows every logistics member to keep real-time track of a product and it increases the reliability of the data (Zhu-2019). The transparency enabled by Blockchain increases the security of a trade. This security is a valuable element needed in any resilient Supply Chain. In addition, Blockchain allows Supply Chains to streamline their transaction process as it can remove intermediate steps form the transactional process. This reduces costs and time, ultimately improving the Supply Chain.

    The figure below clearly illustrates the Blockchain process.

    Figure 1. (The Blockchain process) D’Amico, E. D. (2021, October 10).

    These two innovative technologies allow any company to build a reliable and resilient Reverse Logistics process, ultimately improving the Supply Chain. Would you like to know more about these innovative technologies and how you are able to implement these within your Supply Chain? Contact a ModusLink Expert today by clicking here!

    Bibliography:

    D’Amico, E. D. (2021, October 10). ResearchGate. ResearchGate. Retrieved November 6, 2021, from https://www.researchgate.net/publication/354551628_Analysis_of_Challenges_and_Potentials_of_Reverse_Logistics

    Jenkins, A. (2021, April 5). A Guide to Reverse Logistics: How It Works, Types and Strategies. Oracle NetSuite. https://www.netsuite.com/portal/resource/articles/inventory-management/reverse-logistics.shtml

    Marchese, K. (2021, October 29). Supply Chain leadership. Deloitte United States. https://www2.deloitte.com/us/en/pages/operations/articles/supply-chain-leadership.html

    Niroomand, I. (2021, August 31). The importance of reverse logistics in your supply chain network. Kinaxis. https://www.kinaxis.com/en/blog/importance-reverse-logistics-supply-chain-network

    Reverse Logistics – Rhenus Netherlands. (n.d.). Rhenus. Retrieved November 6, 2021, from https://www.rhenus.com/en/nl/our-solutions/contract-logistics/logistics-solutions/reverse-logistics/

     

  • Innovation with Reverse Logistics (Part 1 of 2)

    Introduction

    Both Challenging and Rewarding. When speaking to any experienced Supply Chain professional, it is these exact two terms that can almost be expected to be brought up somewhere within the conversation. A strong Supply Chain must contain elements such as Resilience, Agility, Responsiveness, Cooperation, Fluency and so forth. Managing to maintain all these elements can be highly challenging. However, if a business succeeds in doing so, the rewards are highly noticeable. Loyal customers, Fast delivery, Capability to adapt to the market, freedom in spending resources, time management, effective return management and so on.

    SME’s (Small/Medium Enterprises) often struggle to effectively manage their Supply Chain due to limited capacity and resources. A popular solution to this can be given in the form of Outsourcing. Many SME’s take advantage of Outsourcing the core components of their Supply Chain to experienced professionals within the industry. This allows them to quickly scale their business and invest their time and resources into other parts of the business without sacrificing on the importance of the key driver behind their business, the Supply Chain. A large Supply Chain element that is often prioritized when Outsourcing is the process of ‘Reverse Logistics’. This is because the element is highly impacting the customer satisfaction ratio, and overall Supply Chain performance.

    The definition of Reverse Logistics

    Reverse Logistics is often referred to as Reverse Supply Chain, and part of Closed Loop Supply Chain. It has its first definition published only in the beginning of the nineties by the Council of Logistics Management (Bri-2004, S. 4) and thus still represents a young sector of Logistics.

    The most acknowledged definition of Reverse Logistics is ‘’the process of planning, implementing and controlling flows of raw materials, in process inventory, and finished goods, from a manufacturing, distribution or use point, to a point of recovery or point of proper disposal’’ (Bri-2004, S. 5).

    Figure 1(The Reverse Logistics Process) (Chi-2018)

    The Figure above clearly illustrates the core elements of the Reverse logistics Process. Products are received from the end-customer and transported back to the warehouse in question. They are then carefully inspected for defects, depending on the reasoning behind the return. They are then adequately sorted and either resold/recycled or scrapped.

