Many hoped by this point in time we’d laugh about the infamous toilet paper shortage in early 2020. However, Australia’s still experiencing the ramifications of supply chain disruptions. Although we’re seeing stock levels return to normal, the rising price tag attached to basic goods such as groceries and fuel is evidence of ongoing challenges within the supply chain.
Deloitte recently released their first-of-its-kind Australian Supply Chain Leaders’ Sentiment Report for 2021, which shares insights into the challenges and disruptions businesses have faced during the turmoil of the past two years, and suggests how to best move forward.
Among the report’s core five recommendations is the transition to new technologies and the digitisation of workflows. The report also noted the processes with the highest uptake are predictive analytics, warehouse automation, and artificial intelligence.
The Chief Executive of the Australian Retail Association predicts even with eased restrictions and the drop in COVID-19 case numbers, we’re likely to see this trend of supply chain disruptions continue into 2022 and potentially even for the next 18 months.
How have businesses adjusted to global catastrophes?
As many businesses reflect and learn from the complications of the past two years, which included the global pandemic and extreme weather events, many have begun to recognise disruption to supply chains on an international and local scale are not a one-off event, but a consistent threat that needs forward-thinking planning and strategy to overcome.
The world will continue to battle new variants and will surely be presented with interference from geo-political factors. Where businesses are facing unpredictable and fluctuating external obstructions to the supply chain, implementing reliable tech to aid in the daily workflows, data organisation, and internal systems of a company can provide a form of stability.
Retailers tend to focus on the physical and logistical aspects of the supply chain.
But for those looking to become masters of supply-and-demand and ride out ongoing turbulence, they can’t afford to overlook internal blind spots including inefficient accounts payable processes resulting in compounding supply chain interruptions, straining vendor relationships, jeopardising operations, and ultimately affecting revenue.
So, how can retailers take back control and transform their financial processes? The answer lies in automation technology, which gives them access to real-time, accurate supply chain information that strengthens vendor relationships and ensures payments are made on time.
How do we identify what’s blocking the vision?
There are two critical pieces to keeping the goods coming so you can meet demand: strong vendor relationships and real-time insight into cashflow for decision-making.
When retailers rely on paper-based workflows, inefficiencies that negatively impact the supply chain abound. Manual invoice processing is time-consuming and causes delayed payments.
When retailers don’t pay vendors on time, not only can they suffer late payment penalties, but they also strain relationships. If a supplier has a limited quantity of a material, they more likely to do business with a company that pays on time than one that makes late payments.
Retailers’ decisions are only as good as the information upon which they’re based. Lengthy processing times – like logging into supplier portals to gather information – impede visibility into cash flow, making it difficult to know when to order more or less of a certain material.
Then you have the joys of manual data entry – every retailer’s favourite task, right? Keying data from one application to another, whether ordering goods from multiple suppliers or manually updating your enterprise resource planning (ERP) platform, is time-consuming.
Having the ability to free up employee’s time from menial manual data entry provides the opportunity to apply a stronger focus on customer experience and business growth.
Finally, a strong vendor relationship starts with a positive experience from day dot. If retailers are manually onboarding new suppliers, they’re slowing things down before they even start. Once suppliers presume a retail firm as slow, it’s hard to change perceptions down the track.
How do we take control to gain visibility?
Fortunately, retailers can act by giving their finance departments and personnel visibility into internal supply chain blind spots. This is where digital transformation comes in.
Digitally transforming these processes includes embracing electronic invoicing to facilitate payments, automating accounts payable approval workflows so staff can focus on supply chain issues, and using automation software for insight on the business expenditure.
On top of this, an accounts payable automation solution that integrates with a retailer’s existing enterprise resource planning (ERP) system can put an end to the manual re-keying of data to reduce errors and keep vendor relationships running smoothly.
By digitally transforming internal workflows, retailers work more efficiently with procurement and provide more detailed and reliable data for order placement. Lean production and improved efficiencies have helped many businesses reduce working capital, but the threat of “land grabs” for materials makes it imperative for retailers to find the right balance.
Procurement can rely on the improved visibility into cashflow to adjust orders and prevent the business from becoming a victim of fluctuations caused by supply-and-demand issues.
What is the role of digital processes?
It’s no longer a matter of will digital tech be implemented in supply chains, but when. Companies should capitalise on the available software and platforms that can transform workflows to better address the current demand of consumers. The implementation of document intelligence can aid in translating unstructured data and unlocking clear insights.
The prevalent global pandemic and geo-politics of the past two years has taught us disruption is inevitable, unpredictable and ongoing. While retailers can’t control every aspect of their supply chain, they can build a better front to navigate the choppy waters.
By turning to technology, retailers can strengthen vendor relationships, gain better visibility, and make better decisions to be ready for the uncertainties of today – and tomorrow.