Tag: supply chain

From darkness to light – unlocking the potential of technology-enabled supply chains

As businesses grapple with volatile demand and rising customer expectations, emerging technologies are helping operators see – and shape – their logistics networks like never before, according to experts

For centuries, supply chains have mainly operated in the dark. Even in our hyper-connected era, supply chain visibility and sustainability remain critical challenges, with the latest Proxima Supply Chain Barometer revealing that 86% of chief executives see significant hurdles with supply chain resiliency. 

This is driving a growing sense of urgency, with 55% of CEOs planning to dedicate more time to supply chain topics than in the last year. Meanwhile, 99% of respondents identify barriers to supply chain carbonisation, according to the Proxima research published in September and based on a survey of 3,000 CEOs across the UK, US, DACH, and Benelux-based companies. 

However, a convergence of artificial intelligence, Internet of Things (IoT) sensors, and innovative delivery models is shining light on these blind spots, promising a future where goods flow with next-level efficiency and sustainability.

“We’ve been running supply chains largely in the dark,” says Steve Statler, chief marketing officer at Wiliot, an ambient IoT company. “The opportunity now is to see everything everywhere all at once – like getting the cheat code in a computer game where suddenly the entire battlefield map is illuminated.”

This newfound visibility is already transforming operations. Royal Mail is deploying Wiliot’s Bluetooth readers across 6,500 vehicles to track 850,000 rolling cages that transport parcels nationwide using 2.5 million of Wiliot’s battery-free Bluetooth tags. The system helps right-size trucks, orchestrate labour, and prevent asset losses. More significantly, it lays the groundwork for real-time parcel tracking with temperature and carbon monitoring – enabling ambient delivery services for temperature-sensitive items like medicine and food without requiring refrigerated transport.

Last-mile upgrade – drones and driverless cars

 The pressure to innovate comes as consumer expectations reach new heights. Mia Yamaguchi, retail development lead at Uber Direct, says her company’s recent study shows 96% of Gen Z consumers now expect retailers to offer on-demand delivery. Yet only 22% of UK merchants, across various industries, currently provide such services, revealing a stark gap between capability and demand that represents a significant opportunity for forward-thinking businesses.

Uber Direct is addressing this gap by extending its food delivery network to all retail categories, from pharmaceuticals to DIY supplies. The model leverages existing Uber Eats couriers, demonstrating how innovation often means creatively repurposing assets rather than building from scratch. “We’re effectively a logistics innovator with a strong Uber backing,” says Yamaguchi, “utilising our existing fleet rather than investing heavily in new infrastructure.”

This approach has proved particularly valuable for construction companies and time-sensitive deliveries. When builders run short of supplies, sending workers to fetch materials can result in hours of lost productivity. Uber Direct’s solution enables rapid replenishment without disrupting work schedules, illustrating how modern logistics can directly impact broader economic efficiency.

Innovation in last-mile delivery is accelerating globally. In China, companies like JD.com are already using drones to service remote areas, particularly mountainous regions where traditional delivery proves challenging. Meanwhile, Uber is piloting autonomous vehicles in California. These developments hint at a future where the final stretch of delivery could be entirely automated.

Rise of the robots – working alongside humans

DHL Supply Chain is taking automation several steps further. The logistics giant will be the first company in the UK to deploy Boston Dynamics’ Stretch robots, using computer vision to unload trailers. Machine learning algorithms improve inventory accuracy while reducing labour needs, while generative AI streamlines back-office processes from legal work to solution design.

“Innovation and change should be embraced as something positive,” explains Saul Resnick, chief executive officer of DHL Supply Chain in the United Kingdom and Ireland. “These technologies ultimately improve job satisfaction, work quality, and safety for our people.” Rather than replacing workers, DHL’s automation strategy focuses on eliminating repetitive, physically demanding tasks while creating opportunities for employees to develop new skills.

Perhaps the most transformative development is the rise of ambient IoT – networks of battery-free sensors powered by surrounding radio waves. Wiliot’s postage stamp-sized computers can be attached to virtually anything, creating what Statler calls “an app store for the physical world”.

This capability enables use cases from monitoring vaccine temperatures to ensuring proper stock rotation in retail. “When you can see everything continuously, you discover issues people didn’t want to see before,” says Statler. “Products left at wrong temperatures, incorrect loading, poor stock rotation – all these inefficiencies become visible and addressable.” The technology has profound implications for food waste reduction and medical supply chain safety.