    The introduction of Reverse Logistics within Supply Chain Management didn’t go as smooth as expected. Businesses often quickly experienced the challenges that come with Reverse Logistics such as capacity management, customer expectations, waste management etc. These challenges were often too grand to build a strong Reverse Logistics process. It is only as of recent that Reverse Logistics has become increasingly popular to manage effectively. There are a couple reasons for this. The uprising of eCommerce businesses is one explanation as many products flow quickly through an eCommerce business, increasing the importance of managing the returns process. Another reason for the increase in popularity of Reverse Logistics management has to do with the uprise of strong Technological Solutions/Innovations such as IOT (Internet of Things), AVG’s (Automated Guided Vehicles), etc. These solutions allow SMEs to overcome the challenges that come with effectively managing a reverse Logistics process.

    Smart Reverse Supply Chain (SRSC)

    The concept of merging the above-mentioned Technology/Tools, together with Reverse Logistics forms the concept that is called ‘Smart Reverse Supply Chain’. To overcome the challenges that come with managing your Reverse Logistics process, Businesses decide to make use of the uprising beneficial technologies mentioned above. They can choose to individually adopt these technologies, or collectively make them work together to strengthen the synergy within the Reverse Supply Chain.

    SRCS can manage flow times and information exchanges more effectively between logistical partners. This minimizes the uncertainties and difficulties when returning products. (XU – 201-1b). According to Xu (Xu-2011b), each product can be equipped with a tag to be associated with a unique identity and to be able to communicate with other devices.

    The two key elements that ought to be managed effectively to improve SRCS are (Xu-2011a):

    • Identification tools: In order to implement a well-organised Smart Reverse Logistics, it is necessary to establish appropriate identification methods such as RFID (ID Tags), 3-D and 4-D Barcodes to permit the recognition of incoming and handled object and the communication between them
    • Standardization: To allow every member of the Closed Loop Supply Chain to pro- cess and identify the products, it is necessary to establish a standardization of the used technologies. Although there is the EPC, which uniforms the identity of every item, also the reading technologies need to be standardized

    These two elements are best managed through the innovative technologies such as Artificial Intelligence and Machine Learning, Blockchain and Internet of Things (IoT). Would you like to know more about these innovative technologies and how you are able to implement these within your Supply Chain? Stay tuned for our next Blog where we go more in depth or talk to a ModusLink Expert today clicking here!

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    Bibliography:

    D’Amico, E. D. (2021, October 10). ResearchGate. ResearchGate. Retrieved November 6, 2021, from https://www.researchgate.net/publication/354551628_Analysis_of_Challenges_and_Potentials_of_Reverse_Logistics

    Jenkins, A. (2021, April 5). A Guide to Reverse Logistics: How It Works, Types and Strategies. Oracle NetSuite. https://www.netsuite.com/portal/resource/articles/inventory-management/reverse-logistics.shtml

    Marchese, K. (2021, October 29). Supply Chain leadership. Deloitte United States. https://www2.deloitte.com/us/en/pages/operations/articles/supply-chain-leadership.html

    Niroomand, I. (2021, August 31). The importance of reverse logistics in your supply chain network. Kinaxis. https://www.kinaxis.com/en/blog/importance-reverse-logistics-supply-chain-network

    Reverse Logistics – Rhenus Netherlands. (n.d.). Rhenus. Retrieved November 6, 2021, from https://www.rhenus.com/en/nl/our-solutions/contract-logistics/logistics-solutions/reverse-logistics/

     

  • What is Smart Packaging.

    The importance of correct packaging

    Each product has its natural flow from beginning to end. Packaging is an important element that manifests its presence within all stages of the product flow. These stages can be identified as the purchase of raw materials, the production and sale of the final product, and not to forget transportation and distribution.

    The role of traditional packaging is to protect a product against deteriorative effects caused by exposure to and usage in the external environment. Packaging logistics is quite a new discipline that has gained consideration in terms of its strategic aspect in providing a significant competitive advantage to improve the efficiency of the whole Supply Chain.

    Over the years, packaging has become an important challenge for companies. Companies must analyze and study the best way to pack products taking into consideration the characteristics of the products such as the shape, components, etc. to minimize cost and improve the companies’ performance and reliability. As a result, the emphasis on packaging systems has been growing substantially as of recent (Regattieri, 2013).

