Joel Beal is CEO and co-founder of Alloy.ai, whose demand and inventory control tower software allows consumer goods brands to make faster and smarter supply chain and sales decisions. Alloy.ai is the platform of choice for leading consumer goods brands – including Bic, Bosch, Crayola, Ferrero, Melissa & Doug, Valvoline, and many more – across multiple industries.
Direct-to-consumer (DTC) emerged as the future of commerce in the past decade. It makes sense: cut out the middleman (retailers), save 50% of margin and connect directly with your customers.
What's not to like?
Well, it turns out retailers play an important, if evolving, role. Historically, retailers were the primary way to get inventory to your consumer, while today they should be thought of as a customer acquisition funnel.
Retailers – through their stores, their online presence, their brand and advertising – have a set of customers who come there to buy. DTC brands were built with the mindset that cheaper, targeted digital advertising and direct fulfillment would be much more cost efficient than going through a retailer. But many are now finding that, once you scale, those costs end up being higher than a retailer’s cut. If you’re a consumer goods brand, here are a few things you’ll want to consider and do as you think about how and where to sell your products.
If you want to be successful, you will eventually need to be in retail to scale
Virtually every successful DTC brand – Casper, Allbirds, Honest Co, Hims & Hers, Cotopaxi to name a few – hit a point at which they move away from pure DTC and start selling through retail once their economics flip.
You may think it’s much simpler to run an e-commerce or DTC brand (you only need to worry about one channel!), but a survey of recent headlines indicates otherwise. DTC brands that were on the top of the world a few years ago have taken a big hit recently – losing billions in market cap in 2022 and drastically underperforming the market in an already bad year – due to the inability to scale amid a confluence of challenges. And now views and strategies are starting to change.
That’s because the DTC model might work for a while, but you can only scale it so much.
Imagine that you are a brand selling sunglasses, and your target customer is 25-year-old men who live in California and Hawaii. You get a lot of traction early at a low cost because you can attract these customers using targeted ads with high conversion rates.
The problem is that you eventually run out of 25-year-old men who live in California and Hawaii to target. You can pay more for advertising to reach a broader group of customers, but the marginal effectiveness of those ads goes down, and your cost of acquiring customers (CAC) goes up. You might go from spending $5 to sell a $40 pair of sunglasses to paying $15 or $20. At that point, it may make more sense to reach new customers by placing your product at REI or Target.
The question for these brands becomes not whether to push into retail, but when. Now that the economy is slowing, and it is harder to raise money, businesses and investors are learning these lessons even faster.
Understand the tradeoffs between direct-to-consumer and retail
As a software company, we’re constantly considering how much we spend acquiring customers through conferences, digital advertising and public relations. We analyze which channels are more and less effective and adjust to ensure we make the right investments in each channel. Consumer product brands must do the same, thinking about all the costs of acquiring customers and tuning their channel mix accordingly.
DTC is a great way to build that direct connection with your most loyal customers. DTC darlings Dollar Shave Club and Warby Parker attracted a rabid base of loyal customers with e-commerce, but eventually needed retail to continue to grow. And Allbirds’ Joey Zwillinger recently acknowledged: “Being purely [direct-to-consumer] can hinder long-term potential because reach is limited.” The leader of the digitally-native footwear brand, which now also has a retail presence, added “We’ve held an omnichannel vision for the company ever since we started.”
Customer acquisition cost is becoming more expensive, often prohibitively so, for DTC brands on digital channels. As more brands compete for eyeballs via paid advertising on social platforms, ad costs go up. Remember, pricing algorithms in these marketplaces are influenced by demand. The fact that online advertising costs are soaring with CPMs and search CPCs rising 22% and 23% respectively, according to SKAI, is making the benefit of acquiring customers online look much less compelling. Digital ad spend is expected to continue on its growth trajectory for at least the next several years. MediaPost says that social media advertising CPMs are up a whopping 41% year-over-year. Google and YouTube’s CPMs were up 108%, according to Hunch.
It’s true that brands can be more targeted online, but only so much. With Apple’s iOS 14.5 update, consumers must now opt-in to share their advertising data with brands, and only about a quarter are choosing to do so. This change decimated Facebook’s ad business, and the DTC brands that rely on Facebook ads don’t get the same customer insights they used to get.
