Why search is at the heart of the modern supply chain
As supply chains become more intelligence-driven and begin to utilise insights to serve customers in new and innovative ways, traditional transaction-led models are no longer cutting it.
65% of shopping begins at the search, according to Gartner. Instead of focusing efforts on converting people at the buy, retailers should look to convert at the point of search. Abandoned shopping carts offer insights into lost sales. Often, the reasons are related to shipping and return policies. This offers an opportunity to directly impact revenue and sales by making more attractive offers that convert abandoned carts into sales.
Amazon has led the way toward two-day and same day shipping, a chase that retailers cannot win if they hope to protect their margins. The irony lies in the fact that fulfilment speed isn’t necessarily what each order requires to satisfy the end consumer. Both B2C and B2Bcustomers frequently make purchases they don’t need to have delivered in one day, and pulling levers between price, shipping time and mode of final delivery can take advantage of this fact to generate new value. Sometimes, it might be preferred to have goods delivered at a later date, or in a particular time window. If my wife’s birthday is a month away, I don’t need her gift delivered tomorrow. In fact, I would prefer to not have it come until a Friday afternoon when I’m working from home and she’s in the office, so that she’s not there when it arrives. If the retailer knows this and offers this among my purchase and delivery options, I am likely to select that later delivery – especially if there’s a price break.
Having access to customer information and POS data is essential in knowing what options might be attractive and determining which deal to serve up as the customer initiates its search. And on the back-end, there’s a complex hairball of specific details that need to be orchestrated to make this possible. To start with, the retailer needs to know the status of all inventory available to ship. With that data in-hand, it can begin to run analytics to predict the arrival of goods based on the customer, inventory, order details, carrier capacity, and other what-if scenario simulations. The retailer can begin to run inventory and route optimisation analysis and match it with consumer demand at the point of purchase or at consumer search, to offer specific options that appeal to the consumer while eliminating the costs and burdens associated with an artificial drive toward next day shipping. The strategy shifts from being all about speed to customer-centric precision – driven by supply chain data and insights.
Theoretically, this makes sense and can change the game for retailers and manufacturers. But execution is not an easy feat. Multiple prerequisites exist:
Real time & accurate visibility into inventory
Network connectivity into carriers, 3PLs, suppliers and trading partners
Live connectivity and collaboration
Each company in a supply chain tends to operate its own enterprise systems, making it a challenge to see and collaborate from one business to the next. Silos often exist not only from company to company, but from system to system. Multiple ERP, TMS, WMS systems, for example, create layers of hurdles and gaps that hinder the flow of data and visibility. Traditional thinking has been to plug these gaps with portals where suppliers and trading partners can exchange documents and collaborate. This approach has enabled commerce to “get-by” in many ways, making up for data latency and lack of true visibility by padding inventory and adding buffer stock in key locations to fulfil demand. But as supply chains aim to wring out buffer stock and become more efficient, we’ve hit a wall in terms of execution capabilities. The vision of optimising inventory and transportation routes to make customer-specific offers based on confident predictive intelligence simply cannot exist when relying on an enterprise-centric technology backbone. The hub and spoke ecosystem was built for yesterday’s environment. In today’s world supply chains must operate as a single cohesive network that lives, breaths and executes around the customer.
To successfully deliver on this vision, trading partners have to be connected on a single network where all parties are plugged into the same system, interacting and executing on the same information. There is no duplication or passing information from one system or party to another; there’s only one set of data that everyone sees. AI and machine learning offer a world of opportunities to enhance business and optimise performance. But the value is limited without access to quality data that can be acted upon. A network of clean and accurate data becomes a digital foundation for predictive and prescriptive analytics.
