Know It All Nev

On Demand Reviews – 2021

Category: Supply Chain

It’s Time for the Again-to-College Brews

Nifty Nev
Retail, Supply Chain |

How C-Stores Can Boost Profits as Parents Hit the Road Again

It’s that time of year again — and it’s been a long time coming. Back-to-school, in-person learning is finally a reality across the country. For parents and students alike, this time is filled with mixed levels of dread and anticipation. Among those who have been working and schooling from home for 15 months, it also means venturing out into town again and finally ending pajama days. Not to mention earlier mornings, more time driving in the car and, of course, more coffee in the morning and after-school snacking.

Convenience stores (c-stores) have a great opportunity right now to maximize customer value and grow sales. As people begin forming new habits for the next 10 months, it’s the ideal time to make a great impression to drive repeat business. CSP Daily recently suggested a few back-to-school tips for c-stores: clean up, enhance the taste and quality of prepared foods, and offer low prices. Good advice, sure. But I think there’s a more prescriptive approach for making the most of back-to-school demand.

Optimize foodservice

C-stores that offer quality foodservice are primed to capture more of the food-to-go market, which is set to grow 32% this year. We’ve already seen an uptick in the percent of fuel that head in-store to shop. So as school starts back, having an influx of hungry kids being driven around town may increase these sales even more.

To optimize foodservice, you must offer restaurant-quality food, quickly and consistently. But this can be expensive if not done well. It’s important to have  back software that provides a holistic view of demand by daypart and understand prep times and recipe requirements. I crave a good breakfast sandwich after school drop-off and the kids love hot pretzels after school, but we wouldn’t be happy if pretzels were only ready in the morning or if breakfast sandwiches were still sitting on the shelf at 3 pm. It takes detailed planning to ensure grab-and-go food is fresh and ready when demand hits. And it takes detailed recipe management production tools to ensure every order is made just right and waste is minimized. C-stores that do this well often see a 7.7 times increase in foodservice sales versus their peers.

Get inventory right

It’s no secret people like c-stores to be fast. The average shopper spends just 71 seconds searching for what to buy. That’s not a lot of time to make a good impression, but plenty of time to make a bad one. Clean c-stores are important, but so are shelves filled with products people want to buy — without having too much on-hand. We call this effective availability — the perfect balance of on-hand inventory aligned to demand. Not too long ago, clipboards, price books, and spreadsheets were good enough to place orders and maintain inventory. But that just isn’t true in today’s competitive environment when demand can shift suddenly and when there’s competition from virtually everywhere.

With the right back-office software, proper inventory management doesn’t have to involve a lot of manual work. Orders can be automated based on demand forecasting so that what’s arriving to the store is just the right assortment of goods to meet demand. Tracking inventory receipts against orders, pulling sales data from the POS and capturing transfers and markdowns can all be managed by exception, with alerts whenever there’s a discrepancy. Out-of-stocks can be detected with IoT-enabled shelf cameras. If there’s a recall, traceability at the product and lot number is key to keeping customers safe, your reputation intact and your business free from potential liability. Together, these things allow store personnel to focus on more important, like delivering exceptional service and a quick checkout. You optimize operations and reduce the cost to serve, all while delivering a better overall experience to the customers. Everybody wins.

Empower Your Employees

We all know the labor market is tight right now, and it’s about to get worse. This past summer when there was a big need, 32% of teens stepped in and took summer jobs, the highest since 2008. Now that summer is ending and kids are headed back to college, we’re likely to see a further dip in available labor.

C-store operators can focus on employee engagement to help increase satisfaction and improve retention. Empowering employees with mobile tools can make their jobs easier and more enjoyable. Doing daily tasks with a mobile back office system allows employees to stay out on the store floor, which helps build community and allows them to better serve customers. So, customer satisfaction rates increase as well.

How Luminate Store Execution Can Help

Blue Yonder’s Luminate Store Execution is a back office system designed to help c-stores gain visibility and control over the whole store, from inventory and pricing to advanced foodservice and integrated forecourt management. And it does so with a mobile-first approach that keeps associates on the floor to serve customers and help drive loyalty. Advanced food production planning and recipe management ensures food’s always fresh and ready, at the highest quality. Demand forecasting and automated ordering transforms inventory management from being a chore into a competitive advantage. The system simplifies daily back-office tasks such as shelf labels, wet stock management, cash handling, rebate tracking, invoice reconciliation and more. It works with any AP system and POS so you can keep the systems and hardware you like.

For me, back-to-school means adjusting to new routines, finding a way to balance everyone’s schedules, and packing up the flip-flops and pool towels. It’s about realizing the kids are another year older and making the most of these years that go by so quickly. And then there’s coffee – lots of coffee. Fingers crossed the talk about global coffee shortages is only a rumor.

To learn more about how c-stores can win during back to school with the right back office software, read our latest eBook.