Analyze which channels are working and which are not. That may change from one year to the next. Continue working to rebalance your approach based on what the cost structure looks like.
Take your data-driven “e-commerce mindset” into the retail world
To understand how your channels are performing, you need visibility into what’s working and what's not. DTC brands are very comfortable using data from e-commerce and online advertising to inform their growth strategy. But once you start selling to customers through various channels, balancing and rebalancing are much harder because each of those channels must be managed differently, and it isn’t as easy to get the same insights and intelligence from sales in retail.
Ensure that you’re investing in technology to help you understand what’s selling, the margins and velocity of what’s selling, and where it is selling. That way, if you sell through Amazon, Costco and Walmart, you will know which of those retailers and geographies are performing the best for you –down to the store-SKU level.
Today most consumer brands’ visibility ends at their own distribution center, so having visibility into your sales and inventory in your retailers’ networks is a competitive advantage. You can choose to work more with the retailers that are your top performers, and you can deprioritize those where you are seeing less of a benefit. As a result, you may opt to send less product to retailers that are not moving your product as successfully. You can also use demand and supply intelligence to inform your promotional and pricing strategies and other efforts.
Retailers can benefit from your granular visibility, too. Use it to help retailers order the right amount of product at the right time. Helping your retailers in this way is more important than ever since retailers are increasingly squeezing brands to deliver more value. Using data to understand current supply and demand can help smaller brands look like domain experts, even if they don’t have huge teams managing retailer relationships like established brands do.
But technology only gets you so far. You also need to make sure that no matter how your product is sold, everybody involved with that product can see its sales performance. That doesn’t happen in many cases because most companies have completely different teams working for their DTC and wholesale businesses. Often, those two teams don’t know what’s happening with the other side. The two sides are completely siloed, which inherently makes it difficult for the brand to compare and rebalance its e-commerce and retail efforts.
Break down the barriers between the e-commerce and retail sides of your organization. Provide all team members with the visibility and data insights they need to sell more products, save time, and quickly sense and solve complex supply chain challenges for your brand and for your retail partners.
Understand that approaches differ, but customer acquisition cost is the name of the game
The optimal distribution approach will be different for every brand. But whatever mix of DTC and retail – and whichever collection of retailer partners – you decide to use at any given point in your lifecycle, the bottom line is that optimizing for customer acquisition cost is the name of the game.
If you don’t understand this, and you cling to one approach at all costs, you are probably wasting money and missing out on the opportunity to become more efficient.
But if you gain visibility into what levers you can use to accomplish your goals, you can land on the right mix to reach those goals, maximizing your profitability and driving higher growth.
Supply chain managers at consumer goods manufacturing companies are tasked with meeting mandates from large retailers to implement item-level RFID. Initially these requirements applied primarily to apparel manufacturers and brands. Now, realizing the fruits of this first RFID wave, retailers are turning to suppliers to tag more merchandise.
This is one more priority for supply chain leaders, who suddenly have RFID added to their to-do list. How to integrate tagging into automated production lines? How to ensure each tag functions properly after goods are packed, shipped, and shelved? Where to position the RFID tag on the product? All are important questions to be answered in order to implement item-level RFID. The clock is ticking on retail mandates.
Different products, new RFID considerations
Hangtags, the primary form of apparel product identification, present a relatively easy way to attach an RFID tag. Pressure-sensitive labels likewise can carry an RFID inlay. The inlay, consisting of a microchip and antenna, holds the product’s unique identifying information. This tiny device is activated when the RFID reader passes by it. For nonapparel products, in many cases, there is no way to attach a hangtag. Therefore, a pressure-sensitive RFID label often must be put directly on the product. If the product is packaged in a box, the RFID carrier can be attached to or placed inside the box. Either way involves the use of just the right solutions, including the adhesive, shape, dimension, and placement. Moreover, there must be an efficient way to attach the labels to products. This requires process engineering and sometimes capital investment to integrate RFID labeling into highly automated manufacturing lines.
Metals, liquids, and low-surface-energy (LSE) materials pose hurdles for RFID item tagging. Tag and label inlays cannot be read properly through metals and liquids, and the pressure-sensitive labels do not always stick well to product surfaces containing silicone, vinyl, polyethylene, and polystyrene. Very small items are also difficult to tag. Metal paint cans, caulk or paste tubes, lipsticks, and reusable water bottles are just a few products that present RFID tagging challenges.
