Designing the Supply Chain of the Future

Supply networks are unique in that they are incredibly complex and are made up of a large number of interdependent partners. When attempting to design supply networks that are as efficient as possible, the aim is to create a solution that keeps little to no materials in stock during the intermediate stages. Stockless production has even been established in many places. However, over the past few years it has become apparent to every stakeholder in this type of network that this can lead to some unwelcome negative consequences, especially when faults occur.  The current crisis and the crises of recent years have led to concepts being incorporated into these networks that help improve the resilience of the design. As a result, the desired supply chain with no buffer capacity has morphed into a network with minimal yet sufficient storage capacities. Another key component in developing the required resilience is the introduction of controlled failure strategies using risk assessments.

Influence of current trends on the supply chain

In recent years, consumer behavior has undergone radical and long-lasting change. Consumers no longer have to rely on local dealers to find what they are looking for, being able instead to research and purchase products online – often straight from a smartphone. Very rarely do consumers make investments without having researched the price, quality, availability, and customization options beforehand. If a product is poorly received on social media or in customer reviews, this often has an effect on other consumers' decision to purchase, therefore affecting the sales of a product. Functioning supply chains guarantee high availability, appealing quality, and low costs. This all leads to increasingly individual production operations, shorter product life cycles, and greater customer expectations.

How do we encourage the underlying network of interconnected companies to work closely together to manufacture and supply the best possible product for the target customer group?

Furthermore, conventional distribution channels are now only a few of the many options for bringing goods to the consumer. These omni-channel or multi-channel concepts alter the logistics chain and present the logistics sector with new challenges: warehouses are supplying directly to customers while shops are becoming increasingly responsible for staging, outbound deliveries, and acting as collection points for possible customer returns.

Strategies for effective control

In order to link together flexible, adaptable, and reliable networks, it is necessary to take a holistic view of the underlying information in overarching IT platforms. These platforms access the information on the associated systems and pass on the data needed for decision-making to the people who have control over the network. All orders, master data, stock and stock changes, actors, and the status of every stakeholder is linked in real time. This means that the supply chain can be actively checked and controlled.

A planning platform structured in this way plays a strategic role in the intelligent networking of material flows, processes, and supply chain partners. It is essential to have a higher-level control system to optimize, control, and monitor all the data and goods flows within the supply chain, in order to be able to clearly trace relevant goods movements and postings. Intelligent strategies form the basis for the straightforward usability of the platform. In an ideal scenario, these strategies help to keep the system balanced and in time using self-regulation.

Technological advancements

Our technological advancements mean that nowadays we are able to implement a variety of supporting measures for which we lacked the machine resources just a few years ago. Most of the concepts for these information-supported assistants were developed many years ago, but the data storage and processing capacity has only become available in recent times.

Forecasting and systems using artificial intelligence are able to anticipate customer demand and trigger an appropriate transfer of goods in the logistics network, in order to ensure that actual customer orders are fulfilled as quickly as possible.

Machine learning makes it possible to detect patterns that could lead to problems within the systems connected to a supply chain. Using training or structures learned from the impact of previous results, the system can determine measures that are then either automatically implemented or passed on to a control group as a suggestion.

This means that the logistics platform needs to be understood as a centralized solution, operating the process chain with the highest efficiency on one hand and preventing possible interface problems on the other.

How is SSI SCHAEFER optimizing the logistics processes of the future?

SSI SCHAEFER's goal is to gradually expand the WAMAS® software suite with components that allow full control over the supply chain. This will allow us to ensure that, in future, our customers will have access to a holistic software system that provides comprehensive control over the supply chain through modern and sustainable network structures. Our logistics platform is our way of ensuring the future integration of all our fulfillment partners and to provide our customers with an efficient and effective overall system.

To achieve this, our experts are armed with comprehensive logistical and process-oriented know-how from countless customer installations and stand ready to advise every customer.

About the authors

Peter Totz works as Director Business Consultancy at SSI SCHAEFER.
His career began as a project engineer, data analyst and simulation specialist in Graz. With intermediate steps in production planning and as a logistics consultant, he worked as a senior consultant and project manager for many years. Later, he was responsible for business development in Latin America before taking over the lead of the globally active Business Consultancy Group.

Guenter Wachter is an experienced IT product and project manager. For over 18 years he has been defining product solutions for the areas intralogistics and transport and freight cost management, which he also implemented in projects with strategic customers.  
Within SSI SCHAEFER IT Solutions GmbH, Guenter Wachter is in charge of new solutions in the areas extended WMS and supply chain solutions and drives the development of new solutions towards supply chain execution and analytics considerably.