Read the “Back-to-School, Back on the Road” eBook

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Evolving Provide Chain Fashions and the Outlook for Traders

Nifty Nev
Articles, Investors, Micro Supply Chain, Supply Chain, Supply Chain Approaches, Supply Chain Considerations, Supply Chain Models, Supply Chain Platforms, Supply Chain Strategy, Technological Talent |

Even before the COVID-19 pandemic came along, the supply chain was beginning to seriously pique the interest of institutional and retail investors, emerging from its undervalued status as a target for cost-cutting, and rising to recognition as a driver of customer service and competitive advantage.More than merely accelerating this effect, the pandemic has acted as a catalyst for supply chain focus, highlighting its criticality for successful commerce and the dire consequences of breakdown.It’s likely that from now on, supply chain performance and structure will receive a lot more attention from investors than before the Coronavirus crisis—but what should they look for when deciding which companies offer the most promising possibilities of healthy yields?That’s what we’ll explore in the following paragraphs, both as a general indication of the supply chain’s impact on future business performance, and a guide for potential investors.Which Supply Chain Approaches Will Drive ROI for Investors?For investors wishing to evaluate the supply chain as an indicator for company investment, it is first necessary to understand how supply chains must change to gain competitive advantage and, indeed, for companies to survive at all.So let’s take a look at some supply chain aspects that are fundamentally transforming, and consider the differences most likely to ensure positive returns for investors.1: From Support Role to Centre StageAt the point of sale, customers today enjoy an unprecedented degree of choice in the range, price, and quality of products on offer, primarily due to the development of mobile technology, connectivity, and platform-based commerce. These developments have also generated demand for a similarly diverse range of fulfilment options.Companies marketing most effectively are the ones that no longer focus solely on the benefits that a product offers to their customers, but also those provided by their fulfilment processes.In the same vein, enterprises that incorporate the supply chain into their plans for customer-experience enhancement, are gaining engagement and loyalty, and setting new levels of expectation, which others will need to emulate if they wish to compete.In short, the traditional view of the supply chain as a costly, but necessary, support function, existing purely to enable the balance of supply with demand, is losing its appeal. It will almost certainly continue to do so as the new view, in which the supply chain features strongly in marketing and customer service efforts, returns increasingly positive outcomes for merchants.2: From Asset Ownership to Platform ExploitationThe traditional approach to supply chain operation is one based on massive capital expenditure. Inventory, storage facilities, transportation assets, energy provision—all of these things have conventionally been sourced through capital spending, leaving many companies with phenomenal sums of money sunk into capital investments.Again, digital technology has arisen as the key to transformation, in the guise of services managed via online platforms. Unlike the asset-heavy supply chain, companies that exploit this ability to source just about everything “as a service” will find it easier to adapt to continually changing supply chain challenges and demands.The Many Purposes of Supply Chain PlatformsHow is digital platform use likely to be a future hallmark of supply chain success? To answer that question, let’s look quickly at how platform-delivered services and sales mechanisms can be exploited: Companies can shorten their supply chains by transitioning some, or all, of their sales to direct-to-customer (D2C) channels, thereby reducing their reliance on wholesalers, distributors, and other partners. Integrated networks of “as-a-service” platforms, including analytics engines that predict demand dynamically, can enable businesses to scale autonomously to meet peaks and troughs. That’s a big step forward from the historical approach of reactive inventory management and capital sunk into fixed assets for storage, fulfillment, and transportation. “As-a-service” logistics providers are able to support companies with rapid, scalable, support solutions, including on-demand fulfilment and last-mile delivery, via platforms that offer total visibility into the providers’ performance and the client/provider relationship. Companies with large, existing networks of capital assets can even exploit those by making them available to other entities via as-a-service platforms.The final point above highlights attractive possibilities for companies that remain locked into capital-heavy supply chains, since as-a-service platforms can help them use their assets more efficiently.However, the wealthiest prizes are likely to be enjoyed by businesses that opt for flexible, scalable, exploitation of platform networks, incorporating everything from D2C sales, through planning and analytics, freight shipping, and order fulfilment, to last-mile delivery.3: From People-Power to Technological TalentThe supply chain arena has always been about people and their relationships, along with asset utilisation, meaning that talent acquisition is typically focused on skilled operators and people managers.These qualities will continue to hold exceptional value in future supply chain operations. In addition, however, successful companies will be concentrating more on acquiring hybrid talent, that is, professionals with an in-depth understanding of technology and its integration with the physical elements of logistics operations and supply chain.Does this mean that investors should merely favour companies that value technological prowess in their talent acquisition policies?Unfortunately, it’s not that simple. Since digital transformation is a principal feature in all business functions today, competition for hybrid talent is stiff.Therefore, it would be more prudent to explore how effectively (or not) a company is implementing recruitment strategies that encourage candidates with the right mix of ops and tech expertise.For example, signs that a company is moving in the right direction, talent-wise, might include: The deployment of staff in new roles, absent the traditional supply-chain-centric titles and instead, hybridizing across data-science and logistics skill sets. An evident willingness to embrace remote and flexible working, perhaps utilizing a workforce combining regular employees, outsourced contractors, and home-based freelancers. The precise makeup of the workforce should not be of concern, but companies sticking exclusively with conventional employment contracts may not find it easy to build the right mix of talent. The establishment of in-house technology-based training programs or partnerships with relevant education providers.4: From Massive Production to Micro Supply ChainCost to serve has always been a telling, but tough-to-define, measurement of supply chain performance. Those companies that understand their cost-to-serve hold an advantage over their competitors. That’s because they’re able to see which customers, SKUs, and processes are most and least profitable—and respond accordingly.Soon, though, understanding cost-to-serve will become more straightforward, even as product lines and customer categories continue to diversify. Moreover, as a result of intelligent automation and similar digital technology advances, the supply chain of the near future will be one in which cost-to-serve can be analysed by a company continuously in real-time.That capability will be critical and will separate the most successful supply chain operators from the rest.The reason? Because of the evolving need to provide customers with ever-greater choices and meet their requirements for customisation and personalisation.Dynamic Supply Chain AdjustmentCompanies dependent on capital-intensive mass production and long-term supply partnerships are rarely nimble. As highlighted by the pandemic, they can struggle to adjust to new challenges and volatile demand fluctuations.Similarly, they often operate what is essentially a one-size-fits-all supply chain model that fails to take into account, or even provide visibility of, the costs involved in delivering a variety of products and product variants.Therefore, the best investment prospects will probably be those enterprises capitalising on powerful analytics platforms to interrogate cost-to-serve data for individual customers on the fly.They will link these capabilities to multiple, micro supply chains, exploiting a combination of mass production and postponement to complete the manufacture of a product as close to their customers as possible. Dynamic cost-to-serve data visualisation will allow them to monitor the actual profitability of channels, products, customers, and supply chains, and continually tweak and adjust for optimal margins.Bringing Production Closer to the CustomerMany of these micro supply chains will (in the western world) exist from end-to-end within a single national border, or perhaps within a region, rather than originating, for example, in China. Furthermore, they will use flexible contract manufacturing based on high levels of robotics and automation to operate on a largely variable cost base.As a result, these businesses’ supply chains will be faster, more flexible, less expensive, more sustainable, and less vulnerable to geopolitical issues and black swan events—and hence positive news for the supply-chain-savvy investor.Investing in Supply Chain? Think Nimble as the New NormalThe common thread running through all the observations and ideas in this article is of supply chains that can be both agile and robust, and above all, nimble and elastic enough to respond quickly to changes and challenges in geopolitical, social, technological, environmental, and commercial environments that are typical of the 2020s.Perhaps “typical” is the wrong expression, since, as the first couple of decades of this century have shown us, our world is subject to events and conditions that defy typicality. Still, that’s all the more reason for companies to think differently about supply chain operations.If you’re looking at supply chains from the perspective of an institutional or retail investor, the safer money would appear to be that which backs those nimble, agile, and asset-light supply networks. Meanwhile, the glory days could be over for companies relying on the capital-intensive, heavily integrated chains suited to a less tumultuous, bygone age.Best Regards,Rob O’ByrneEmail: [email protected]Phone: +61 417 417 307

