As the internet becomes more the default location for consumers for browsing and purchasing, supply chain and merchandising support needs to respond and become the initiators, moving from a pure service role, to an enabler and a differentiator. Martin Christopher from Cranfield many years ago put it like this "Companies in the future will compete on Supply Chains".
So what has changed, firstly the shopping experience is always on - 24 seven, secondly its a personal shop without the crowds, thirdly the expectation of the consumer is for reliable delivery in time at reasonable costs. What becomes possible with the on-line experience (knowing peoples preferences, habits, friends habits, and regional market trends) is a personal unique experience that achieves the following;
- A personalised route through the on line store.
- Promotions aligned to the individuals preferences and habits.
- Configurable delivery options (aligned to lifestyle)
As these trends pervade the e-commerce market the expectation of the consumer is to a unique service that delivers more of "what I want at the price I am willing to pay, delivered the way I want it."
Some of the consequences for Supply Chain are the following
- Twenty four hour logistics provision, (pick face, warehousing, packing and despatch)
- More flexible modes of home delivery and collection locations.
- More responsive logistics models that minimize vans on the road.
- More granular planning that delivers to a granularity of one.
This then requires that the Supply Chain thinks and plans differently.
Historically Supply chains have thought in terms of DFU (Demand Forecasting Units) typically a product and SKU (Stock keeping Units) typically an item in a location. As planning systems have got more sophisticated they are enabling the SKU to get closer to the consumer and the DFU to include customer type.
Now with on line journeys that are track and traceable and buying patterns that can be uniquely defined and developed, suddenly the SKU is effectively in "Our own store", this means systems now need to understand systemic decisions, probabilistic forecasting, deterministic choice and an element of the nudge economy.
This means that we can search the "Big data" we now have, available in real time, from mobile browsers, to give us visibility into a very complex world (Lora Cecere from Supply Chain Insights - highlights this in a number of her presentations.) The algorithms that will help us do this are already available and are helping a number fast moving businesses respond to my requirements through the supply chain to me!
Costa Express is managing to deliver the coffees we require through remote machines and still ensure maximum customer service (using fast and responsive replenishment techniques)
Wiggle (The Tri Sports specialist) deliver supply chain passion, performance, and perfection to their customers.
Both of these companies use tools that are tomorrows supply chain logic, enabling predictive replenishment, predictive commerce and predictive business.
So if you want to stay ahead of the pack? HERE
- How granular is your Supply Chain becoming?
- How unique are your customer experiences?
- Have you explored the concept of merchandising to one?
- How structurally flexible is your supply chain?
- Are you ready for the next peak in demand?
- How good are you at keeping your customer promise?
Dave Food