Navigating supply chain disruptions

Geopolitical disruptions and supply chain resilience remain critical concerns for business leaders. Resnick states that working with partners like Everstream Analytics provides access to predictive insights and risk analytics which help to calculate how events – from blocked shipping lanes to natural disasters – might impact supply chains weeks in advance.

“Having those tools available allows us to be more dynamic,” Resnick explains. “We can tell you that a ship won’t arrive because it’s stuck in the Red Sea and needs to go around Africa. You may need air freight – yes, there’s a cost, but on a case-by-case basis, this can be less than the delay.”

These predictive capabilities, powered by AI and enhanced visibility, enable businesses to make proactive decisions about inventory levels, alternative routes, and transport modes. This agility is crucial as supply chains face continued volatility and disruption.

Despite the promise, implementing these technologies isn’t straightforward. Innovation cycles often outlast executive tenures, making long-term transformation difficult. Integration with legacy systems poses technical challenges, while workforce concerns about automation require careful change management. The shift to more resilient, diversified supply chains following COVID-19 and geopolitical disruptions also demands investment, stresses Resnick.

Using the power of partnerships 

 For companies beginning their digital transformation journey, success requires a clear focus on business problems rather than technology solutions. Resnick emphasises the importance of viewing technology as an enabler rather than an end in itself. Statler notes that building ecosystems of trusted partners is crucial. “The notion that you can succeed by building everything yourself is shortsighted.”

Yield management emerges as a critical concept across all three experts’ insights. Whether it’s Uber maximising courier utilisation during off-peak hours, DHL optimising warehouse operations through automation, or Royal Mail enhancing its legacy infrastructure with modern tracking capabilities, the key is leveraging existing assets more efficiently before investing in new ones.

In the next 12 months, the convergence of AI, IoT, and innovative delivery models will create unprecedented opportunities for supply chain optimisation. Early adopters are already seeing significant benefits: Royal Mail’s rolling cage tracking system has reduced asset losses and improved fleet efficiency, while Uber Direct’s expansion into new retail categories is helping merchants meet evolving consumer expectations.

Tomorrow’s supply chains will be visible, predictive, and responsive in previously unimaginable ways. For business leaders, the imperative is clear: embrace technological change or risk being left in the dark. “Innovation is business critical,” Resnick concludes. “You can’t stand still in this regard. The alternative to moving forward doesn’t exist.”

This article was first published by Raconteur, in December 2024, following an in-person roundtable event that I moderated

Five ways to better manage supply chain disruption

The fallout from the pandemic exposed deep-rooted issues and a worrying lack of visibility, but these practical insights will help in case of future crises 

1. Don’t focus on cost alone

The countless stock delays and shortages over the past 18 months caused by a lack of preparedness and agility for the coronavirus-induced disruption have, for the first time in decades, called into question the running of lean supply chains designed to boost efficiencies and profits. They have laid bare a fragile and complex system that “has ultimately morphed into an investment plan focused on quick fixes and last-minute saves”, according to Patrick Van Hull, industry thought leader at Kinaxis, a global supply chain management company. 

Malcolm Harrison, group chief executive of the Chartered Institute of Procurement and Supply, agrees that many had seemingly dialled-up risk in the hunt for greater financial rewards. “Ensuring resilience and achieving value have always been the overarching objectives for procurement and supply professionals,” he says. “Focusing on cost alone is a risky strategy for any organisation. We’ve had decades of strong, lean and sometimes single-sourced supply chains working so efficiently that we hardly noticed them.”

The pandemic, he says, has encouraged supply chain managers to renew their focus on multi-supply strategies, local sourcing and best value in the supply chain, including working with competitors.

2. Invest in technology

Dirk Holbach, chief supply chain officer of laundry and home care at Henkel, says it was a tremendous advantage that his organisation was already far along its digital transformation journey before the pandemic. “The real-time visibility along our supply chain, which is a result of deploying Industry 4.0 technologies, allowed us to focus on the right challenges and to make the best decisions,” he says.

Van Hull points out that companies invested in digital transformation pre-pandemic were financially outperforming industry averages and surged further ahead of rivals over the past 18 months. “These types of results present a significant opportunity for supply chains, which historically have struggled with translating operational capabilities and digital transformation into financial success,” he says. 