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Warehouse Administration Programs are Essential for Buyer-Centricity within the Submit-COVID 19 Period

Nifty Nev
Logistics, Supply Chain |

As e-commerce growth is continuing at a rapid pace, companies are having to rapidly change their logistics footprint (both operational and physical) and fulfillment to match rising customer expectations. As we move into a post-COVID-19 environment, logistics executives plan to implement or enhance their technology, including warehouse management systems (WMS), transportation management system (TMS), artificial intelligence/machine learning (AI/ML) capabilities, and cloud infrastructure, as highlighted by the recent 2021 Blue Yonder Logistics Executive Survey.

Top of mind are logistics systems related to the fulfillment process improvement and the scalability of IT infrastructure, as customer-centricity has become the way to win. Per our understanding, this current landscape is also reflected in the recently released 2021 Gartner Critical Capabilities for Warehouse Management Systems (WMS) report[1] where per our understanding innovation is continuing to differentiate WMS offerings and technology sophistication is a key criterion.

Blue Yonder WMS

We are excited to highlight that Blue Yonder has been again named in the Critical Capabilities for WMS report and has been scored amongst highest 3 evaluated vendors across Level 3 and Level 4 Warehouse Operations use cases. The Gartner findings and identified trends we believe support our directions and commitment to innovate in order to enable our customers to operationalize and unify digital distribution across warehouse, labor, automation, and transportation.

Blue Yonder’s recognition includes:

Received second highest rank in Level 3 Warehouse Operation use caseReceived the third highest rank in the Level 4 Warehouse Operation use caseScored in highest 4 for Level 5 Warehouse Operation use case

We believe that our recognized strong labor and workforce management, analytics, mobile reporting, exception monitoring, and usability are helping our customers to enhance operational efficiencies and agility. We also believe that our strong implementation and system management tools, adaptability, templatizations (such as graphical workflow visualization tools), and integration utilities (with more than 200 APIs) reflect our ability to enhance our customers’ digital transformation.

Expanding Capabilities to Match Customer Needs Post-Pandemic

Based on our understanding, the Gartner report emphasizes technology trends such as labor management, work planning and optimization, multitenant cloud solutions, and robot integration capabilities, as customers, per our interpretation, are seeking a differentiated set of WMS capabilities to better compete, particularly as the world begins to emerge from the pandemic.

