Solving the productivity of the supply chain for the next generation

Looking at the productivity of the supply chain for the next generation

News By Andrei Danescu published 9 October 2024

As businesses navigate an increasingly complex and competitive landscape, the role of supply chains has evolved drastically. Consumer expectations are always rising, and the modern supply chain has had to undergo significant adaptations in response, becoming more agile, responsive, and innovative. But if supply chains are to meet the ever growing demands of customers and market dynamics, then there’s one problem that needs solving, and that’s how to boost productivity.

For years, companies have been trying to make their supply chains more efficient and productive. For example, giants like Amazon have revolutionized their networks with advanced technology and rapid delivery services. But despite these efforts, overall supply chain productivity has seen limited progress. A recent Gartner report indicated that, whilst there has been a slight increase in productivity from 40% in 2019 to 41-44% today, it is not a big enough increase to boost overall supply chain value. This stagnation poses a risk of inefficiency, increased waste, and frequent disruptions and reinforces the fact supply chains need to become more efficient.

As the demand for faster, more reliable supply chains grows, companies which fail to improve productivity risk falling behind. A more productive supply chain is not just about cost-cutting; it’s about creating systems which are resilient and responsive to unforeseen challenges – whether that’s a global pandemic or a cargo ship blocking a vital trade route. Building more productive, adaptable, and agile supply chains for future generations isn’t just an opportunity; it’s a necessity, and that building process starts by focusing on a few key areas.

Andrei Danescu

CEO and co-founder of Dexory.

Enhancing employee engagement

Employees are the cornerstone of driving productivity in any business but investing in the workforce means so much more than just retaining staff – it means enhancing employee engagement and motivation to help boost their output.

When it comes to supply chain productivity, making sure employees have time for innovation and upskilling is crucial. It enables them to develop new skills, adapt to changing technologies, and contribute fresh ideas to streamline processes and improve overall efficiency. This investment in employee growth not only enhances individual performance, but also drives collective advancements in supply chain operations, leading to a more agile and resilient system.

One way to ensure employees have the time to focus on this growth and development is by investing in the right technologies to free up their time. Recent statistics highlight that nearly three-quarters of warehouse staff are more likely to accept a lower paying job at a company offering advanced technology to make their jobs easier and allowing them to advance other skills. These statistics highlight a shift in employee priorities, reflecting a trend towards valuing technological support, career advancement and improved working conditions. It emphasizes just how important it is to invest in employees if you want to create a more dynamic, skilled, and motivated supply chain team.

Balancing technology with effective governance

Whilst companies need to ensure they’re leveraging the benefits of advanced technology to improve supply chain productivity, they also need to maintain an effective oversight and risk management of the technology being implemented. In other words, supply chains need to strike a sense of balance between technology and governance. Though technology, like AI tools and robotics, promises significant productivity gains, it also introduces new challenges around data integrity, security, and ethical use.

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