The year 2020. OMG.
Seems like everything could go wrong, did. All you read about these days is supply chain disruptions. The need to build resilience. I’m guilty; I’ve blogged a lot about it, too. And here I go again…
Today is different, though. Let’s talk about how Blue Ridge’s supply chain software actually mitigates these disruptions and creates a positive impact on the bottom line.
Here are 5 supply chain disruptions that our supply chain planning platform solves:
#1: Unforeseen Weather Events & Seasonality
Only 16 named storms were initially predicted back in April for the typical June-November hurricane season, but we’ve already seen the 23rd named storm of 2020… the highest concentration of storms to date. Right on par for 2020, right?
When weather conditions are unfavorable or otherwise unpredictable, things in the demand planning department get very shaky to say the least:
- You have to think extra-hard about things such as spoilage on fresh products like fruits and vegetables.
- Prices go up. So does competition.
- People hoard items, while demand for other items comes to a complete stand-still.
Or it could be simply planning for demand in an industry that is, by nature, very seasonal such as HVACR and Plumbing. Either way, creating a demand forecast in today’s erratic world requires seasonal intelligence and computational power far beyond that of human capability.
Blue Ridge supply chain software uses machine learning-based analytics and automated recommendations to stabilize demand and brings resilience during seasonal fluctuations or unpredictable events.
#2: Tariffs and Inflation
Political tension was already an issue with the import tariffs announced over the last 2 years. Now as the U.S. election looms near, fears over tariffs and other econ-political disruptions continue to approach the boiling point.
One solution that has worked very well for Blue Ridge customers is the ability to analyze and take advantage of forward buying opportunities to offset tariffs and inflation. In times where suppliers pass the costs of tariffs and inflation down to you, a forward buy (aka, investment buy) can be super-lucrative.
For example, let’s say that a supplier’s price is about to go up. The system tells you how much you could save by buying more – and at what multiples/frequency will land optimal results. Read more here: “Tariffs and Inflation: A Good Time To Forward Buy Inventory?”
#3: Labor Problems
Right on the tail of labor/trucker shortages we saw in 2019, recent labor problems such as the labor disruptions in Canada, will have a material impact on North American supply chains. Mainly, higher costs.
As an example, a month-long strike by dockworkers paralyzed the operations at Port of Montreal in August and September. The strike was finished more than 4 weeks ago, but major ports both on the west and east coast of Canada continue to experience disruptions ranging from port congestion to rail car shortages.
“Ocean and rail-dependent supply chain operations across Canada are unlikely to fully normalize before November,” said Neža Kričaj, Supply Chain Risk Analyst, Resilience360 in an article by Logistics Management.
Blue Ridge runs proactive, deep-dive analyses to show you the cost trade-offs of what, when and how you purchase inventory from your suppliers so as to minimize costs. The system builds the most economically optimized order based on many important factors, such as lead times and supply interruptions, receiving costs, on-hand inventory, cost of missed service levels, etc.
The platform can also quickly analyze your prices against relevant factors – like higher labor and transportation costs – and revenue opportunities to ensure that your prices align with your financial goals.
#4: Supply Shortages
Supply chains are not out of the woods from long lead times caused by the pandemic or other pressures on the availability of goods. In fact, a new resurgence of the coronavirus outbreak in countries like the Netherlands is causing supermarkets and other businesses to hit the reset button on rationalizing their assortments.
A popular approach for these companies is to offer fewer, different products in an effort to recoup profit loss from supply “surprises”. Is fewer products on retail store shelves the answer right now? Some arguments point to ‘yes’. But some not…
You may not necessarily have to get rid of products to improve profitability, customer service and efficiency.The answer may be simply ‘better science’ in your purchasing and pricing decisions.
Blue Ridge SCP and Pricing Solutions use intelligent analytics and forecasting automation to analyze tens of thousands of SKUs and deliver the most profitable inventory and pricing scenario for every single product. Read more here
#5: Ecommerce Pressure
We all know about the gargantuan jump in ecommerce during the pandemic, for reasons that are obvious. The competitive pressures on wholesale distributors continue from it:
- Inefficient and costly movement of goods to fill sudden shifts in demand
- High customer expectations for next-day delivery
- Price transparency exposing overpriced items, leading to lost sales & brand damage
- Price inconsistencies & underpriced items that impede margins
Blue Ridge gets the left hand talking to the right.
The Blue Ridge platform takes a holistic, cloud-based approach to supply and demand planning, aligned with Sales & Operations Planning processes, with the ability to add an integrated pricing suite. Together these solutions orchestrate better decision making, allowing you to easily make the leap to omnichannel selling with big results across the board.
READ NEXT: How’s Your Supply Chain Resilience Planning Going?