To match the customer trends highlighted in the report, we believe Blue Yonder is:

Leveraging its AI domain expertise for Warehouse Tasking (see also Warehouse Tasking animation video) to greatly improving delivery performance resource utilization and Robotics Hub (see also Robotics Hub animation video) to accelerate onboarding of multiple robotics vendorsEnabling an API-centric approach through its Luminate™ Platform to connect its WMS with transportation management, and Luminate Control Tower to enable Unified Logistics.Continuing to innovate with the upcoming launch of its Luminate WMS, a SaaS-native solution powered by microservices such as Fulfillment-as-a-Serviceto enable last- and middle-mile fulfillment including micro-fulfillment centers (MFCs) and dark stores.Launching its Warehouse Execution System, amulti-tenant, API-led solution to intelligently synchronize, sequence, and assign work to both labor and machine.

Warehouse Tasking Video:

Robotics Video:

To learn more, download the 2021 Gartner Critical Capabilities for Warehouse Management Systems and 2021 Gartner Magic Quadrant for Warehouse Management Systems reports[2]. Also, learn more about Blue Yonder’s Warehouse Management and Labor Management solutions.

Related Content

Gartner, Magic Quadrant for Warehouse Management Systems,” Simon Tunstall and Dwight Klappich, 30 June 2021

Gartner, Critical Capabilities for Warehouse Management Systems, Simon Tunstall, Dwight Klappich, 28 July 2021

Gartner and Magic Quadrant are registered trademarks of Gartner, Inc. and/or its affiliates in the U.S. and internationally and is used herein with permission. All rights reserved

Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner’s research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose

[1] Gartner, Critical Capabilities for Warehouse Management Systems, Simon Tunstall, Dwight Klappich, 28 July 2021

[2] Gartner, Magic Quadrant for Warehouse Management Systems,” Simon Tunstall and Dwight Klappich, 30 June 2021

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How Blocking the Suez Might Dampen Summer time Demand

Nifty Nev
artificial intelligence, automation, demand, demand forecasting, Demand forecasting in supply chain, disruption, forecasting, machine learning, probability, resilience, Retail, Supply Chain, supply chain disruption |

In what feels like an anti-climactic end to an incredible story, the Ever Given – the boat that broke the internet when it blocked the Suez Canal back in March – has finally docked at Felixstowe, England, with its cargo from the Far East – a full four months after it was scheduled to arrive. 

It was one of those great black swan events that kept many of us enthralled for days, but what can this whole event teach us about supply chain resilience? Billions of pixels of digital news have been used to describe how supply chains need to understand the macro picture, like shipping delays and supply impacts. Today, I want to focus on the micro. I want to follow the ripples of the Suez Canal situation all the way to the UK high street.

In an earlier blog, I wrote about volatile customer demand and how a modern machine learning forecasting algorithm needs to account for uncertainty. To re-cap, the Blue Yonder demand forecasting service looks for relationships between influencing factors, such as weather, price, and season, rather than attempting to layer on top of a demand forecast based on historical sales. That is the key to understanding uncertainty and driving better forecast accuracy. Now that the Ever Given’s cargo has finally landed in the UK, there is a lot of uncertainty about to disembark.

Uncertain Supply

The Ever Given holds around 18,000 shipping containers containing a mix of perishables and non-perishables. The perishables will be destroyed, but many of the non-perishables will have been timed for start of spring. Some may go directly into UK market via discount retailers or re-directed to markets further afield.  For what remains in the UK market, retailers are faced with inventory that is out of sync with the season.  Couple this with the increased cost of shipping caused by the pandemic and you’ve got the perfect storm of tight margins, increasing prices and too much stock.

Uncertain Demand

Based on historical data, we know that customer sensitivity to price change is not uniform, either geographically or across the year. A price change for T-shirts in mid-summer may not have the same effect on demand in spring, unless there’s also an unseasonal heatwave. The location of the store also plays a critical role in this relationship, with coastal stores typically seeing higher traffic during the summer. 

This is far from a typical UK summer though. Temperatures have been hotter and drier in the north, while the south has recently seen storms. Meanwhile, with COVID-19 restrictions on travel and changing regulations, more people are staying at home for holidays.

Many of the items on the Ever Given were originally due to be sold at the end of spring. Seasonal items are typically discounted at the end of the season, but with higher shipping costs, increasing retail prices and potentially more local competition on the high street, you need to understand how your customers are likely to behave, while being ready to pivot when they surprise you by shifting purchases back to stores, or looking for outfits to hit the town again.

Blue Yonder Forecasts Better

Blue Yonder can help automate your demand forecasting with its granular, proprietary forecasting service designed to self-learn trends at local levels and dynamically respond to the crazy weather or changing store patterns from the stay-cation craze of 2021. A demand forecast that understands complex uncertainty but simplify human control can help build better allocations, improve resourcing and ultimately feed into better pricing decisions. It will help your business teams navigate the uncertainty that surrounds us every day, and lead to improved business KPIs.