In other cases, it is not so much the product itself that hinders readability but rather the shipping method. For example, it is relatively straightforward to apply an RFID tag or label to a bag of fertilizer. But the fertilizer bags might be stacked 60 deep on a pallet. The pressure is too much. It damages the inlay, killing the tag’s readability. So, RFID tags, which were perfectly fine coming off the production line, are now dead from the stacking pressure.
Solutions and testing
RFID tagging and labeling programs take time to get right. While some manufacturers can set up a successful process in a few weeks or months, for others it can take six months, nine months, a year or longer. Variables influencing implementation time include capital equipment investments, the product types (for example, are the materials, shapes, or surfaces potentially problematic?), label supplier capacity and capabilities, and third-party testing rounds.
The good news is that best practices are being refined every day to incorporate RFID on difficult-to-tag products. A case in point is finding answers to RFID-inlay readability issues on metal or liquid products. There are ways to attach an RFID label to the product’s lid or cap.
The University of Auburn RFID Lab is the de facto U.S. authority on all things retail RFID. Through its ARC program, the lab works with end users to make sure RFID tags meet or exceed their required performance and quality levels. Walmart, for example, requires its suppliers to source from Auburn RFID Lab’s ARC program-approved inlay companies. “ARC is a test system and database that stores comprehensive performance data of in-development and market available RFID tags,” according to the lab’s website. “ARC has been working with end users to translate RFID use cases into specific levels of performance in the ARC test environment.”
High-quality RFID tags and labels are at the heart of it all. The following are some considerations to keep in mind when choosing an RFID tag and label provider:
What are their quality control and testing capabilities? Can they confirm that every tag is readable? Do they have software to verify that UPC and RFID information match up? Do they possess familiarity with Auburn’s RFID Lab approval process?
What is their capacity? How many thousands or millions of inlays do they create per day? Are there minimum order quantities?
What are their order management and shipping processes like? What is their delivery speed? How easy are they to order from? Where are their print facilities located?
Do they offer customization? Do they possess specialized equipment? Can they die cut irregular shapes, including very small dimensions? Do they possess adhesive expertise and application equipment? Do they have solutions for metal, liquid, and other difficult-to-tag items? Are they able to configure label rolls to work on automatic label dispensers?
It takes trial and error to implement RFID item tagging for nonapparel products. Effective, compliant programs do not manifest overnight. Collaboration with experienced label providers and the Auburn RFID Lab will help manufacturers overcome even the most complex RFID tagging challenges. There will be a roadmap to success, and the results in the form of better inventory visibility, swifter sell-through, and stronger sales will be well worth it.
About the Author
George Hoffman is chairman and CEO of FineLine Technologies, a service bureau providing barcode and RFID-integrated labels and tags. All opinions are the author’s own.
Forklift batteries power the fleets at the center of facility operations. If your batteries are well-maintained, your team is empowered to drive efficient, sustainable, and productive operations. Given your forklift battery can also be as much as 30% of your forklift’s total cost, taking care of it is crucial not just for its longevity and efficiency, but in creating a safe, productive, and cost-effective facility. Improper battery care can create a financial strain on your company along with plenty of safety hazards.
Pulling from decades of experience helping some of the largest and busiest facilities across the country with their power management challenges, I’m sharing the most common mistakes that can shorten your forklift battery’s life by up to 60% or one to three years.
Most common forklift power system design mistakes
Four of the most common mistakes are associated with how a company designs its forklift power system, which includes not just the battery but also chargers and changers.
Not considering your batteries as part of a power system. Your system design should be based on more than just the forklift’s battery specification. The best power systems are built after an assessment of your facility’s applications and workflows, such as when and how batteries are watered. To drive higher uptimes and longer battery life, companies need to optimizing not just for everything they do today but also consider their future plans.
Using the wrong charger. Many companies, trying to save a little money, switch to new batteries but use old, mismatched chargers. For example, they change their batteries every five years, but only buy new chargers every 10-20 years. While the battery technology has improved, the charger (the intelligence) hasn’t, and that means they may not be getting the most out of their new battery equipment as far as charge profiles and efficiency. This shortens battery life, drives up power bills, and in the long term, ends up being more expensive than simply buying new chargers.
