The 4 R’s of supply chain management

Today’s markets feature faster fluctuations in consumer trends, a more diverse consumer market, long-tail business models, and smaller but more frequent orders. Due to this, the different actors of the modern supply chain tend to reduce inventory levels with just-in-time methodologies. But to obtain good results with this type of strategy, a high degree of Reliability from suppliers upstream in the supply chain, as well as high in-house efficiency to provide these same levels of reliability to customers downstream. This implies being able to provide raw materials, merchandise and services just when they are needed, with the expected availability and with agile and reliable delivery times.
One of the main causes of lack of reliability is variability, which is why management methodologies such as six sigma, which precisely seek to reduce the variability of the results of the processes and which are applicable to different areas throughout the supply chain: manufacturing processes, distribution, order preparation, reverse logistics, etc.

With globalization, the number of consumers and the diversity of their profiles has expanded vertiginously, especially fostered by electronic commerce, which is leading the growth in current consumer markets.
Online sales have caused the evolution towards higher and higher expectations in the speed of shipping. Currently, 24-hour delivery times are becoming popular and initiatives are emerging, especially promoted by the main e-commerce giants, to get the merchandise to the consumer on the same day the order is placed.
If in traditional markets a good product at a good price were the main ingredients for competitiveness, now immediate delivery must be added to the equation. This significantly increases the demands on the supply chain, which must be able to satisfy small but very frequent orders while keeping costs within profitable levels, including last mile costs. In modern markets, the supply chain agents with the fastest response capacity will be the winners.
An agile response also requires having highly efficient warehouses. With systems such as Disban H automatic dispensers for high-speed automatic order preparation, without inventory errors during operation, a response can be provided even in peak work conditions or where demand suffers great fluctuations. Examples such as consumer product warehouses with seasonal campaigns or on specific dates, sectors such as pharmaceutical logistics where order processing is concentrated in certain time slots, warehouses for online stores that may be receiving new orders 24 hours a day, 365 days a year. year etc
When the merchandise requires manual handling, due to its physical characteristics or diversity of references, the ATOX light-guided system provides a semi-automatic picking system with operations pick-to-light and put-to-light, optimizing the tasks of warehouse operators while reducing inventory errors.
ATOX automations provide great versatility, so that in addition to streamlining order preparation operations, it can be applied to the optimization of reverse logistics tasks.

Resilience is the ability of the supply chain to adapt to unforeseen events and continue to function. Modern markets are characterized by increased volatility, uncertain future demand patterns, products with a shorter life, etc.
The identification of the most vulnerable links in the supply chain and the analysis of their risks becomes of great importance. To this is added that, due to the characteristics of current economies, there has been a tendency to reduce inventory levels and, with it, safety stock levels. This represents greater demands for all intermediaries in the chain, who have to ensure reliability in delivery times, the availability of merchandise in the event of unforeseen demands, etc.
Warehouses and distribution centers must be more efficient, incorporating automation systems that streamline internal logistics and allow synchronized inventory control. ATOX Soluciones Tecnológicas automated systems are modular and highly versatile, with a great capacity for scalability and adaptation to the future needs of warehouses and to variations in their management processes.

The relationships within the modern supply chain must be understood as a broader concept than the traditional one. A basic supplier-buyer relationship is based primarily on prices, and the flow of information between the different levels of the supply chain is minimal. With a modern logistics strategy, deeper relationships are established, which facilitates the sharing of information, greater efficiency of applied IT technologies and the adoption of vendor-managed inventory systems (Vendor Managed Inventory, VMI). All of this makes it possible to improve reliability, sow the necessary conditions to efficiently apply JIT methodologies, and more effectively mitigate the bullwhip effect.

In the previous sections, the 4 Rs were discussed as principles to improve logistics strategies and supply chain management. But within the supply chain, and more specifically with regard to order preparation, there is also common talk of the 5 R’s (for “Right” in English), which in Spanish is usually translated as the 5 Cs (for “ Correct” in Spanish). The 5 R’s refer to the objectives to be pursued for efficient order preparation:

1. The Right goods
2. In the Right quantity
3. At the Right place
4. At the Right time
5. At the Right price

Often 2 additional objectives are added:

6. To the Right customer
7. In the Right condition

speaking then of the 7 R (or the 7 C in Spanish).
One of the keys to achieving these objectives in order preparation is to use automatic order preparation systems such as ATOX Disban H automatic dispensers or miniload systems. In this way, orders can be fulfilled at high speed without producing inventory errors during the operation.
In addition to automatic dispensing, the light-guided system can also be used for order preparation with pick-to-light operations, streamlining the tasks of warehouse operators, improving ergonomics and reducing inventory errors.
Automatic order picking systems can work in coordination with the intelligent roller conveying system designed and manufactured by ATOX. In this way, several operators can collaborate in the preparation of the same order without leaving their warehouse area and the sorters can automatically classify the merchandise according to the current status of the order, or according to its destination in the delivery area.