Black swan events like the Suez Canal blockage will always occur, and tools like Luminate Control Tower can help us better manage them. We cannot reasonably predict black swans, nor can we learn anything meaningful from them for future forecasts. It is the daily uncertainty that we need to manage; and if the management of day-to-day disruption is automated, planners should have more time to deal with the black swan events when they occur.

Like the slow progress of the Ever Given out of the Suez Canal, the effects of uncertainty can take a long time to manifest in the market. With the lived human experience of pandemics in short supply, highly intelligent and automated demand forecasts are the critical foundation of a resilient supply chain. Major shocks get most of the attention, but markets are uncertain every day. Sometimes because of weather, sometimes because of price, generally because of the combination of all the factors operating together in a connected network at the local level.

If the future of retailing continues to be uncertain, the heart of your supply chain needs to do more than cope. It needs to thrive by embracing uncertainty.  Blue Yonder’s unique approach has been designed to deliver the supply chain of tomorrow. Please contact us if you’d like to discuss how we can help transform your business.

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How Formal Coaching Is Higher Than Trial and Error

Nifty Nev
Education Services, Events, Supply Chain, technology |

This blog is authored by Sophia Han, Educational Services intern who will be a senior at Arizona State University this fall

How much is your time worth to you?

We often hear “training is not necessary,” “it costs too much,” or “takes too long.” For these reasons, companies do not invest in formal training programs and instead, have their employees learn through trial and error.

While attending Blue Yonder’s space planning training session this week, it became evident that formal instructor-led trainings provide great value to attendees. During the training, an attendee commented that they ended up restarting one of their projects from scratch due to not manually saving the project file before their computer crashed. They didn’t know that Blue Yonder’s solutions automatically save projects every ten minutes (fully adjustable, of course). Instead of accessing the backup file, the individual restarted their project, saving over their original work with the new version. A day’s worth of work gone because they didn’t know about that particular feature of the solution.

Throughout the rest of the course, as users learned more, their faces would light up when they learned new tricks or features that would inevitably help reduce frustrations and make their day-to-day tasks much more efficient.

Some of the features highlighted in formal instructor-led trainings are things that, unless the user has a lot of time to play around, are unlikely to be discovered or used for what they are designed, with efficiency in mind. Similar to Excel, it is entirely possible to go through the program without prior experience and learn how to use V-look ups, create pivot tables and do calculations. There’s always going to be Google and other communities for you to look up functions. However, if you didn’t even know about the existence of V-look ups, how would you search for them? There are bound to be more obscure features that unless you are trained on them, you won’t know about. This is the case with many software products.

You can learn on your own how some of the features work, and oftentimes, you will be able to manually do what you need to do. However, by having an instructor guide you through the software and answer questions as they come up, you can learn to have the solution do what would have taken you hours to do manually.

Software is here to make your life easier, and the developers want to help you be more efficient. One of the best ways to do that is by reading through the product manual to learn all the tips and tricks, though it’s not recommended because it’s time-consuming and only explains the mechanics. To really understand the product and the why behind the how, instructor-led classes are the best option to provide context and better enable the user to apply the information in other aspects of their role.

Technology Services Industry Association (TSIA) conducted a survey on customers who have been formally trained. They found that 65-73% of people who’ve taken training used the product more, over half were able to use more features, and 85-91% were more independent, with the variations in percentages being attributed to different methods of learning. It’s easy to see the value in participating in formal training, especially for something as important, and potentially time-consuming, as space planning.

To view Blue Yonder’s upcoming classes on space planning from our expert instructors, click here or contact Education Services at training@blueyonder.com.

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6 Key Necessities to Choose your 3PL Firm

Nifty Nev
3PL, 3pl company, 3pl outsourcing company, Outsourcing, selecting 3PL, Supply Chain, third party company, third party outsourcing company, Videos |

The criteria for selecting the right 3PL company are numerous. We hope that through these tips you’ll be able to ensure your company makes the right outsourcing decisions.[embedded content]Related articles on this topic have appeared throughout our website, check them out:Best Regards,Rob O’ByrneEmail: [email protected]Phone: +61 417 417 307

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An Clever Technique to Enhance Demand Forecasting

Nifty Nev
accuracy, artificial intelligence, automation, demand, demand forecasting, forecasting, machine learning, probability, Retail, Supply Chain |

I’m a cyclist. But I have a confession to make. I’m a fair-weather cyclist. While riding my bike helps keep me healthy and gives me time to think, when I get caught in a rain shower, I know I’ll be spending a significant chunk of my afternoon cleaning mud and gunk off my bike. And so, based on my willingness to accept risk that day, I make a judgement call. Before I leave the house, I always consult the weather app on my phone. Anything more than a 30% chance of rain and I stay inside.  I estimate that has saved me hours of de-greasing in the past year alone.  

I find it interesting that concepts that we readily accept with our personal devices don’t always seem to resonate in the workplace.  When I’m considering whether to risk cleaning my bike after a ride, I rely on a weather forecast that may or may not materialise. I don’t question whether the forecast is right, I accept that it is uncertain; sometimes it rains, sometimes it doesn’t. I make my decision based on a preference for staying dry.  