Having malfunctioning chargers. Chargers are designed to provide power to batteries up until 100% capacity. When a new model of charger is unable to provide full power, it is often due to malfunctioning power modules or communications issues between battery modules and the charger itself. Additionally, older style high frequency (HF), silicon controlled rectifier (SCR), and Ferro chargers may experience output capacity drop off due to malfunctioning fuses, diodes, SCRs, insulated-gate bipolar transistors (IGBTs), and capacitors. If left unchecked, the reduced output of these chargers will cause batteries to sulfate and ultimately fail.
Not planning a charging standard operating procedure (SOP) in advance. Most companies charge when it’s best for the operator, but it’s important to set up a charging schedule that also takes into account the needs of your facility and your batteries. A schedule that accommodates both the operator’s and the battery’s needs will lengthen lifespan tremendously. This requires regular monitoring to ensure compliance with the charging SOP. If this is not maintained, batteries will often fail due to the lack of consistent charging.
Most common forklift power maintenance mistakes
The remaining common mistakes focus on how a company maintains its batteries and chargers.
Not implementing an equalization schedule. Lead acid batteries require an equalization charge on a regular basis to maintain their long-term health and capacity. Build a plan for equalization into your battery charger plug-up times, then set those schedules into your chargers.
Not watering correctly. Batteries need to be watered on a schedule. Ideally, batteries are watered right after charging to avoid electrolyte overflow issues, chemical spills, and degradation. Proper water levels ensure electrolytes stay in balance and batteries don’t overheat. These expensive mistakes add up over time.
Having a malfunctioning single-point watering system. Single-point watering systems are employed for labor savings in the weekly watering of batteries. While useful, these systems are subject to failure due to abuse and just normal wear and tear. Oftentimes, these systems will fail at individual watering points and are not noticeably malfunctioning. This will lead to unequal watering and ultimately a series of battery failure points over time. This too must be regularly monitored for proper function.
Not responding swiftly to maintenance issues. It’s important to set up a maintenance schedule so you can ensure every battery and charger gets attention when it should. Early identification of issues, paired with course correction, can nip issues in the bud, greatly extending the life of your equipment.
Your forklift batteries are the preservers of power at your facility. If properly cared for, they power smooth and reliable operations that keep downtime at bay. The unexpected can and will happen every single year—that’s just a part of business. But the expected, that is something we can prepare for. Companies that take a proactive approach to their power and their facility’s unique power are poised to take on any challenge with an uninterrupted power supply.
More than ever before, supply chain businesses are faced with dynamic conditions due to consumer buying trends, supply chain disruptions, and upheaval caused by other outside forces including war, political instability, and weather conditions. Supply chain companies, including warehouses, must be able to pivot quickly and make changes to operational processes without waiting for weeks or months.
As a result, warehouse management systems (WMS) need to be agile enough to make changes to operational processes and turn on a dime in today’s fast-paced world. Traditional warehouse management systems, however, are rigid and complex, not easy to customize or change. In addition, integrations—especially to modern technologies such as the internet of things (IoT), artificial intelligence (AI), and machine learning—can be problematic.
Furthermore, traditional warehouse management systems depend on the expertise, experience, and knowledge of software developers to hand code applications. This type of technical labor is costly and can be hard to find, leading to dependence on the WMS software developer. Whenever changes or customizations to traditional WMS are needed, experienced software developers are needed, and this effort is usually time-consuming and expensive.
One solution is to consider a warehouse management system built on a low-code application platform (LCAP). Unlike traditional warehouse management systems, software applications built on LCAPs are more flexible, adaptable to meet changing business requirements, easier to integrate, and scalable.
[subhead] What are low-code application platforms?
LCAPs give users a visual, drag-and-drop interface that allows them to create applications by assembling prebuilt components, integrations, and templates. This simplification of the software development process facilitates faster prototyping, iteration, and deployment.
It also enables application development to be open to nontechnical users who may have significant experience, knowledge, and expertise in warehouse operations. Nontechnical users can work alongside IT resources to automate workflows, create business rules, process flows, and data models. To do this, visual tools are used to replace the need for writing complex code. Event-driven triggers and actions are leveraged to automate repetitive tasks and integrate with other systems. This can lead to better alignment of operational processes within the warehouse.
