March 2024
Supply Chain News to Know

MARCH 2024

News To Know

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AI is getting a lot of hype these days, and rightfully so. But if you’re looking to transform your supply chain, don’t overlook the organization-wide commitment, resources and time required… Let’s dive in.

The Lead: Running Lean

According to research by Bank of America, retailers’ ordering behavior suggests they are content with their stock levels.

And Ravi Shanker at Morgan Stanley suggests that "Inventory levels may never return to prior decade levels as long as interest rates remain elevated with Shippers preferring to limit SKUs and running shorter, faster, tighter supply chains with higher turnover instead.”

With less inventory in the pipeline, retailers could be at greater risk of stock-outs and higher costs due to transportation disruptions.

In a recent piece for TotalRetail, Seth Frederickson, Vice President of Product Management at FourKites and former retail supply chain practitioner, shares how insight into network capacity, flexibility in routes, transportation modes, and inventory sitting in the yard or warehouse unlocks options to quickly align supply to demand as needs shift.

In View

Marina Mayer, editor-in-chief of Food Logistics and Supply & Demand Chain Executive, spoke with Himanshu Mehrotra, VP of Product Management at FourKites, to discuss how macro factors, such as cargo theft and weather disruptions, can add complexity to cold chain logistics, but the persistent challenge of inventory loss and spoilage poses the greatest threat.

Despite potential reductions in inventory and costs, along with improvements in speed, service levels and customer satisfaction, some supply chain leaders still aren’t effectively collaborating with partners or customers. In The Logistics Point, Stephen Dyke, Principal Solutions Consultant at FourKites, provides a practical guide to getting started.

The authors of a recent Harvard Business Review article argue that companies have failed to develop effective strategies for preparing their supply chains to withstand unforeseen disruptions due to three significant shortcomings in existing planning methods: 1) flawed, forecast-driven processes; 2) data-related challenges; and 3) ineffective scenario planning. However, by using machine learning and historical data, they believe companies can have superior recommendations for supply chain decision-making.

Numbers to Know

Average shipping volume per US retail client relative to total card spending on retail ex autos/gas in Bank of America internal data (Index 2019=100) and the Census Bureau inventory/sales ratio for retailers (ex motor vehicle and parts dealers, SA, %).

The retail inventory/sales ratio could be close to flattening out

Bank of America data show how orders are keeping up with demand in the retail sector and reveal a fairly flat story, suggesting that retailers are content with their stock levels.

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Words of Wisdom

In my time in the industry, dwell and detention fees have been the Achilles heel of supply chain budgets. In a recent discussion I had with a Fortune 25 shipper, they recognized that with better discipline, capacity utilization and the right tools, they could become a Shipper of Choice and command 2-4% lower transportation costs as a result. The issue? There’s no visibility to the blind handoffs throughout their network. Without it, it’s harder to coordinate across processes, especially when things inevitably change.

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ED SOSNOWSKI
SOLUTIONS CONSULTANT, FOURKITES

ICYMI

Walmart is easing its requirements for on-time and in-full shipments from its suppliers as the retailer returns to more normal ordering patterns after years of struggling with sharp fluctuations in stocking levels during the pandemic. Consumer packaged goods vendors delivered an average of 84% of orders on time in 2023, according to the latest FourKites data.
Built In takes readers behind the scenes to learn how FourKites’ generative AI solution, Fin AI, was brought to life, and shares how it's having a real impact as customers use it to navigate disruptions.
Barilla has achieved 80% visibility into the entire lifecycle of its ocean and road shipments, which helps their teams proactively manage issues and disruptions. “Before we started using FourKites’ platform, we could only react to an issue when it was too late,” says Davide Busato, Logistic Competence Center Innovation Project Manager at Barilla. “Now, we react before an issue escalates into a major problem, which saves time while reducing transportation costs and fines. This, in turn, improves our relationships with carriers and customers.”