The secret to making customers care about supply chain

Imagine a world where customers care about how products are sourced, made, and delivered, understand what goes into pricing, and generally take great joy in the experience. A world where customers are fluent in the language of supply chain.

It’s not as farfetched as you may think.

Supply chains solve complex problems. And in the company of supply chain professionals, we use big words and complicated terms to talk about it. Words like multi-modal logistics and global transportation, mass-customisation and postponement, procurement and letters of credit, demand management, the cost of inventory and buffer stock, assurance of supply, warehousing, and the last mile.

We nitpick over the differences between distribution and fulfilment centres, debate the true definition of supply chain visibility and the role of control towers to support orchestration across a complex network of suppliers, trading partners, and carriers. And we’re still not sure if our industries are facing an apocalypse or simply working through the growing pains of transformation in the digital age.

It’s a mouthful. And as we dive into the technical details and jargon that comprise the modern language of supply chain, one can’t help but picture the average consumer’s eyes glazing over.

But that’s not necessarily the case. There’s mounting evidence people care more about supply chain than ever – they’re just not using our words for it.

Therein lies the secret.

The words used to describe supply chain were different at the recent Shoptalk Europe conference in Copenhagen, Denmark, a gathering of more than 2,500 retailers, start-ups, technologists, and investors all focused on the worlds of retail, fashion, and ecommerce. Though most attendees weren’t purely in the business of operations and supply chain, all were exploring how to reach, engage, and enlighten the customer wherever and whenever they might choose to shop.

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Big data analytics technology: disruptive and important?

Of all the disruptive technologies we track, big data analytics is the biggest. It’s also among the haziest in terms of what it really means to supply chain. In fact, its importance seems more to reflect the assumed convergence of trends for massively increasing amounts of data and ever faster analytical methods for crunching that data. In other words, the 81percent of all supply chain executives surveyed who say big data analytics is ‘disruptive and important’ are likely just assuming it’s big rather than knowing first-hand.

Does this mean we’re all being fooled? Not at all. In fact, the analogy of eating an elephant is probably fair since there are at least two things we can count on: we can’t swallow it all in one bite, and no matter where we start, we’ll be eating for a long time.

So, dig in!

Getting better at everything

Searching SCM World’s content library for ‘big data analytics’ turns up more than 1,200 citations. The first screen alone includes examples for spend analytics, customer service performance, manufacturing variability, logistics optimisation, consumer demand forecasting and supply chain risk management.

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Is Flowcasting the Supply Chain Only for the Few?

Flowcasting has often been referred to as ‘the Holy Grail’ of demand driven supply chain planning (and rightly so).

Driving the entire supply chain across multiple enterprises from sales at the store shelf right back to the factory.

So is Flowcasting a retail solution or a manufacturing solution? Many analysts, consultants and solution providers have been positioning Flowcasting as a solution for manufacturers.

They’re wrong.

While it’s true that some manufacturers have achieved success in using data from retailers to help improve and stabilize their production schedule, the simple fact is that manufacturers can’t achieve huge benefits from Flowcasting until they are planning a critical mass of retail stores and DCs where their products are sold and distributed.

For a large consumer packaged goods manufacturer, this means collecting data and planning demand and supply across tens of thousands of stores across multiple retail organizations, all of which have their own ways of managing their internal processes.

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Capitalizing on Cross-Docking

Today’s marketplace is moving faster than ever, and companies are challenged to distribute their products more quickly, efficiently and cost-effectively; cross-docking can be a useful tool to help keep pace with customer demand.

While cross-docking is not a new phenomenon, this process of moving material from the receiving dock straight to the shipping dock is gaining traction as more companies recognize its value in today’s competitive business environment.

Why Cross-Dock?
Companies choose to cross-dock for a variety of reasons.

Common benefits include:

Increased speed to market – With high turn rates and reduced handling, cross-docking helps to increase efficiency and get products to market faster. While typically associated with durable goods, cross-docking can be effective for temperature-controlled, perishable and high-value/high-security products as well, thanks to its high velocity.

Reduced costs – Cross-docking requires a smaller footprint than traditional warehousing and often utilizes less labor as well. The practice also eliminates the cost of inventory and product rotation. Considerable freight savings can be achieved by consolidating LTL shipments into full loads.

Improved service levels – Because product is shipped in bulk and picked at the cross-dock, the practice offers great flexibility for changes to orders further down the supply chain. This helps to ensure a more accurate – and more responsive – process with shorter order cycles.

Prime Candidates for Cross-Docking
Just about any type of product can be cross-docked, but cross-docking is particularly effective for companies that are moving heavy volume on any given day and need to do it in a precise way where service is critical.

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Seven Supply Chain Resolutions for 2015

Map your Extended Supply Chain: Our collective supply chain eyes were opened in 2011 as a result of the earthquake/tsunami in Japan, and then severe flooding in Thailand that decimated key suppliers in the high-tech sector.

Model Your Supply Chain: A relatively small but growing number of companies maintain an active network model of their supply chains that they use for on-going decision-making, from inbound supply flows to what products to make where.

Develop a Talent Strategy: Do you really have a plan for finding and developing supply chain talent? A few leaders do – but not many. A few years ago, Pepsico took a look at this – and wasn’t happy with what it found.

Start Benchmarking: In general, we do far too little benchmarking in the supply chain. I am referring not just to maybe participating in some survey or service that allows you to compare your results (sort of) with those of others, but meeting with companies to see how they do things, and swap and compare ideas and practices.

Review Your Technology Portfolio: Do you know exactly what software you have where? Do you have any “shelfware,” meaning software you paid for but never implemented, either in total or at certain locations?

Paint a Vision for becoming Demand-Driven: In the early 2000s Procter & Gamble came up with the “consumer-driven supply chain” concept, which the then AMR Research morphed into its demand-driven supply networks.

Start Lunch Time Education Meetings: I know a few companies – Campbell Soup used to be one of them and maybe still is – that hold weekly or monthly Friday “brown bag” lunch days focused on education. Could be an internal team member presenting insight into their area of operation.

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