Low-code application platforms may also include features to promote team collaboration. Multiple users can work on the same project simultaneously, and version control mechanisms help to ensure that changes can be tracked and managed efficiently. In case it becomes necessary, rollback can be used to return to previous versions.
Low-code application platforms include tools for deployment, hosting, and maintenance. Applications can be deployed by users to a variety of environments with only minimal configuration. Maintenance and updates can be handled within the platform, and automated testing and deployment pipelines are frequently used.
Seven benefits of LCAPs
There are many benefits to using an LCAP as opposed to a traditionally coded warehouse management system, including:
1. Adaptability and ability to customize. LCAPs provide significant value for a WMS due to the speed at which applications, features, and customizations can be developed and deployed. This can help to ensure higher customer satisfaction and the ability to adapt more rapidly to supply chain disruptions, changes in demand, and advances in technology.
LCAPs help solve the challenges faced by a rigid traditional WMS by making the WMS faster and easier to tailor to meet customer or business requirements without high-priced IT resources. This can translate into time and labor savings for the warehouse operator.
2. Integration. Atraditional WMS often does not have the capability of integrating with cloud-based services, limiting the ability for it to take advantage of the cost benefits, flexibility, and scalability of cloud computing. In addition, it is often challenging for traditional warehouse management systems to integrate with automation technologies including robotics, autonomous guided vehicles (AGVs), conveyor systems, and other technologies.
Because LCAPs leverage built-in connectors as well as application programming interfaces (APIs) that facilitate integration with other systems, integration is seamless, ensuring a more efficient, cohesive ecosystem. This ease of integration can aid in unifying data across different systems to improve decision-making and information visibility.
3. Scalability. As a business grows, warehouse operations typically become more complex. This complexity typically leads to the need to handle increased volumes of data and more complicated workflows as well as expanded warehouse operations. This can present challenges for traditional warehouse management systems.
Low-code application platforms are able to scale more easily to handle increased volumes of data, more operational complexity, and additional functionality without a complete overhaul of the WMS. It is faster and easier to make quick adjustments on a WMS built on an LCAP. The system can easily scale up or down to handle new business requirements, changes in demand, and much more.
4. Security. Older warehouse management systems may lack the advanced security features required to protect sensitive data from cyber-attacks. Modern low-code application platforms typically include robust security measures to ensure that data is protected.
5. Up-to-date user interface and user experience. The outdated user interfaces commonly found with many older warehouse management systems can hamper productivity and lead to errors. WMS users need to have a streamlined user interface, designed to focus their attention on operations, without distractions.
Using a WMS built on an LCAP can improve the user experience and boost productivity. This is because LCAPs often feature intuitive, user-friendly interfaces that enhance the overall user experience. This makes it easier for warehouse workers to navigate the software, reducing errors and frustration.
6. Real time visibility. Older warehouse management systems may not be able to provide visibility into warehouse operations, inventory levels, and order status in real time. This can reduce the responsiveness to customer and market demands and delay decision-making.
One advantage of using a WMS built on an LCAP is that it can be integrated to IoT devices and sensors. This will enable the capture of real-time data on inventory levels, environmental conditions within the warehouse, equipment status, and more.
7. Data management. Today, with the popularity of online shopping, a WMS needs to be able to handle a high volume of orders with many individual items per order. A traditional WMS, which is designed to handle goods by the case or pallet, rather than by the individual saleable unit, may have performance issues, such as with data lock up or data retrieval, when handling large volumes of data.
Using a WMS built on an LCAP can facilitate the integration of multiple data sources into one unified platform, improving data accuracy and consistency. All data is available in one place. In addition, there are built-in tools for data validation, cleansing, and governance. This helps to ensure high data quality, essential for reliable real-time data visibility.
Transformative potential
Technology continues to advance. Software development continues to evolve. By taking advantage of low-code application platforms to simplify the software development process, supply chain professionals can ensure that they are able to keep up with these changes.
LCAPs enable rapid development, customization, and deployment of software applications, enabling businesses to respond to changing market conditions and technological advances. The result is notable cost and time savings, increased efficiency, and more effective operations. Using LCAPs, companies can take advantage of increased flexibility, scalability, and adaptability to be more competitive, drive operational excellence, and support growth.
