Imagine walking into a supermarket expecting to stock up on essentials only to find empty shelves. This isn't a scene from an apocalyptic movie; it was the great toilet paper shortage of 2020, driven by panic buying and supply chain challenges during the COVID-19 pandemic. In 1973, a similar toilet paper scarcity gripped the nation, triggered not by a pandemic but by a joke from late-night television host Johnny Carson.
These two scenarios highlight a crucial truth: supply chains are susceptible to disruption. While the causes vary, the outcomes—empty shelves and frustrated consumers—are strikingly similar.
Supply chain disruptions are no laughing matter. However, history also tells us they aren't insurmountable. Businesses can leverage supply chain planning tech to survive disruptions and build resilient supply chains.
In this blog post, we'll discuss the transformative potential of supply chain technology innovations, explore how supply chain technology can build agile supply chains, and share emerging trends that will affect the future of the supply chain. We will also discuss how Extensiv can help you with supply chain planning and win against stockouts, excess stock, and increased holding costs.
The evolution of supply chain technology has a long history. Before technology, supply chains operated using manual processes and communication methods. Transportation and inventory management were orchestrated with limited visibility and control, which led to errors, inefficiencies, and longer lead times.
The Industrial Revolution produced the first significant shift in this area with the introduction of steam engines and railroads. Then, in the 20th century, the introduction of mass production along assembly lines created more interest in the importance of technology in the supply chain. Today, many supply chains operate using advanced software solutions like Extensiv to evolve in tandem with Industry 4.0.
Industry 4.0—and more specifically Supply Chain 4.0—comprises artificial intelligence (AI), machine learning (ML), cloud computing, the Internet of Things (IoT), advanced robotics, and big data analytics, which has transformed many industries such as retail, 3D printing & additive manufacturing, and more. According to McKinsey & Company, the potential impact of Supply Chain 4.0 is a whopping 75% reduction in lost sales, about 30% lower transportation and warehousing costs, an 80% drop in administrative expenses, and up to 75% less inventory, driving efficiency to new heights.
The best supply chain technology solutions comprise tools designed to enhance efficiency and collaboration—both in microcosm of your individual operations and across the entire supply chain. Here are some supply chain technology examples currently shaping the industry:
Warehouse management systems (WMS) streamline every aspect of warehouse management—from pick, pack, and shipping processes to inventory tracking and replenishment, all from a single interface. The best warehouse management software should also have integration capacity with other tools like barcoding & RFID tagging, software solutions such as ERP, transportation management systems (TMS), customer relationship management (CRM) platforms, and logistics software.
For logistics providers, Extensiv 3PL Warehouse Manager provides unbeatable solutions for the unique needs of 3PL warehouses. Organizations like The Northeast Group use our warehouse management software to elevate their fulfillment business. In the past, they had a hard time finding and retaining developers who could update and maintain their homegrown WMS. Today, the Northeast Group’s entire fulfillment business runs through Extensiv, from order creation to product receiving, inventory, analytics, and shipping. They no longer need full-time developers, saving them over $100,000 per year on IT costs.
AI-driven solutions predict demand by analyzing historical data, market trends, and external factors using machine learning algorithms. This helps businesses leverage algorithms for accurate demand predictions and identifying trends and patterns that may impact demands like seasonality or economic changes.
Most order management systems (OMS) have demand forecasting capabilities. A great example is Extensiv Order Management, which provides end-to-end supply chain analytics and forecasting solutions with demand planning capabilities. Our platform uses historical sales data to calculate how many units you need to reorder within a certain period. The software then automatically creates purchase orders with recommended reorder quantities, streamlining the replenishment process by factoring in forecasted growth, demand, and vendor data into these calculations.
TMS solutions help businesses manage goods mobility from route planning to freight payment to ensure timely and cost-effective deliveries. A best practice is to integrate your TMS and WMS to get a holistic view of operations, from inventory levels to shipment status. This real-time visibility empowers you to anticipate issues, adapt plans, and ensure smooth operations.
Advanced TMS employs algorithms for route optimization, tracking, and cost optimization. Extensiv Integration Manager enhances connectivity with your fulfillment tech stack and shipping software and automates the flow of order data from warehouse to customer's doorstep. Here’s a snippet of a review from an Extensiv Integration Manager on G2:
IoT connects physical devices like trucks, warehouses, sensors, and tags (like on inventory) to the internet, providing real-time data and control over supply chain assets. It enables tracking of conditions such as temperature, location, and movement, ensuring supply chain visibility and responsiveness.
Extensiv’s suite of software solutions enhances this capability by seamlessly integrating IoT technologies into fulfillment and warehouse operations. For instance, we can integrate thermostats, sensors, RFID tags, and mobile barcode scanning technologies. For warehouses specializing in cold storage, IoT-connected thermostats and sensors can regulate and monitor environmental conditions. This ensures that sensitive inventory remains unspoiled while streamlining the tracking process.
Inventory management software (IMS) tracks and controls inventory before it’s sold. The purpose of an IMS is to ensure your operational costs are low and maximize your profits by ensuring you have the right amount of stock to meet consumer demand without over-stocking.
Manual methods like inventory management with spreadsheets are common with smaller and/or younger businesses, but they're prone to error. Brian Hahn, the Co-Founder & COO of Nomad Goods, explained that he wasted a lot of time estimating inventory levels manually with Excel. When they switched to Extensiv, they were able to track hundreds of SKUs across multiple channels, expand their sales channels, grow their product lines, and manage inventory across multiple warehouses. Since the switch to Extensiv, order volume on Nomad's Shopify site grew by an average of 14.6% while Amazon order volumes grew 125%.
In this section, we’ll discuss emerging supply chain technology trends and technological advancements that businesses should stay aware of (and adopt early to reap their immense benefits):
Also, smart vehicles can measure truck utilization, while equipment such as ‘smart pallets’ can pinpoint the location of a particular pallet in the supply chain. According to the KPMG report linked above, 63% of respondents surveyed believe many repetitive tasks will be replaced by automation, while another 59% expect high risk injury activities to become automated.