    Nowadays, a strong focus is being placed on Smart Packaging as traditional packaging is no longer sufficient due to continuously increasing customer expectations and increasing product complexity. Smart Packaging consists of packaging systems with embedded sensor technology used for different products to extend their shelf life, track and trace products, monitor freshness, display information on quality, or improve the product on customer safety. Smart Packaging contributes to the overall Supply Chain efficiency from being in constant contact with the products through strategic sensors devices on the packaging. These smart sensors add important functionalities to the packages and companies are becoming more reliant on them due to their numerous positive effects. Smart packaging is integrated into products such as food, pharmaceutical, and many more. The Supply Chain element is currently in a growth phase with immense potential. Latest developments such as thin-film electronic and antimicrobial packing are being analyzed to increase their capabilities and become even more accurate and safer (Cheung, 2018).

    The three main Packaging levels

    The packaging process consists of three main levels. The first level is about the structural nature of the package. This phase is the smallest. Within this phase, the package is in direct contact with the actual content.

    The second level deals with visual communication and customer satisfaction. The main purpose of the second level is to associate the primary packages together.

    Finally, the third level is designed and used for transportation and storage such as cartons. The packaging system is cross-functional which means that the system is being dealt with by different departments having each specific request about the design of the package. This can lead to misunderstanding and can be contradictory.

    The three package levels are illustrated in the schema below.

    (Regattieri, 2013).

    The security of the products can be monitored by research design to increase the safety of the product during manufacturing and assembly, storage and picking, and transport. Smart packaging also plays an important role in traditional packaging. Information transmission is used to inform the management team on the correct way to store or transport the contained product. Organizations also integrate the internet of things (IoT) through an electronic device RFDI (radio-frequency identification) which is a tag on packages to enable companies to identify the products in real-time, reducing the risk of damages and mapping the path of the products to control the work in progress. An unprotected product could cause product waste which can be negative from an environmental and economic point of view (Regattieri, 2013).

     

    Benefits to Smart Packaging

    Smart Packaging can offer various advantages. They can fulfill the information, automation, marketing, and protective functions. To do so, packages are equipped with tiny electronic devices that add functionalities such as barcodes, LED, augmented reality, NFC (near field communication), loudspeaker, displays. To illustrate their use, a good example would be the intelligent drug packaging with build-in RFID (radio frequency identification) chips which are LEDs and tiny loudspeakers that register the removal of pills and sound an alarm if they are taken in the wrong order by the patient and can inform the doctor who is treating the patient.

    Smart Packaging can also be used for logistics and marketing purposes. Johnnie walker blue label bottles use sensitive sensors that send information to the company if the bottle has been opened during transportation or storage and its location in the distribution chain (Emprechtinger, 2019).

    Smart Packaging has a strong customer empowerment element through great new technological tools. These tools can offer a customer interface that is used to better understand the different purchased products. Scanning a food package brings the customer to a larger explanation on the products’ storage conditions, dietary concerns, ingredient research, and nutritional value (impacx, 2020).

    Quality control is another strong advantage. Active packages use sensors that are being placed on the product. Organizations can detect the status of the product and see whether it is good or comprised. Furthermore, advanced packages can even go further by extracting unwanted particles inside the package which can increase the shelf life. These sensors result in simple access to absolute quality products from the manufacturer and longer-lasting solutions (impacx, 2020).

    Being able to track products might be one of the main reasons for companies to integrate Smart Packaging inside their operations. Organizations are leveraging intelligent packaging systems to track their product inside the Supply Chain process. Smart packaging has made the process of locating products much easier and safer as too many products were difficult to track within a complex supply chain (Choudhury, 2018).

    Finally, Sustainability can be increased through the use of Smart Packaging. It favorites the reduction of the packaging’s impact on the environment as it is economical, cost-effective, durable, and lightweight, enabling companies to have a competitive edge by reducing at the source and consequently reducing the carbon footprint (Choudhury, 2018).

    The many advantages mentioned above attract companies to switch from traditional packaging with high risks of damages or product loss to Smart Packaging with additional advanced technologies that make the logistic operation more resilient.