Demand Forecasts are Uncertain 

The same principles of risk and uncertainty that we accept in weather forecasts apply equally to demand forecasts. Order too much and you lock up capital in slow moving inventory or eat into margins for perishables Order too little and you run out of stock and disappoint customers. Planning inventory relies on an accurate demand forecast. Understanding that forecasts always include a level of uncertainty is the critical first step toward resilient supply chain automation.  

So how do you build a resilient demand forecast that understands uncertainty? Traditional approaches to forecasting are fundamentally flawed. Basing a demand forecast on sales history alone doesn’t measure true demand. Local out-of-stocks are written into the sales record alongside historical weather patterns and events, creating future manual work for demand planners, such as holiday and cultural events like Easter, or trying to “correct” last year’s wet-and-washed-out summer. This problem is compounded when daily profiles are applied to a baseline forecast before manual adjustments are made. 

Weather only repeats itself 15% of the time, but it’s often used as an influencing factor for demand.  We shouldn’t be surprised that demand planners spend a considerable amount of their time tuning algorithms then adjusting the output to something that looks more “correct,” based on their experience. The problem with experience, especially in today’s fast changing market, is that no-one really has relevant experience that they can draw on.  

McKinsey research tells us that the past is no longer a guide to future behaviour, as consumers increasingly shift channels and are looking for new brands and more convenient experiences. Forecasting capabilities that look backward to predict the future are fundamentally flawed. They struggle to adapt to changing shopper behaviour and cannot measure uncertainty without making assumptions. They leave demand planners exposed to inventory risk. 

Embrace Uncertainty in Demand Forecasting 

Blue Yonder corrects these flaws by forecasting via a unique and more accurate approach. Our demand forecasts are built on machine learning analysis of the relationships between many different historical data sources, such as weather, special events and price. We don’t use artificial intelligence to layer influencing factors on top of a baseline, but rather look at how strong each influencing factor is at any given point in time and use this as the basis for forecasting into the future. Missed sales are accounted for and special events are automatically moved as calendar dates shift. 

Once trained, the forecast engine tests itself against actual sales every day to ensure that as customer behaviour changes, the model is able to self-correct. Configurations like weekly profiles and assumed statistical distributions are made redundant as the forecast is created every day from the ground up, using the most recent data to improve accuracy. This changes the role of demand planner from algorithm tuner into data custodian and strategic advisor. 

Our unique demand forecast predicts the full spectrum of demand, not just the mean, and it calculates the probability of every unit of demand at the item, store, day level rather than assume a shape or profile. This information becomes valuable when you later want to make inventory decisions, recommend price changes or make assortment changes. Irrespective of how close your mean might be to historical sales, there is always a chance that customers will want to buy more or less of what you predict.  

A demand forecast that intuitively understands what factors drive shopper behaviour is useful for predicting demand for all retail assortments. Fresh produce demand can vary widely across the week as the weather changes. Promotional demand varies depending on pay day, local competition and the season. And, of course, seasonal products like BBQ accessories and clothing can depend disproportionality on weather. Chasing volatility manually cannot be accomplished with the precision required to make a difference at the point of purchase. Planners might plan at a cluster level, but shoppers act locally.  

Accurately understanding this complexity at the local level is extremely useful for creating better demand predictions but automation is not possible without trust between humans and the machines that serve them. The complex reality captured by our forecast engine is presented to humans in a meaningful way, with data grouped in buckets that make sense in plain language. Weather, promotion or trend rather than temperature or shelf position, breaking the black box problem that plagues most machine learning solutions.  

By adopting an automated, self-learning demand forecast like Blue Yonder’s, planners no longer need to tune algorithms or adjust forecasts to account for changing weather or promotional calendars. The forecast can be largely automated, leaving planners to focus on system-generated exceptions, and collaborating with others on how to best use more intelligent and accurate forecast to drive better results, like getting the right amount of inventory where it is shoppers are likely to want it.  

This re-imagined approach is all very simple to the user. A lot like my Sunday afternoon when I can skip giving the bike a bath and focus on more productive things.  

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2021: Provide Chain Tendencies

Nifty Nev
2021 Supply Chain Trends, Supply Chain, supply chain trend, Trends, Videos |

The COVID19 pandemic put unprecedented pressure on the supply chain, causing many businesses to reconsider their options. So it would be interesting to reflect on what’s happening in the industry today and share some insights on what the companies should focus on next.Watch this:[embedded content]Related videos on this topic have appeared throughout our website, check them out:Best Regards,Rob O’ByrneEmail: [email protected]Phone: +61 417 417 307

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Staying Impartial within the Age of Enterprise Partnership Tradition

Nifty Nev
Articles, Consultant Partnerships, Consulting, partnership culture, professional services, Supply Chain, vendor partnership |

