3 Dangers of Supply Chain Complacency

Disruptions in the supply chain may take unprepared companies by surprise.

It’s a common phrase: “Don’t rest on your laurels.” In other words, don’t be satisfied with your past successes. Go out and strive for more.

In today’s culture of “hustle” and entrepreneurship (for better or worse), where you are expected to be available to your business or boss 24/7, this phrase seems obvious. However, we have seen many businesses over the past several years run into problems due to a lack of supply chain innovation, slow reaction to changing market conditions and a resistance to change.

Just recently it was announced that Sears/Kmart will be closing another 40 retail locations, with a total of 300 planned closures this year.

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Many businesses run into problems due to a lack of supply chain innovation.

The company is not alone. This is just one example of many in the current retail crisis.

From an outside perspective, it seems like more effort could have been placed in developing an omnichannel strategy, as consumer preferences changed and the desire to shop from home grew.

Those companies that viewed omnichannel strategy development as a trend or buzzword are now struggling. This is where I see the danger for supply chain managers and the industry as a whole.

With so much technology available to managers, it is easy to become overwhelmed and dismiss the latest developments in blockchain, artificial intelligence, machine learning and virtual reality as hype that has nothing to do with your business. This is, however, a dangerous and slippery slope.

While some companies are still figuring out the best way to make a quick buck by cutting costs along supply chain operations, others are out trying to separate buzzwords from practical new solutions to current supply chain problems.

Without proper due diligence, several dangers lurk around the corner. Here are three:

Upset Customers

It’s not hard to upset a customer. It is as simple as missing a promised delivery date that could drive them to a competitor. Interaction with end-users is the final step in a long and complex supply chain and should not be underestimated.

In the case of brick-and-mortar retail, face-to-face interactions are essential. Right now, I am shopping for a new kitchen. I have a budget and am ready to buy.

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Something as simple as customer service can make your supply chain more successful.

I visited two locations to compare prices and offerings. In the first store, a small, family owned business, I was greeted, offered a drink and provided with competent advice.

In the second store, a large furniture chain here in Germany, I was completely ignored while two employees talked about their after-work plans. Where do you think I am going to buy my kitchen?

Something as simple as customer service training can go a long way toward being successful in the final stage of supply chain operations.

However, if large chains with limited online offerings continue to rest on their status and don’t focus on fulfilling customer needs, they will certainly run into problems in the future. This goes along the lines of the omni-channel experience.

A big topic within retail and e-commerce at the moment is virtual reality. IKEA announced recently the launch of its virtual reality online store with up-close and personal views of their furniture selection.

This is not a solution for customers who go to the store for the meatballs, but it certainly adds value to the overall customer shopping experience. IKEA seems to get it. Will other furniture stores follow suit?

Stronger Competitors

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There is always someone looking to take some of your market share.

If you are not figuring out how to get your customers the products they want in a comfortable online shopping experience or providing them with great service and user experience at your locations, someone else will find a way to do it.

Not too long ago, there were many startups striving to be the next Uber for the logistics industry. The competition within the last-mile delivery space remains fierce.

The point? There is always someone nipping at your heels looking to take some of your market share. Assessing market threats and opportunities on a regular basis is essential to survival.

Unsatisfied Employees

If supply chain managers continue to be tasked with merely finding ways to cut costs and are left with limited room to create and innovate due to rigid organizational structures, they may soon become discontent with their roles.

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Establish a culture of innovation and encourage employees to keep an open mind.

Establishing a culture of innovation and encouraging employees to keep an open mind about change and the implementation of new technology will help create a positive working atmosphere.

In other words, take care of your people and spend more time figuring out ways to improve your corporate culture.

This reminds me of one of my favorite quotes I heard at a supply chain conference in 2014. Supply chain professional Jeanne Reisinger said:

“Supply chains are not a cost to be managed. Supply chains are an asset to be leveraged and should be an engine that drives value creation.”

With this statement in mind, we must continue to find ways to leverage the supply chain and avoid complacency. This can be accomplished by keeping end users in mind, analyzing market opportunities and threats and creating a corporate culture that is open to change and encourages innovation.

This article first appeared on All Things Supply Chain and was republished with permission.

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David Weaver is an online marketing enthusiast and an inventory and supply chain optimization devotee.

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