Gartner recently published a report discussing the big changes being wrought by artificial intelligence (AI) for procurement. The analysis begins with some intriguing data points:
By 2026, virtual assistants and chatbots will be used by 20% of organizations to handle internal and supplier interactions, and by 2027, 50% of organizations will support supplier contract negotiations with AI-enabled tools.
Data literacy and technology skills will be equally as important as social and creative skills (that is “soft skills”) for procurement staff.
By 2027, 40% of sourcing events will be executed by nonprocurement staff.
By 2029, 80% of human decisions will be augmented—not replaced—by generative AI (GenAI), as humans will maintain their comparative advantages in ingenuity, creativity, and knowledge.
One of the reasons for the forecasted rapid adoption of AI is that the technology seems to respond to a key pressure point on procurement as a function: the lack of staff or staff with the right skills and experience. Staffing concerns are driving procurement organizations to increasingly lean on digital technologies, especially AI and automation, to help. Let’s explore Gartner's argument.
Substantial increase in interest
Thanks to the advancements in the technology skills of procurement professionals and decision support software, there has been a remarkable 17-fold increase in interest in AI applications for procurement in 2023 compared to 2022. Gartner's team anticipates a substantial surge in AI pilot initiatives in 2024. It also sees this as a trend expected to establish widespread acceptance and utilization of AI in procurement in the years ahead.
In particular, the application of GenAI is expected to expand throughout the entire procurement process—presenting opportunities to enhance both the speed and efficiency of operations within the department. For example, autonomous sourcing solutions driven by AI are progressively becoming more adept at handling responsibilities and decision-making that traditionally demanded the expertise of seasoned sourcing professionals.
This expansion enables organizations to streamline sourcing events effectively, transforming them into a more accessible process. Consequently, individuals outside the professional sourcing realm, such as those in the line of business, can now define requirements, pinpoint supplier sources, and initiate and manage sourcing events. In essence, sourcing is evolving into a skill rather than merely a function.
As outlined by Gartner, failing to adopt AI technologies in procurement may place organizations at a significant competitive disadvantage in terms of cost efficiency and agility compared to their peers. To avoid falling behind, the analyst firm is advising procurement leaders to wholeheartedly embrace transformative technologies that will promote and cultivate collaborative relationships with suppliers.
Making AI your servant, not your master
To be clear, procurement professionals will remain pivotal decision-makers. While human decisions will be enhanced by GenAI, humans will continue to make a vital contribution via their knowledge, creativity, and insight.
The unique contribution of GenAI is its ability to generate fresh content, complete missing information, and formulate sample outcomes or scenarios. This capability will play a supporting role in strategic decision-making, augmenting the human decision-making process. Procurement organizations, for example, will want to use virtual agents to automate repetitive tasks, such as purchase request (PR) approvals, internal and external communication, and supplier approvals, enabling human teams to focus on other areas.
To make this work, procurement staff will need to adapt as technology changes the nature of their work, and companies will need to make attracting top talent a priority. Certain skills will be at a premium as AI becomes more prevalent in everyday operations.
This “future-proofing” of skills needs to occur along two axes. One axis is technical. The cornerstone of all AI models is high-quality data and that means organizations need to foster proficiency in data literacy. The ability to identify pivotal data elements influencing decision-making becomes paramount in unleashing the complete potential of technology investments. This ensures that AI incorporates the most relevant data for its intended purposes.
However, the human element will also remain crucial, and this is the second axis. The creativity of procurement staff will be even more highly valued than it is today, given that AI's limitations lie in comprehending problems lacking sufficient data or precedent. Here, skills such as critical thinking will be essential. It will also be important to make connections with internal and external stakeholders. As a result, the ability to make effective presentations and secure stakeholder engagement are also expected to be in high demand. Companies need to think long-term when it comes to professional development and prepare for a future when these capabilities will be essential.
As another analyst firm, McKinsey, has said, it’s the procurement leaders capable of demonstrating quantifiable and long-term value to the enterprise who will become strategic partners to the C-suite.
Moving the needle in procurement
While these predictions are close at hand, they can sound future tense. Yet leading global companies, like adidas, BT, Tesco, and Santander Bank, are already using AI to maximize returns on billions of dollars of spend via autonomous sourcing.
