Building resilience and reducing costs while elevating customer promise

Peter Kendall, CEO of Extolla speaks to NZ Supermarket News outlining strategic steps for supply chain resilience and customer impact, stressing the importance of efficiency and innovation in a challenging economic climate.

Table of Contents

• Inventory Forecasting and Planning
• Labour Productivity
• Warehouse Automation
• Sales and Operations Planning (S&OP) and Integrated Business Planning (IBP)
• Carbon Emission Reduction
• The Cost of Inaction
• Conclusion

In today’s challenging economic climate, New Zealand businesses face a storm of rising costs, declining GDP, and increasing customer price sensitivity. Supply chains are under relentless pressure to perform in an environment riddled with disruptions — flooding, Cook Strait ferry disruptions, geopolitical conflict, and even significant supply chain blockages like the Suez Canal incident. Gartner research reveals that 68% of supply chain executives have dealt with high-impact disruptions consistently over the last three years, often without sufficient recovery time before the next disruption occurs.

The ability to build a resilient, cost-effective, and high-performing supply chain is no longer a luxury – it is a necessity. Whether you’re a retailer, manufacturer, 3PL, or distributor, the steps outlined below can transform your supply chain into a competitive advantage, driving customer satisfaction and long-term profitability.

1. Inventory Forecasting and Planning

Effective inventory management is critical to resilience. By leveraging machine learning (ML) and artificial intelligence (AI), businesses can position inventory close to customer demand while minimising working capital costs.

Predictive fulfilment methods use advanced data analytics to forecast demand, ensure inventory availability, and maintain optimal service levels. This approach reduces lost sales, balances inventory costs, and helps fulfil customer promises. By 2026, Gartner predicts more than 50% of supply chain organisations will use ML to augment decision-making capabilities. To unlock this potential, businesses must invest in the right talent, such as data scientists and business intelligence specialists, to take advantage of the technology benefits available.

2. Labour Productivity

Labour shortages and rising wages are ongoing challenges that require innovative solutions. Improving operational productivity isn’t just about offering higher pay, but also about equipping employees with the tools and support they need to succeed.

Labour Management Systems (LMS) incorporating gamification and coaching can boost worker productivity rapidly. Engaged employees, clear expectations, effective coaching and proper training foster a motivated workforce that drives efficiency. Treating employees well while setting them up for success is a critical investment in any supply chain operation.

3. Warehouse Automation

The robotics and automation revolution has become more accessible, with costs for equipment like AMR’s and AGV’s dropping significantly at the same time as labour and warehouse rents continue to escalate. Robotics-as-a-service (RaaS) models now allow businesses to shift from capital expenditure (CAPEX) to operational expenditure (OPEX), flexibly scaling automation as demand fluctuates.

Automation isn’t just a contingency for labour shortages—it improves scalability, reduces errors, enhances safety and boosts efficiency. By conducting a robotics assessment, businesses can quickly determine the best solutions for their needs and ensure they remain competitive in a rapidly evolving market.

4. Sales and Operations Planning (S&OP) and Integrated Business Planning (IBP)

Effective planning is a cornerstone of supply chain resilience. When businesses align their planning processes through disciplined S&OP and IBP practices, they minimise variability, optimise resources, and drive performance.

These processes must start with customer demand and work backwards, aligning cross-functional teams – sales, marketing, finance, and IT – towards shared objectives. Companies that excel in planning achieve higher returns on invested capital, better inventory performance, and significantly reduced lost sales. The key is to ensure that planning is not just a financial exercise but a holistic, demand-driven strategy.

5. Carbon Emission Reduction

Sustainability has become a vital component of supply chain strategy. Customers are increasingly making purchasing decisions based on a company’s environmental credentials, and supply chain leaders must now tackle carbon emissions reduction alongside traditional goals like cost savings.

A well-executed sustainability strategy reduces both emissions and costs, particularly in areas such as transport and DC operations. Businesses should map their requirements, identify impactful opportunities, and treat sustainability as an integral part of their operations rather than a separate initiative. Acting now can transform carbon reduction from a compliance requirement into a competitive advantage.

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The Cost of Inaction

Too often, supply chains are treated as cost centres rather than as investments in customer satisfaction and resilience. This mindset results in a lack of investment that stifles both efficiency and effectiveness. While cost savings are important, the ultimate goal should be enhancing the customer experience and creating long-term value.

Businesses attempting to “squeeze” more from their supply chains without investment are missing opportunities. Supply chains are not deserts to be drained of resources. They are fertile grounds that require constant nurturing to yield better performance, reduced costs, and improved customer outcomes.

In Conclusion

In an era of frequent disruptions and economic uncertainty, nurturing your supply chain is essential. By investing in advanced inventory forecasting, labour productivity, automation, integrated planning, and sustainability, businesses can build resilient supply chains that are both cost-effective and customer-centric.

This isn’t just theory—it’s reality. Businesses that embrace these steps will see rapid returns on their investments and build supply chains that are ready to thrive in the face of uncertainty. Now is the time to treat your supply chain as a strategic asset, not a cost centre.

With thoughtful investment and the right strategies, your supply chain can become your greatest competitive advantage.

If you would like to speak with Peter Kendall about how Extolla could help your supply chain become more resilient whilst increasing your customer satisfaction, please contact Peter at contact@extolla.com

www.exolla.com