Inbound Logistics | January 2024

Zara has also tapped into vertical integration to keep its supply chain running smoothly. By acquiring businesses at different stages of the chain, Zara is able to maintain better control of the value chain, which means it can react quickly to shifting consumer demands. Relying minimally on outsourcing, Zara controls everything from design to display to shipping, allowing it to gather valuable data at every stage. They can then analyze this data to identify inefciencies, pinpoint areas of success, and create accurate forecasting. Vertical integration also helps the retailer reduce risk, provide greater transparency to customers, and lower distribution costs. And because Zara is able to maintain control and oversight throughout the entire supply chain, better communication and collaboration between different partners can be achieved as well. In 2023, Zara’s supply chain strategies became even more distilled, focusing on ner details such as the purchasing process in Zara stores, what store managers and employees are responsible for as opposed to shoppers, and how sizing works (a common pain point for the fashion industry in particular). Zara invested in tech that’ll enable the brand to cut out the use of hard security tags, boost the digital experience for existing stores and focus on improving its size recommendations tech. Mars Sweetens the Candy Supply Chain Many Mars products, including Mars bars, Milky Way bars, M&Ms, Skittles, and Twix, continue to be popular with candy fans around the globe. Maintaining a competitive edge is crucial to standing out in the candy market—something Mars has done consistently for over a century. Given the sustained success of Mars Inc., it should come as no surprise that innovative supply chain and logistics measures have played a major part in keeping them ahead of the curve.

As the confectionery industry continues to grow, Mars has transformed its logistics operations by employing several technological advancements, such as specialized software, robotics, and pneumatic equipment.

SUPPORTING THE U.S. ECONOMY In March 2017, Mars announced it would invest more than $70 million in its U.S. supply chain. This investment ensured that more than 95% of candy products sold in the U.S. are manufactured locally. In October 2018, the company followed up with a $142 million investment in its Cleveland-based plant and another $31 million investment in its New Jersey plant in 2021. In 2022, Mars invested $175 million to expand its chocolate candy plant in Topeka, Kansas, to boost production of chocolate like Milky Ways and 3 Musketeers. WHAT’S AHEAD FOR MARS? Increased Transparency. Growing consumer distrust continues to be a major concern for many companies in the Big Food industry. In a 2021 survey, 90% of consumers said that transparency is important to their purchasing decisions. Throughout its century-long existence, Mars has gained a reputation as one of the most secretive companies in the United States. Over the past few years, however, Mars Inc. has made a conscious effort to be more outspoken. This shift came as a response to changing consumer behavior. The company also agreed to increase transparency amid increasing demands for research around health,

sustainability, and food safety. In addition to increased trust and brand awareness, the company is improving its transparency as a means to attract talent, as workers are more likely to gravitate toward companies with a strong mission. Enhanced Automation. In light of the expected growth of the confectionery industry, Mars has been working to completely transform its logistics department by employing several technological advancements, such as specialized software, robotics, and pneumatic equipment. In its confectionary business, Mars uses articial intelligence in its sensors on the manufacturing line to boost speed and accuracy. In 2021, Mars also partnered with Microsoft to develop a digital twin of its supply chain to “help simulate scenarios that would be too difcult to test with physical assets.” The company also utilizes AI to check in on its supply chain and how the weather is impacting its production; specically monitoring fungus that may hurt its raw material in India and Africa. Sustainability. Increased attention to climate change and other environmental concerns has changed the way customers view their purchases. In September 2018, Mars launched its “Cocoa for Generations” campaign as part of its “Sustainable in a Generation” plan with the goal of “xing the broken cocoa supply chain.”

112 Inbound Logistics • January 2024

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