For example, telecommunications company BT is using an autonomous sourcing platform to manage two-thirds of the organization’s £13 billion annual indirect spend—a percentage that BT wants to increase over time to 100%. Buyers have so far put more than 1,000 projects through the platform, automating admin-heavy tasks and cutting go-to-market time for project delivery that made a difference in overall performance. The platform supports various sourcing scenarios, including requests for proposal (RFP), requests for information (RFI), requests for quote (RFQ), sole source, delivery of staffing, supplier panels, and more. It also enables the creation and customization of requirements and the collection of supplier responses in different formats. Consequently, BT reports that autonomous sourcing allows nonprocurement team members to effortlessly initiate a request “with one sentence.”
Clearly, procurement leaders should make plans now to leverage the full power of procurement AI and GenAI. As Gartner recommends, organizations need to start by:
Building a roadmap that shows the technologies organizations need in key areas such as collaboration, negotiation, and sourcing;
Exploring which types of work can be commoditized; and
Looking very carefully at AI procurement vendor offerings—including their research and development (R&D) spend and focus.
But whatever you do, don't delay. CPOs need to start working with CFOs to introduce AI-powered sourcing quickly and secure the results the organization needs to meet the challenges of an uncertain global economy.
Why? Because this AI future is here today. As committed autonomous sourcing user BT has said, “We’re not thinking about if GenAI could help us. Instead, we’re doing it—and across billions of pounds of spend.”
In a male-dominated industry like supply chain technology, there is a growing opportunity for women to lean in and contribute their unique skills and perspectives. Research consistently demonstrates that diverse teams outperform less diverse ones, emphasizing the importance of inclusivity and gender diversity within the industry.
According to research by McKinsey & Company, companies with more than 30% female executives are more likely to outperform companies with only 10% to 30% of women leaders. The study also found more gender-diverse companies outperform the rest by 48%.
In light of this research, every supply chain company should take a moment to examine how to better diversify its leadership team and enable women to advance in the industry.
Strengthen the university-to-supply-chain pipeline
With no end in sight to the supply chain talent crunch, this protracted crisis presents an opportunity for more women to jump into the supply chain field. At Optilogic, we have found working with universities with supply chain management programs a great way to encourage budding female practitioners as well as create a future talent pipeline.
We connect with local University of Michigan students to teach them about supply chain design and get them involved in hands-on testing, training, and networking events. I am also working on a joint initiative with the female leader at the University of Michigan Ross Master of Supply Chain Management program on a STEM panel for women in supply chain.
Promote clarity and dispel bias about supply chain careers
Even in 2024 misconceptions and biases exist about supply chain roles for women. Women may perceive supply chain roles as being not well suited for females, especially some front-line roles in logistics and warehousing where women are underrepresented in traditionally male-dominated roles. Conscious or unconscious bias may exist with hiring managers as well.
Employers can also consider improvements to supply chain roles to make them more flexible and family-friendly. For women in the workforce, especially those with children, benefits like flexible hours and roles that allow them to balance work and other responsibilities can help address real barriers to entry.
Practical ways you can support women in supply chain today
Below are three ways the industry can help support female leaders.
Create a personal “board of directors.” Support female executives in the supply chain industry to move ahead in their careers by enabling them to cultivate a personal board of directors. This may consist of a few individuals who can offer advice, mentorship, support, and diverse viewpoints. These mentors can be both men and women who are inside or outside of the industry and can create a well-rounded network for personal and professional growth.
Join a women leaders platform. Organizations, platforms and groups designed to provide networking opportunities, mentorship, and skill-building resources are another great opportunity for female executives in the supply chain industry. For example, the Optilogic Women Leaders platform empowers the next generation of female leaders to thrive, leading to a more diverse and fair work environment.
Pass it forward. Female executives in the supply chain industry can also advance the cause by sharing their experiences with other professionals and supporting educational programs that promote women leaders. They can also attract young women to the supply chain industry by promoting their successes and encouraging them to pursue careers in the industry. Another simple yet effective way to support other women is to stand up for one another in meetings, give each other the floor, and promote others to encourage high potential female leaders.
It’s important for everyone in the supply chain industry to support women who are ready to rise in the ranks through the recruitment and development of female executives. Doing so will help ensure companies remain competitive by harnessing the power of gender-diverse teams.