A recent catch-up session with one of our software suppliers left me reflecting on how business relationships are changing, primarily in their focus and perceived value.Partly to process those reflections internally, and equally for you to consider before engaging a supply chain or business consulting firm, I thought I’d share my perception of an emerging development in partnership culture, seemingly fuelled by the popularity of cloud delivery for enterprise software.While undoubtedly beneficial and appropriate in many current business scenarios, partnership culture is challenging consulting companies like ours that believe we serve our clients best by acting independently and agnostically to drive desirable outcomes.Partnerships: Essential in Supply Chain, Less So in ConsultingAt Logistics Bureau, we’re in the supply chain game, and if you’re in it too, you know that it’s one in which a reliance on partners is nothing new. Indeed, few supply chains can operate at all without partnerships between a company, its suppliers, its customers, and logistics service providers.This need for a symbiotic existence doesn’t require much explanation, as it’s the very nature of the process needed to take raw materials, manufacture them into products that people need, and then sell and deliver them to those people. That’s the way it has worked for centuries.However, the same cannot be said for the professional services sphere and those enterprises operating within it.As one of those enterprises, Logistics Bureau has always prided itself on its independence and an agnostic approach to finding solutions for its customers. It’s one of our core values, and it has served our clients and our business admirably for more than two decades.Nevertheless, a recent meeting with a software vendor brought home to me how profoundly digital technology, primarily when provided via cloud-hosted SaaS delivery models, influences the focus of business relationships. It’s a factor that may, in time, make it less easy for professional service providers to remain independent.The Problem with Vendor/Consultant PartnershipsFor me, it’s not hard to see the conflict that partnerships with vendors would ignite in our business.We could no longer serve our clients with objectivity if we were committed to supporting a specific brand, manufacturer, or vendor. Without such a commitment, though, there can be no partnership—hence we choose to remain independent.Additionally, partnerships throw up other issues which would impact our services. Confidentiality, for instance, often features as a critical condition under which a client engages us. Collaborating with vendors or service providers would inevitably jeopardise our ability to guarantee 100% confidentiality.Even if we were able to promise confidentiality, it would harm a client’s trust in us if we were known to collaborate with other agencies as part of our service provision, and something should leak during our engagement. As sure as we might be that the leak did not originate from us or our “partner”, the onus would be on us to prove that—or pay the opportunity cost of a client that’s no longer sure of our integrity.The Pressure to PartnerSo what’s the rub? Well, here it is…As much as the supply chain and logistics industry depends on good business relationships, innovative thinking, robust processes, and effective management, digital technology is pervasive.Let’s face it, IT has revolutionised the way supply chains operate, and it would be unreasonable to think that it will not continue to do so. Short of an almost literal return to the dark ages, we need digital innovation. The more technological sophistication we can apply to supply chain management and logistics execution, the greater the results will be for all concerned.But behind every technological solution, as mentioned, is a proprietor. In the case of cloud solutions, this is critical because software customers no longer buy the product. Instead, they pay to use it.It’s a model with many mutual benefits for software customers and vendors. Nonetheless, it pays the vendor handsomely to a) ensure the customer will use the product for the longest possible time and b) encourage adoption by the most significant number of users possible.But We Want to Use Software, Not Sell It!As consultants, we rely on the speed and efficiency of modeling software to help us give clients the answers they need. However, this is where the trend towards business partnership may soon begin to make objective consulting a more challenging service to provide.Unlike general business software, such as MS Office, or even sophisticated enterprise solutions like SAP, best-of-breed supply chain applications may not be readily available to smaller consulting firms for much longer. At the very least, acquiring them could become a lot more challenging for those wishing to retain independence and impartiality.Portentously, one of our technology suppliers recently informed us that if we wish to continue using their product as a tool for our consulting projects, we will need to partner with them and market their product to our clients.Furthermore, we would need to inform the vendor about every project on which we use the software, providing information about the client and the purpose for which the technology would be used.Although selling products goes against all our core values, and we don’t wish to operate in the realm of software reselling, these were the only conditions under which we would be allowed to retain access to the tool in question.An Incredulous Proposal?While it was clear that the proposal seemed perfectly reasonable to the vendor, my vexation with it is best explained using an analogy.For example, would it be reasonable for a truck manufacturer to impose similar obligations on 3PL logistics providers or carriers?Imagine the incredulity if you are a 3PL manager and the truck manufacturer says the following to you:“You can buy our trucks, but only if you tell us about every client whose goods you carry on them, what goods you carry for them, for what purpose—and while we’re at it, we want you to help us sell your clients a truck or two. If you don’t agree to comply with these conditions, you won’t be buying any trucks from us.”That’s pretty much the essence of the ultimatum we received from our former software vendor. As a result, we no longer work with their product and have sourced an alternative while considering our longer-term technology strategy.Planning for ChangeIt will be interesting to see if, as time goes on, other vendors in the same software niche place similar contractual demands on their customers in the consulting profession.If such expectations become the norm, companies like ours will find it increasingly difficult to operate without divesting ourselves of the objectivity and impartiality our clients expect. That is a path that Logistics Bureau will never take!As much as anything, this scenario highlights how changes in business relationships and the rapid evolution of problem-solving technology could bring about transformation in the consulting industry.We’re basing our longer-term plans on the possibility that if we want to continue using specialist modelling software to improve project outcomes for our clientele, we need to get into bed with specific vendors or start developing software products for ourselves.The first option goes against our principles, and is therefore out of the question. Consequently, we are pursuing the second option, although it is costly and involves diversification into tech development alongside our roles as experts in business practice and process.How Do You Feel About Consultant/Vendor Partnerships?It has been somewhat cathartic to reflect on our software-vendor mini-crisis, but aside from that, I guess it could be helpful as food for thought if your business seeks help from a consulting company at some future point.For instance, I’d love to know your thoughts on the following questions: ·         Would you be comfortable engaging a professional services company, knowing it was locked into collaborative partnerships with software, systems, or equipment vendors and obliged to market their products? ·         How critical do you see the need for independence and vendor-impartiality in the services offered by a consulting firm?It’s always good to receive the perspectives of the types of companies we serve, so I welcome your views in the comments section below.However, at Logistics Bureau, our position is clear—we will do what is necessary to stay independent, be true to our core values and avoid exposure to the potential issues arising from vendor partnerships. We’ll continue to embrace the best digital tools available to help our clients understand, manage, and improve their supply chains—but we won’t be selling software any time soon.Best Regards,Rob O’ByrneEmail: [email protected]Phone: +61 417 417 307