3. Develop supplier relationships

While investment in technology is vital to increase supply chain resilience, old-fashioned human-to-human talking to solve problems is just as important when disruption inevitably strikes. Developing and nurturing supplier relationships accumulates mutual trust that can be cashed in when required, whether that buys favourable prices, shorter lead times or extra stock.

And, as the idiom suggests, a problem shared is a problem halved. “Embrace collaborative supply chain risk management,” urges Dr Alireza Shokri, associate professor in operations and supply chain management at Northumbria University. “Invest time in a collaborative culture, build trust and use these relationships to strengthen prevention and mitigation strategies.”

Shelley Harris, commercial director of IPP, which pools and provides pallets and boxes across Europe, agrees. “Our partner relationships are key, helping us to face new challenges as well as to work as efficiently and productively as possible,” she says.

The strength of its supplier relationships has allowed IPP to continue to fulfil its customer deliveries, despite the challenges the wider industry is facing, notably driver shortages. “We’re stronger because of long-standing relationships – we’ve seen a minimal impact on our operation and resulting service to our customers,” she says.

4. Improve transparency

The number-one way to manage disruption, according to Harrison, is a deep understanding of your supply chain and a focus on transparency. While this requires the right technology, as businesses have had to operate more efficiently in the digital space with more automation, it starts with understanding the different tiers of the supply chain. 

“Transparency across all tiers of the supply chain is a challenge,” he acknowledges, “but that visibility contributes to value in that it [helps to] remove fraud and corrupt practices and [helps businesses] look for signs of modern slavery among their suppliers.” 

Harrison stresses it is important to understand the robustness of different suppliers – and their suppliers. Transparency allows a business to identify potential problems, for example if a component is sourced from a single country or location and to track shipments.

This chimes with Van Hull’s thoughts. “Increased transparency is highly desirable for supply chains to sense disruptions as they are happening and respond immediately,” he says. “That is even more useful when it can be tied to financial outcomes, such as reduced inventory and cash buffers, improved capacity utilisation and lower cost resolution of demand-supply mismatches.”

5. Get the training right

Holbach believes training is imperative to maximise the potential of technology solutions. Empowering local teams and using their expert knowledge will strengthen the supply chain. They will flag potential issues early, giving the network a better idea of where to go for help with routing or stock if required. 

“We’ve had to react with agility during the pandemic and that was only possible by trusting our teams worldwide,” says Holbach. “It created the freedom to act fast, find the best solutions and keep our customers and consumers supplied with essential products.”

He believes a progressive approach to training starts from the top of an organisation. “As leaders, you should never stop learning,” he says. “To prepare for the unknown, you have to have the right mindset when confronted with new and difficult situations.”

Harrison echoes this insight, saying that supply chain professionals need to be equipped with the right skills and commercial judgement, which can only be achieved through training and development. This means being up to date, qualified, informed and skilled.

“What this pandemic has shown is that you need to invest in both technology and people to ensure supply chains are resilient, then we will manage better through the next global shock,” he says.

This article was first published in Raconteur’s Supply Chain Resilience report in September 2021

From lean to agile: Harrods’ supply chain director on how the pandemic sparked a revolution

Simon Finch says the coronavirus outbreak left retailers grappling for new supply chain models and now organisations must scale new heights to put people and the planet before profit

The iconic doors of Harrods’ Knightsbridge store closed for the first time in its 172-year history in March 2020, when prime minister Boris Johnson enforced an initial lockdown to stem the spread of coronavirus. But what did this mean for the supply chain of arguably the world’s leading luxury department store?

Incredibly, the London stalwart remained open throughout the Blitz and only shut for half a day following a 1983 terrorist attack. Consider the joy, for staff and customers alike, when the doors were unlocked on April 12. 

Speaking on the eve of the reopening, Harrods’ supply chain director Simon Finch reveals a “back-to-school feeling” and is optimistic that footfall will be impressive, despite the lack, for the moment, of wealthy tourists. “People are very keen to come back in and Harrods has the benefit of being 1.1 million square feet, so there’s plenty of space for social distancing,” he says.

From now on, the supply chain must be more about agility, to cope with volatility and uncertainty, and less about being lean

Finch began his career at Harrods 25 years ago as a graduate trainee. The amateur high-altitude mountaineer, who has scaled Himalayan peaks as well as the highest reaches of Africa and Europe, has climbed the corporate ranks and was appointed to his current role in October 2019, less than six months before the first lockdown.