In this single-instance network model, visibility, connectivity and collaboration are delivered to everyone in the supply chain. So, when AI and machine learning are applied, data analytics such as predictive time of arrival can be applied to each node in the network. With this in hand, new opportunities arise to deliver customers multiple options for service based on reliable intelligence. When these analytics are reliable enough to allow retailers to build customer offers around them with confidence, the supply chain becomes a competitive advantage that creates new value streams. Through network connectivity, accurate data and cross-party visibility, a digital foundation is formed that serves as a catalyst to innovation that is built around and tailored to the end customer. This is the very essence of a customer-centric supply chain.
By Bryan Nella, Senior Director of Supply Chain Content & Thought Leadership, Infor Nexus
How Vertical Farming can make food security more sustainable
The world’s population is expected to hit 9 billion by 2050, but 9% of people are already living with food insecurity.
To feed the planet, humanity will need an alternative to traditional farming.
Vertical Farming: productive and sustainable
A bit like a greenhouse with bluetooth, a Vertical Farm is an airtight room, shipping container or building, which grows crops under electric lights. Rows of fruit and vegetables are stacked vertically instead of in one layer, as the artificial lights reach all of the crops. The level of light, water and the temperature is controlled by the farmers. Vertical Farms are especially useful in cities where fresh produce has to be hauled in from the countryside - covering miles before it reaches the consumers plate.
For Aerofarms, based in the USA, the Vertical Farm is 14,164 square meters. But as the crops are stacked, the actual farmland covers 139,931 square metres and provides two million pounds of leafy greens per year.
Bowery Farms, also in the USA:
- Uses 95% less water than outdoor farms.
- Per square foot of farmland, the company is 100 times more productive.
- Uses no pesticides or chemicals.
Vertical Farming is sustainable for many reasons:
- With rows of in-demand veg stacked on top of each other, less space is used to grow more food.
- The crops are grown in an isolated environment, where factors can be manipulated. Fruit and vegetables grown outdoors are impacted by the weather and their environment, but vertical farms can grow all year round, uninterrupted by external threats.
- Furthermore, in traditional farms, crops are eaten by insects and animals, forcing some damaged crops to be disposed of. In vertical farms, they are protected from this. Water and nutrients can also be measured out exactly, so nothing is wasted.
- Exotic fruit and vegetables can be grown anywhere, instead of being farmed in suitable climates and then transported to their customers.
Here’s what four international Vertical Farms are doing:
Aerofarm is based in New Jersey, USA, and was launched in 2004. Through careful measurements and filtration systems, it uses 95% less water than traditional farming to grow leafy greens, berries and tomatos. It has received $130m in investments since opening and from 2016 has offered employment to those formerly incarcerated. The company reached second place in the FoodTech 500 in 2020.
French vertical farm, AgriCool has units based in recycled shipping containers throughout Paris, where strawberries and coriander are grown “Less than 15 km away from where [the customer lives].” They are also powered by 100% renewable energy. AgriCool has been backed by investors Bpifrance and Danone Manifesto Ventures. “Agricool is disrupting agricultural practices thanks to innovative technology that provides local products, in line with consumers expectations,” said Laurent Marcel, Danone Manifesto Ventures. “Their business model, with the use of shipping containers converted into urban farms, and the choice of the crops they are using (growing strawberries) give them a unique position in the booming urban farming sector.”
Emirates Flight Catering (which provides meals for Emirates passengers and crew) signed up with CropOne in 2018, to build the biggest vertical farm in the world. “This investment to build and operate the world’s largest vertical farming facility aligns with the UAE’s drive for more agricultural self-sufficiency,” said His Highness Sheikh Ahmed bin Saeed Al Maktoum, Chairman and Chief Executive of Emirates Airline and Group.
33 metres below the streets of London, leafy green grow under lamps in disused wartime bunkers. The startup Growing Underground won the 2017 BBC Farming Today Future Food Award for its concept of fresh produce in a vacant space.
What’s next for Vertical Farming?
Although the planet cannot be sustained solely on lettuce and strawberries, Vertical Farms save space and produce more crops in less time, than those grown outdoors. Investment will allow the farms to explore other options of what they can grow. With the human population on the rise, the only way is up for Vertical Farming.