    Would you like to know more about the best way to integrate Smart Packaging within your Supply Chain? Contact one of ModusLink’s Industry experts by clicking here.

    Bibliography:

    Aliakbarian. (2019, February 20). Smart packaging: challenges and opportunities in the supply chain. Retrieved from supplychainquaterly.com.

    Bianchi. (2017, June 28). 5 Examples of Innovative Uses for RFID Technology in Retail. Retrieved from shopify.com.

    BioSpectrum. (2012, July 16). Packing smart for better reach of vaccines. BioSpectrum digital edition. Retrieved from https://www.biospectrumasia.com/.

    Cheung, S. &. (2018). Smart Packaging: Opportunities and Challenges. University of Liverpool & University of Northumbria, Department of Mechanical and Construction Engineering & Division of Industrial Design. Liverpool: Elsevier.

    Choudhury. (2018, April 05). Top Benefits of Smart Packaging for Packaging Companies | Infiniti Research. Retrieved from Infinity research.

    Emprechtinger. (2019, April 18). 5 things you should know about smart packaging. Retrieved from lead-innovation.com.

    Fedex. (2020). Tracking Technologies Are the Cornerstone for a Competitive Supply Chain Strategy. Retrieved from Fedex.com.

    FreightPOP. (2019, September 3). Barcodes, QR Codes, & RFID In Supply Chain Management. Retrieved from freightpop.com.

    Hou, L. &. (2016). The Application of NFC Verification System in Warehouse Management System. South China University of Technology, School of Computer Science and Engineering. Guangzhou,: Atlantis Press .

    impacx. (2020). What is smart packaging and its benefits? Retrieved from impacx.io. Jules. (2020, April 8). warehouse automation 101: a complete guide. Retrieved from

    easyship.com.
    Pagliusi, J. &. (2020). Roadmap for strengthening the vaccine supply chain in emerging

    countries: Manufacturers’ perspectives. Elsevier.
    Regattieri, S. &. (2013). The Important Role of Packaging in Operations Management. In

    Operations management .

    Richelle. (2021, January 11). Smart packaging. (Boulanger, Interviewer) Thrams. (2020, November 25). Big Benefits of Smart Packaging . Retrieved from

    primarypackaging.com.
    Vasić, Đ. &. (2018). NFC Technology and Augmented Reality in Smart Packaging. University of

    Novi Sad, Faculty of Technical Sciences., Department of Graphic Engineering and

    Design. International Circular of Graphic Education and Research.
    Ward, h. &. (2019). Rethinking packaging. DHL , Supply chain department. DHL Customer

    Solutions & Innovation Represented by Matthias Heutger.
    WHO. (2020). Bar-codes, QR codes and Vaccine Vial Monitors in the context of COVID-19 vaccines. World Health Organization.

     

  • The introduction of E-Procurement.

    The introduction of E-Procurement:

    Price and availability are not the only factors to be considered in a purchasing decision, especially now that a strong supply chain has become an unmissable element for every company in today’s business climate (Namulo, 2017). The dynamic of business around the world is changing at a rapid pace due to fast-growing technological advancements. The ease of accessibility of this technology causes many organizations to shift towards E-Procurement as an effective and innovative Supply Chain support system to help companies reach goals including operational efficiencies, sustainability, and profitability.

    According to (Namulo, 2017), “E-Procurement is the acquisition of goods, services or works from an external source. In procurement, it is necessary to ensure that the goods, services, or works are appropriate and that they are procured at the best possible cost to meet the needs of the purchaser in terms of quality, quantity time, and location”.

    The use of E-Procurement has recently increased as technologies are positively affecting different sectors around the world. E-procurement, which is known as ‘electronic procurement’ or ‘supplier exchange’, is changing the way companies are sourcing their goods and services. Over the last ten years, institutions have been using more electronic tools to manage their procurement activities. Organizations in both public and private sectors are adopting systems such as the Electronic Data Interchange tool (EDI), Enterprise Resource Planning (ERP), and of course the internet to benefit them when sourcing their goods (Adebayo, Dec 2015).

