Even as the pandemic recedes from view, it seems that each day fresh supply chain disruptions enter the picture. The only thing to expect is the unexpected, and that’s why Körber Supply Chain is focused on delivering technological agility and resilience that will see companies through turbulent times.
In late August Australia Post reported that the rapid growth in e-commerce experienced early in 2022 was expected to moderate moving forward. But while the uptake of e-commerce thrust upon us in wake of the pandemic may be expected to plateau, it doesn’t alter the fact that resilience and agility will only get more important as the sophistication, speed, complexity, and interconnectedness of supply chains increases.
There are always knowns and unknowns when it comes to supply chain disruption, and it’s important to be ready for both. While we can plan for seasonal fluctuations – like the forthcoming annual Christmas shopping boom – and the scaling up or down of distribution within standard parameters, there are always the unknowns to contend with, too: inflation spikes, natural disasters, global health crises, cyberattacks, and disruptions arising from geopolitical tensions – just to name a few.
All these contribute to one of the most complex business environments the world has ever seen.
Alongside this, there’s an increasing emphasis on sustainability considerations, both from an environmental point of view and to future-proof businesses against climate-related shocks.
Indeed, just this year Australia has been ravaged by floods, and bushfires will again threaten supply chain security as we look towards the summer. The Intergovernmental Panel on Climate Change (IPCC) has stated that extreme weather events will become more frequent in Australia in future, owing to climate change.
With so much instability and turbulence, long-term business growth is difficult to focus on and as a result, for the past three years many businesses have found themselves treading water instead of focusing their attention and efforts on sustainable future growth.
The businesses that will best cope are those that have strategies and technologies in place to deal with disruptions expected and unexpected.
BUILDING AGILITY AND RESILIENCE
Processes and people are key to running a warehouse or DC to its best potential. Technology should only enhance what is already there. Building both agility and resilience into a logistics operation means having the right tools in place to combine human capability with technology.
But how is this done?
One company that tackled this challenge – in partnership with Körber Supply Chain – is Super Retail Group. Super Retail Group, one of the largest retailers in Australia, is home to well-known household brands including Rebel, Macpac, BCF and Super Cheap Auto.
At its Annual General Meeting in October 2021, Super Retail Group reported 22 per cent year-on-year growth in sales across the Group, reaching a record $3.4b.
In online sales, the Group reported 43 per cent year-on-year growth and announced that online sales now represented 12 per cent of total sales. Click and collect sales also grew more than 50 per cent and the Group completed more than 1.5 million home-delivery orders.
Having gone through a significant period of expansion and acquisitions over the past 30 years, Super Retail Group is now focused on establishing a stable foundation to support further growth – with the agility and resilience needed to weather any future storms.
With three decades of growth and expansion, there is no doubt that Super Retail Group has the people and the culture in place – but by partnering with Körber Supply Chain it is in the process of adding the technological capabilities that complement its strong personnel.
“We’ve had a long history of expansion and now our strategy is very much focused on getting the Group to work well together by establishing some really good core processes,” Patrick Fountain, General Manager – Supply Chain Strategy at Super Retail Group says.
Prior to partnering with Körber Supply Chain, Super Retail Group was operating several disjointed legacy Warehouse Management Systems across its broad brand portfolio. “We had a number of different systems that were working on legacy hardware. At the same time, we were pumping through an immense volume of orders, particularly around December peak period. We recognised this was huge risk for us. If we can’t get our product to the store or customer quickly, our customers will just go elsewhere,” Patrick says.
After a near three-year tender process, the leading retailer has selected Körber Supply Chain’s K. Motion Warehouse Advantage Warehouse Management System as the future foundation of its omnichannel operations.
Super Retail Group is rolling out Körber’s WMS across its entire fulfilment operation, which includes six distribution centres in Australia and New Zealand. The distribution centres currently service more than 670 stores and store an impressive 24,870 Stock Keeping Units (SKUs) and the deployment is expected to be complete by FY23.
“There’s just no way that you could run a business at our scale and our complexity on paper. So, a huge driving factor in our decision to invest in a WMS was the risk factor. We needed a system that could scale up and be as stable in December as it in April or May,” Patrick explains.
Through the tender process, Patrick says once the team got deeper into the numbers, they realised the incredible importance of WMS. “Though the journey with Körber, we started to understand how the capability in this space had moved on and how the WMS was central to us setting ourselves up as a true omnichannel retailer,” he says.
Historically, Super Retail Group ran its home delivery business through its store network. However, as the Group continues to experience growth in online, there are limitations to operating this way and the retailer has plans to fulfil online orders direct from its distribution centre network.
“We want to have far more online orders moving through our warehouses than through our stores, and this new WMS is really the leapfrog in this strategy,” Patrick says.
ENTERING THE CLOUD
Building and maintaining IT performance in-house can be challenging, due to the level of infrastructure off-premises. By moving it to the cloud, a business reduces its risk – for example, in the case of fire, flooding, sabotage or system disfunction. It also significantly reduces the expense of hardware and hiring the necessary expertise, and thereby the cost of ownership.
Having a system Super Retail Group could rely on to withstand disruption was a crucial part of replacing its legacy systems, and as a result cloud-first was non-negotiable. For Super Retail Group, Körber’s flexible upgrade path was a real point of difference.
“Many WMS providers offer a forced upgrade monthly or fortnightly, but Körber’s WMS features an optional upgrade, and this was something that we were very impressed with. Of course, it’s important to have an upgrade path, but knowing that we have the choice is helpful for us given the nature of our operation and intense peak periods we experience,” Patrick says.
Another reason for cloud capabilities was in ensuring that Super Retail Group could focus on the core of their business. “We want to worry about the things we need to worry about. We don’t need to have these immense internal capabilities in technical areas when it’s not a point of difference for us. We instead have confidence in the Körber cloud offering to take care of the technical side and ensure that we have stability, security and high performance,” Patrick says.
AGILITY AND RESILIENCE IN TURBULENT TIMES
In supply chain and logistics, everything can change in a moment. COVID-19 demonstrated how customer needs can change rapidly – shifting online, with no chance of turning back.
In a world of pandemics, cyber-attacks, geopolitical tensions, and increasing threats of natural disaster – an agile and resilient supply chain is indispensable.
As supply chain complexity increases, agile and resilient supply businesses will be able to support new business models more easily in the future. As well as e-commerce, these models might include direct-to-consumer (D2C), selling through a partner’s physical stores, or via circular economy implementations such as reverse logistics. Most new business models will impact the supply chain to a greater or lesser extent, and agility and resilience will support them through this.
For more information on Körber Supply Chain, click here.
.png){kind=logo}
.jpg)
