Nick Fryer, Vice President of Marketing at Sheer Logistics, discusses key considerations for agile logistics
In 2020, Unilever’s CSSO declared that when a supply chain is stressed, agility “trumps” forecasting. Though that statement was made in the midst of the pandemic, a string of ongoing global supply chain and market disruptions has only reaffirmed its importance.
In this article, we’ll explore the key factors that impact successful agile logistics strategies and how they can help optimize distribution networks to be more responsive and resilient, no matter what’s happening in the news.
Enhancing distribution networks for optimal performance
Here are five of the most impactful agile logistics strategies businesses can integrate for enhanced distribution networks and optimized performance:
Data-driven decisions: The use of both real-time and predictive data analytics is foundational to any logistics optimization approach. Data can be used to track and speed up response times when it comes to transport disruptions, demand fluctuations, and inventory problems. Using data takes much of the guesswork out of decision-making, which in turn results in more accurate and efficient solutions.
Decentralized distribution: One of the ways data can be used is to strategize a decentralized distribution approach that uses multiple warehouses and fulfillment centers to cut down on delivery times and speed up product distribution. A decentralized approach keeps systems nimble and ensures that if there’s an issue at one, there’s always an option B to turn to.
Dynamic transportation network: Transportation networks that are multimodal and use AI-powered routing technology are a foundational part of any agile logistics approach. It’s what allows distribution networks to be more flexible and have alternatives at the ready if there are, for example, road blockages or a driver strike.
Dynamic transportation networks also allow businesses to take advantage of the fastest mode of transport for a given route rather than being stuck with an overly rigid approach that leaves customers waiting.
Automation: When we think of “optimal performance,” efficiency is one of the first words that come to mind and little exemplifies that more than the use of automation technology. Automated warehouse sorting systems, logistics scheduling, and loading plans can all be used to enhance the speed and agility of distribution networks.
Inventory visibility: Another aspect of optimizing the performance of distribution networks is better inventory visibility and management through the use of smart technology. As we’ll explore in a later section, there are plenty of tools that have emerged that make it easier for businesses to see exactly where their inventory is at all times so that they can make better decisions in the face of market shifts.
Adapting to customer demands with agile logistics strategies
Global retail giants like Nike and Zara are both famed for their highly agile logistics strategies. Nike uses a mix of data analytics and logistics optimization to cut down on how long it takes for sneakers to get from the factory to the delivery vehicle, and in doing so, has reduced customer waiting time and been able to keep up with demand better than some competitors.
“Extreme agility” has also put Zara ahead. They’ve decentralized their manufacturing over the last two decades and become more data-driven in their decisions to make sure that they’re always the first to get trending items to customers.
So much of business these days is being able to give a customer what they need before someone else does. The more flexible a business’ logistics approach is, the better positioned they are to respond to customer demands quickly and enhance satisfaction in the process.
Implementing advanced technologies for smarter supply chains
One of the defining factors of an agile logistics strategy is the use of information technology. Here are some of the advanced technologies being used to build smarter supply chains and enhance distribution networks:
Transportation management systems (TMS): TMS are software platforms designed to facilitate the planning, execution, and optimization of the movement of goods. TMS provide enhanced visibility to shipments and supply chain data, empowering logistics managers with real-time business intelligence.
Integration software and platforms: Integrating your TMS with your ERP, warehouse management system (WMS), inventory management system (IMS), real-time transportation visibility platform (RTTVP), and other business operations such as accounting, inventory management, and customer service can help you create a best-in-class logistics tech ecosystem to support your business with enhanced visibility, streamlined operations, reduced manual errors, and improved sharing of information with stakeholders and carriers along the supply chain.
GPS tracking: Accurate GPS tracking devices on transport vehicles and cargo can help map out entire distribution networks and build more agile strategies. The data from GPS tracking can be used to build predictive transportation scheduling models and allow for route optimization and greater responsiveness when there are supply chain disruptions or demand changes.
AI and machine learning: These tools are generally used in conjunction with data from GPS tracking to make risk assessments and offer response plans. AI-powered algorithms, for example, can help businesses with carrier optimization by showing the most strategic options for carrier selection based on capacity, coverage, and pricing, etc.
IoT sensors: These can be used on inventory as well as machinery to send out automated alerts on breakdowns and environmental changes that might affect the quality of goods and improve everything from routing to inventory management.
Addressing and overcoming distribution network challenges
The value of agile logistics strategies lies in their ability to address common distribution network challenges, such as:
Supply chain disruptions: Decentralized distribution, more dynamic transportation networks, and routing optimization technology all ensure that distribution networks can respond to disruptions quicker than ever with alternative options.
Poor inventory management: Having too much, too little, or just not knowing where inventory is frequently appears as a common distribution problem. Technology like IoT completely changes that by making inventory more visible so that businesses can make more informed decisions if customer demand suddenly goes in a new direction.
Fluctuating customer demand: Data that tracks customer demand and market shifts not only helps businesses predict the direction of the wind but empowers them to learn from past experiences so that the distribution network is well-prepped to respond to changes.
Tight budgets: What often constrains distribution networks in times of crisis is money. Things get too expensive, and everything grinds to a halt. Implementing agile logistics strategies that optimize routes to save fuel and automate basic tasks that save on labor all help reduce this pressure.
With every one of these challenges, smart data and technology usage are the key factors that make agile logistics strategies so successful in improving distribution networks.
The future of agile logistics and distribution networks
Agile logistics strategies are essential for staying competitive in today’s fast-paced market. By leveraging data-driven decisions, decentralizing distribution, optimizing transport networks, automating processes, and improving inventory visibility, companies can strengthen the flexibility and resilience of their distribution networks.
Agility allows businesses to quickly respond to disruptions, meet evolving customer demands, and optimize overall performance. With technologies like GPS tracking, AI, machine learning, and IoT sensors, companies can create smarter, more efficient supply chains that stay ahead of challenges and drive success.
For a list of the sources used in this article, please contact the editor.
Nick Fryer is Vice President of Marketing at Sheer Logistics. He has over a decade of experience in the logistics industry, spanning marketing, public relations, sales enablement, M&A and more at 3PLs and 4PLs including AFN Logistics, GlobalTranz, and Sheer Logistics.