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Christmas in March? How One Chinese language Port Would possibly Shake Up Your Vacation Plans

Nifty Nev
Logistics, Supply Chain |

Nintendo Switch, iPhone, Tamagotchi, and Teddy Ruxpin… these have all been the hottest retail items in holidays past, and they all happen to be electronics too. Coincidence? Nope. And with online electronics sales up 145% during the 2020 holiday shopping season, this trend isn’t going anywhere anytime soon. 

But what if I told you that 90% of the world’s electronics go through the same port? And what if I told you that port had a recent COVID-19 outbreak, leaving a backlog of over 160,000 40-foot containers, causing a domino effect on the entire shipping industry that might take a year to get sorted out?  

Well, friends, let’s talk about the Port of Yantian. 

Yantian, a port just north of Hong Kong, was shut down for almost a week at the end of May due to a spread of coronavirus amongst dock workers. And while, thankfully, the infection rate has since improved and many operations have resumed — the damage has been done.  

The backlog is being felt all over the world. From ships waiting to dock in Guangdong to empty containers stockpiling in the U.S., the already-stressed-out shipping industry is spread so thin from the pandemic that just one event, like what’s happening at Yantian, can cause lasting waves to a very delicate ecosystem. And this is one storm that might take months, or up to a year, to calm. 

So what do we do now? How do we save the holidays, and — more important — how do we help resolve these supply chain fractures? 

Balance Efficiency with Resilience 

Let’s start by asking ourselves, “Why do 90% of the world’s electronics go through the same port in the first place?” It’s because supply chains are designed to be hyper-efficient, and in this case, using the Port of Yantian has become the quickest and most cost-efficient way for shippers to send the next holiday crazy all over the globe. Until now. 

In order to build resilient supply chains that can withstand pandemics, natural disasters, and political unrest, there must be trade-offs for efficiency — resilience comes at a cost. For example, manufacturing everything in China might seem like the cheapest option, but having some diversification with near-shore sourcing would certainly make the current situation a bit less painful.  

The same theory applies to diversity in shipping ports. Sure, it might make the most short-term financial sense to use the same Chinese port for goods made in China, but this line of thinking certainly won’t make a resilient supply chain. Instead, we must start leveraging some different routes to spread capacity across multiple ports — even if it’s not the most efficient method. Otherwise, we run the risk of big delays when a disruption hits. 

Gain Visibility Into Downstream Impacts 

Designing a resilient supply chain helps in the long run, but what about a disruption that’s happening right now? Identifying an event, like the current situation in China, is the first step. That’s visibility. But here at Blue Yonder, we talk a lot about end-to-end visibility, and that means providing context to see downstream impacts. 

For example, let’s say you have one of the containers in the logjam at Yantian. You need to know the impacts to inventory, production capacity and sales. The modern-day supply chain uses AI and ML to guide and inform human decision-making by providing insights to see, understand, act, and learn on real-time information from the entire digital ecosystem.  

Break Down Silos 

Historically, supply chains have been comprised of silos that don’t share data across systems, departments or suppliers. But now that we’re looking at visibility holistically, we can start to coordinate across the verticals and break down those silos. By sharing real-time disruptions, inventory and forecasts, communication is greatly improved and decision-making can be dynamic — rather than always reactive. 

Removing the silos leads to a more collaborative supply chain. This collaboration ensures events are identified and downstream impacts are minimized, whether this is the Port of Yantian, the Suez Canal, or the next global shipping disruption.  

Blue Yonder’s SaaS-based supply chain solutions can help solve strategic shipping issues, like balancing efficiency with resilience, but we also can help navigate short-term disruptions — like getting the most-popular electronics from China delivered to the right places, just in time for the holidays.  

To learn more about building a resilient supply chain, head over to our thought leadership hub. 

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