The good news is technology does allow us to minimise disruptions as the world becomes more connected, and one of the simplest examples lies in the inexorable growth of e-commerce.
Although e-commerce does represent a threat to traditional local retailers, it also presents them with an opportunity to reach a global market. Furthermore, it has been a benefit to other sectors outside retail.
One organisation reaping the benefits is Australia Post, as the changing nature of retail supply chains plays to the organisation’s traditional strength as the nation’s most-trusted delivery service.
According to Australia Post’s group chief operating officer, Bob Black, the 2019 financial year saw a 20.8 per cent growth in online goods spend nationally, taking the proportion of goods spend online to approximately 10.5 per cent of the overall retail market*.
Black emphasises the importance of overcoming the numerous friction points in supply chains as parcels move from their origin and into customers’ hands.
“Not only are there myriad handoff points – trucks, planes, customs, warehouses – we also need to provide customers a level of visibility,” he says.
In a bid to improve visibility and remove friction, over the last three years Australia Post has invested $900 million modernising their domestic network and adding automation as well as new sites to accommodate increased volume.
A major component of this investment has been a focus on big data. Black says this assists in providing relatability, visibility and flexibility which makes or breaks the customer experience in an increasingly digitised world.
“Customers no longer simply want to know where their parcel is, they want the freedom to make decisions about when, how and where it’s delivered, while it’s in transit. Improving the visibility and the choices we offer our customer is something we’re always exploring and innovating with as new technology becomes available,” Black says.
He says the efficiency of any company’s supply chain dictates the customer experience.
“It’s as simple as that. If the supply chain is operating efficiently, then the customer experience will follow.”
Yet big data analytics goes well beyond tracking goods in the supply chain. CBA’s Potgieter says it plays a vital role in helping businesses plan and respond to the myriad opportunities and challenges we see today.
“Our in-house data analytics team can provide bespoke insights to support supply chain clients in strategic decision-making, from validating brand identity to identifying opportunities for investment and/or expansion,” he says.
Big data is a major component in optimising supply chains and the customer experience.
Getty.
Beyond data, technology is also affecting logistics in other ways, such as warehousing and automation.
For example, a logistics facility for a real estate player is primarily a landbank with a shed on top of it but nowadays it can be so much more. Potgieter says with companies increasingly automating their warehousing facilities, the value of the facility multiplies. It’s a land and technology play.
By understanding this dynamic, an organisation such as the Commonwealth Bank can partner with the real estate client as well as the logistics company to provide an integrated and innovative solution that meets the strategic needs of both clients. It is this which lies at the heart of the ecosystem approach, Potgieter says, and allows the bank to bring a deep understanding of the end-to-end supply chain for its clients.
“For example, take a daily consumer product such as a soft drink,” he says. “We have been involved right across the value chain from raw material inputs, manufacturing to packaging, storage, transport and point of sale. We can provide value attribution right across their value chain, by looking for opportunities to reduce risks or enhance cash flow or capital efficiencies.”
As for further big disruptions now and for the future, Australia Post’s Bob Black adds the growing demand for transparency, and environmental and social responsibility.
“This is something that all companies, in all industries need to be acting upon if they want to meet customer expectations and stay competitive,” Black says.
Potgieter agrees Environmental, Social and Governance (ESG) principles are playing a larger role in efficient supply chain management today, especially around visibility and traceability as well as the provenance of particular goods.
“Technologies such as artificial intelligence are playing their part as they can analyse the vast amount of data as it travels along the supply chain,” he says. “Furthermore, collecting data which tracks the provenance of particular goods helps reduce fraud and offers advantages to Australian companies internationally.”
And more frictionless data-driven and interconnected supply chains can only benefit the Australian economy in the long-term.
*Retail market is total retail spend reported by ABS excluding cafes, restaurants & takeaway food.