While both his employer’s online operations and warehouse remained open for the duration of the pandemic, the 46-year-old concedes, with admirable honesty, that like so many other supply chain professionals, he was forced to grapple with unforeseen operational challenges and struggled initially. 

“We were probably all a bit too overconfident in the system, a bit like those in financial services when the economic crash happened in 2008, and when something unexpected hit, there was a lot of scrambling around to make things work,” he says.

Championing the technology-driven supply chain revolution

Like other UK retailers, Harrods has been buffeted by the coronavirus crisis and, more recently, Brexit fallout. It is the pandemic, though, that exposed operational weaknesses. 

“The pandemic has triggered a supply chain revolution,” says Finch. He argues, convincingly, that businesses were “obsessed with making supply chains as lean as possible” before COVID, moving items around quickly, with minimal stock and expense.

“Coronavirus completely screwed up that approach,” Finch continues, “as the organisations holding themselves up as having the leanest supply chains were the ones that had the most significant challenges as soon as there were global disruptions.

“From now on, the supply chain must be more about agility, to cope with volatility and uncertainty, and less about being lean. However, that agility has to be fully supported by technology and data insights. Whereas previously we have used technology to create a leaner supply chain, now the tech needs to provide the knowledge to make better decisions to drive agility and visibility.”

Data can’t get stuck in the Suez Canal, nor does it get held up at the borders with Europe

Given that Harrods was established in 1849 with the rather ambitious motto of omnia omnibus ubique (all things for all people, everywhere), the consumer behaviour trends accelerated by the pandemic forced the business to keep pace with change and embrace the digital age. Little surprise, then, that Harrods has recently employed more data scientists. 

“Understanding our customers, and how we can serve them better, and starting to use artificial intelligence, whether for our replenishment operations, to make sure we have the right amount of stock, or to manage outbound fulfilment volumes, is paramount,” says Finch. “Data can’t get stuck in the Suez Canal, nor does it get held up at the borders with Europe. And the sharing of data with our partners delivers a better operating model for the end-to-end supply chain.”

Data insights and deeper relationships driving sustainability

Technology alone, though, is not enough to drive the supply chain revolution, according to Finch. He contends that it is critical for those operating in the industry to “go retro” and forge or nurture deeper relationships with suppliers, service providers and brand partners. 

“Because the pandemic messed everything up, and we didn’t know what was happening, we picked up the phone and spoke to trusted partners and suppliers to all pull things together,” he says. “It was a return to the supply chain of the 1900s.”

Moreover, the combination of emboldened trusted relationships and data insights, plus greater diversity in terms of distribution nodes, inside and outside the UK, enables Harrods to develop a more sustainable supply chain. 

The sustainability agenda is critical to the luxury industry and we will lose sales if we don’t do this right

“As a father to two eco-conscious girls, I’m incredibly passionate about sustainability and building a brighter future,” says Finch. “I believe it’s the responsibility of all supply chain professionals and businesses to ensure we are doing the right thing for our customers. Therefore, putting the product closer to the consumer, through a decentralised supply chain and more localised distribution, is a win-win scenario. 

“Also, from a purely commercial perspective, this is the direction in which our customers want us to go; the sustainability agenda is critical to the luxury industry and we will lose sales if we don’t do this right.”

To illustrate his vision, Finch uses an example of how inefficient and harmful to the planet the supply chain and fulfilment processes can be from an ecommerce perspective. Goods might be manufactured and shipped from the United States to the UK only to be then sold online and shipped back to an American-based customer. 

“We are doing everything wrong if we create that unnecessary movement from a sustainability perspective, and also it increases costs and length of delivery time,” he says.

The COVID crisis may have sparked a supply chain revolution, but it is a work in progress for many retailers, including Harrods. Stressing the importance of diversity, data insights and developing trusted relationships for supply chains of the near future, Finch adds: “By having products that are local to customers, we can serve them more quickly, more cost effectively and more sustainably, while reducing risk, because the goods aren’t moving as far.” 

Through shifting its business model and with this smarter, tech-powered approach to the supply chain, Harrods will stand a good chance of keeping its doors, both physical and virtual, open for many years to come.

This article was originally published in Raconteur’s Procurement and Supply Chain Innovation report in April 2021