    Advantages/disadvantages:

    E-procurement is a tool that yields benefits in all kinds of ways. It enables companies to decentralize operational processes and centralize strategic procurement processes which result in higher transparency and integrity, as well as reducing transaction cost and boost decision-making processes. Furthermore, e-procurement enables price negotiation and supplier evaluation. It also enables selection to be automated between an organization and its suppliers which prevents time consumption. Instead of exchanging contracts or sending out a tender document, the entire operation is computerized, and therefore it helps reduce human errors, increase operational speed and allow staff to focus on other tasks (digital, n.d.).

    Moreover, e-procurement enables companies to have a good workflow that facilitates end-users self-services. The inflows/outflows of goods through the supply chain improves as the tracing and tracking of those goods are automated which reduces emergency shipments. Institutions can visualize their purchasing behaviors to control purchasing management and save costs by identifying leverage buying power (digital, n.d.). Finally, being connected to external supply chains and enterprise resource planning (ERP) enables companies to get a better overview of supplier transactions and information by sharing real-time data through ERP systems which improve communication (digital, n.d.).

    It is important to note that there are also obstructing factors that prevent implementing e- procurement. Lack of a strong business relationship, financial support, and organizational priority can also from obstacles as developing countries are usually late adopters and do not invest money into early adopters’ trends. On the contrary, firms from countries with low uncertainty avoidance such as Germany or the UK are early adopters of e-procurement, while countries that are less reluctant to change such as Spain or France have lower adoptions rate (Namulo, 2017).

    Concept of implementing E-procurement:

    Electronic procurement innovations (EPIs) are being utilized by many businesses to improve their supply chain sector. (EPIs) support the different parts of the core procurement process of businesses such as supplier selection, order placement, order fulfillment, payment, and settlement.

    Many organizations are using the scheme below to help implement e-procurement into their supply chain (Namulo, 2017). Successful implementation of e-procurement depends on strong good management to achieve the firm’s performance goals. It is important to have sufficient awareness about what adopting e-procurement means on a long-term and short-term basis. E- procurement has become a powerful tool resulting in a competitive advantage for many businesses. It is integrated into many firms’ overall strategies as the role of IT has evolved from productivity to a strategic tool (KANDA, 2017).

    (Namulo, 2017).

    Five forms of e-procurement:

    E-procurement is categorized into five main applications which consist of E-ordering, E-sourcing, E-tendering, E-auctioning, and E-informing.

    E-ordering: The ordering process is one of the major challenges for suppliers and buyers. Based on (Zaman, 2019), E-ordering captures electronic data which includes orders, requests, and information received by the customer. E-ordering benefits both suppliers and buyers in different ways such as speed, security, standardization, and traceability. From the supplier’s side, E-ordering can reduce errors and eliminate papers as invoices are automatically generated from the order information through the internet (Edicom, 2020).

    E-sourcing: Described as the action of selecting and identifying the suppliers based on specific requirements. This approach allows the firms to select their preferable suppliers taking into account their competitive aspects.

    E-tendering: is the procedure when the suppliers receive the invoices and the purchase requests. This process allows both suppliers and buyers to realize their online transactions. Moreover, the procedure covers the tender requirements which will be exchanged electronically (Zaman, 2019).

    E-auctioning: Online reverse Auctions facilitate the process of a buyer investigation ability to select the right suppliers to buy products or services. Instead of negotiating with several suppliers before selecting one, online reverse auction enables temporal and geographical convenience as well as reducing the cost of contact, providing feedback and privacy (Namulo, 2017). In other words, the buyers give a contract to the suppliers who have ‘won’ the online process of bidding where suppliers compete in real-time (Zaman, 2019).

    E-informing: This method includes assembling and gathering information regarding purchases of buyers and suppliers by using web-based technology (Zaman, 2019).

    The supply chain performance is dependent on each of the stated independent e-procurement steps. These steps aim to improve the overall supply chain performance. (Zaman, 2019).

    Would you like to know more about adopting E-Procurement within your Supply Chain? Contact one of ModusLink’s Industry experts by clicking here.

    Bibliography:

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