Diversity of Thought Breeds Innovation

Embracing the diversity of thought, experiences and perspectives that women bring to the workforce will only hasten the pace of innovation and much-needed change in the industry.

Prostock Studio Welcoming New Employees

Women’s History Month is a great time to not only celebrate the women before us who fought for women’s political, economic and professional advancement, but to also take a critical look at the roles of women in today’s workplaces and industries. It’s an excellent opportunity to reflect on how we can work within our own industries to create environments where professionals from all backgrounds are invited to not only join the conversation, but to also find satisfaction and continued success at work.

As a woman in the supply chain industry, I’ve found that the key to my happiness and success in my work has been finding a working environment where I feel like my expertise and my contributions are appreciated and acknowledged. When I feel that I can freely express myself without having to prove my qualifications, I do my most innovative work, benefitting me, my employer and our industry at large.

This year, Women’s History Month has me thinking about my female colleagues, both past and present, and the unique contributions and perspectives they have brought to discussions and business initiatives. As natural connectors, women tend to be multi-faceted, with large social and professional networks. This lends a diversity of thought in the workplace that breeds innovation, and with the growing push toward supply chain digitization, the supply chain industry is ripe for innovative ideas that question the status quo.

Data leads digitization

One of the biggest opportunities for innovation in supply chain management is employing fulfillment and final-mile data for inventory and demand planning. Historically, for demand planning, we’ve relied on incomplete data sets, consisting largely of sales data with little consideration for transit times, fulfillment costs or geographic distribution of demand. Aggregating this data lends dimensionality to demand forecasting by taking into account the ways that all procurement and fulfillment costs work together to determine overall profitability.

The truth is, the same data sets exist for businesses of all sizes, but up to this point, the aggregation and analysis of this data has remained a high-level function reserved for enterprises and retail giants. However, as warehouse management systems (WMS) and transportation management systems (TMS) evolve to meet the growing needs of e-commerce sellers and small to mid-sized merchants (SMBs), fulfillment software could very well democratize many of these enterprise-level functions.

Big opportunities for SMBs

Opening up these data sets for SMBs will elevate supply chain processes, essentially providing the expertise of an additional staff member like a procurement specialist or data analyst. SMBs will gain the ability to truly optimize their inventory levels, supply chain costs, and ultimately, their overall customer experience. This digital overhaul will transform their relationship with supply chain operations by:

●    Determining risk tolerance. This is where SMBs can really customize their inventory planning. Businesses with a higher tolerance for risk (namely running out of inventory) can fine-tune their inventory levels for the least amount of capital expenditure. This high-risk inventory planning yields the highest profits and frees up capital to invest in other areas of the business. Businesses with a lower risk tolerance can optimize their inventory levels to insure against out-of-stocks. This low-risk approach requires greater capital expenditures but prioritizes customer satisfaction.

●     Increasing margins. Accurate demand forecasting cuts back on the heavy burden of inventory carry costs. The cost of excess inventory adds up quickly between capital expenditure, storage fees, insurance, and obsolescence. In the best-case scenario obsolete inventory is sold at a deep discount (often at a loss), and in the worst case scenario, it’s written off at the end of the year. Strategic inventory planning ensures that all inventory is able to be sold at its highest possible margin.

●     Measuring success by return on net assets (RONA). Often, merchants are surprised to discover low profitability at times of high-volume sales. These profit challenges usually aren’t tied to sales but to the misuse of a merchant’s greatest asset (inventory). By optimizing the supply chain, SMBs will increase their bottom line before even increasing their top-line revenue.

●     Stocking a distributed warehouse network. It’s clear that the new expectation for shipping is two days or less. SMBs looking to compete need to offer affordable 2-day ground shipping. The most effective way to achieve this is by forward-stocking inventory closer to end customers through a distributed warehouse network. Many SMBs, however, don’t have the supply chain in place to support inventory planning across multiple locations. Intelligent reporting enables businesses of all sizes to stock as many as three warehouse locations to establish a nationwide 2-day delivery footprint.

Moving forward together

As we move forward as an industry to prioritize digitization and the democratization of data, my hope is that we’ll move forward together. Embracing the diversity of thought, experiences and perspectives that women bring to the workforce will only hasten the pace of innovation and much-needed change in the industry.