Miscellaneous

Why Digitizing the First Mile Is the Next Evolution for a Connected Supply Chain

Opinions expressed by Entrepreneur contributors are their own.

Since I began my career in manufacturing and distribution, almost two decades ago, a lot has changed. Just in the last two years, unprecedented events have highlighted how critical supply chain teams are to our everyday lives. 

We have weathered pandemics, mandated shutdowns and shortages of everyday goods like food, disinfectants and even toilet paper. Before these events, many consumers hadn’t focused much on where these goods were made, the role of supply-chain planning, or how raw materials can affect finished goods. But two years later, most of us have experienced the strain on the global supply chain, and it has revealed the fragility of the overall supply ecosystem. 

The right combination of technology, strategy and well-trained teams, could have made an impact even with unprecedented spikes in demand. But a major roadblock for importers is the lack of investment in digital supply chain solutions. 

Sarah Barnes-Humphrey, the founder of Let’s Talk Supply Chain, told me, “The companies that will succeed and come out of the disruption stronger are the ones that are seeing their supply chains as a competitive advantage. Looking at ways to use AI/machine learning, robotics, data and more to empower their supply chain process and teams will pay off handsomely in the long run.”

For importers, the incentives for investment are clear: more sales, lower costs, higher-profits, better worker and customer satisfaction. And with the most recent OEC report estimates showing U.S. companies imported more than $2.38 trillion in goods, it’s a huge opportunity. 

To better understand the challenges importers face across their supply chains and how digital solutions can help, let’s frame the supply-chain journey in two parts: the first mile and the last mile. 

Related: 5 Keys to Effective Problem-Solving When You’re Facing a Complex Operational Challenge

The last mile 

As consumers, we are familiar with the last mile of the supply chain. For example, if you want to buy a blender, the process is simple: You decide on make and model, place an order online and if it’s in stock, it ships to your door within a few days. 

Since the blender is already built, in inventory and the order is digitally connected, you know where it’s shipping from and when it will arrive. You can even get text notifications each step of the way. The digitization of the last mile means you have visibility and any changes will update in real-time. 

The first mile 

Unfortunately, the first mile looks a lot like it did 20 years ago, with printed orders, emails, disparate operations systems, phone calls and spreadsheets. This manual coordination means more risk. 

If the blender you wanted was not in stock and needed to be built, the supplier would need to order raw materials, contract with factories, build the blender and ship it to the warehouse. This process involves a lot of coordination, people and resources. The build could span many months depending on the product type, material availability, cost and complexity. 

While solutions to many of the biggest “first mile” supply chain problems already exist, factors like cost, time and lack of understanding have contributed to executives delaying decisions or choosing to do nothing. Below are a few examples of common first-mile challenges that importers face when operating a manual Import Supply Chain:

  1. Disconnected departments, people, and trading partners. Without a common set of systems across the supply journey, coordination becomes challenging both internally and externally 

  2. Lack of full visibility to product life cycle. Because many importers aren’t using digital invoices and don’t have real-time systems connected to their suppliers, they lack the ability to make rapid decisions when disruptions occur

  3. Low-resolution analytics. Without advanced analytics, basic supply needs become more challenging and teams often skip key optimization opportunities.

  4. Systems of record not current. The average purchase order changes between five to seven times over the supply journey. Without full digitization of purchase orders, enterprise resource planning and other systems will not have accurate information as new changes occur. 

  5. Higher costs, lower sales. Stale information limits an operator’s ability to take action and course-correct as challenges arise, resulting in poor customer experiences (CX) and lost or canceled sales. 

Related: 5 Reasons to Get Excited About Smart Manufacturing

The time for action is now. If you are a leader with first mile exposure, don’t be left behind. Encourage your teams to evaluate the opportunity, establish clear ROI calculations, and make the case to transform your business now. 

To truly change the way you operate in a post-pandemic world requires strategic planning, technology and a team that is motivated, aligned and empowered. By ensuring that your entire supply chain is digitized, your team will derive greater efficiency, increased job satisfaction, improved retention of people and knowledge, which will lead to happier partners and happier customers. 

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