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by | May 15, 2017

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In the wake of omni-channel demands, the goal of any eCommerce company is to optimize their end-to-end supply chain processes.

However, it could be argued that the order fulfillment stage is the most critical aspect of any supply chain, given current consumer demands. With Amazon pushing the boundaries of fulfillment with two-day (and even same-day) deliveries, eCommerce companies are forced to adapt to rising customer expectations.

The need to adapt to omni-channel pressures isn’t a secret — but that doesn’t mean eCommerce businesses are executing. As B2B and B2C supply chain execution requirements converge, there are 5 steps you can take to rethink your processes and close the loop between planning and execution.

The 5 Steps to Reengineer Your Fulfillment Processes

The need to segment supply chains based on customer profile data has been apparent for years. While customer fulfillment optimization Leaders show 77% adoption for this capability, Followers are almost half as likely to segment their supply chains.

For customer fulfillment optimization Followers to catch up to market Leaders, they’ll have to reengineer a number of their traditional processes. These are the 5 steps that you should take if you’re falling behind the customer fulfillment curve:

  1. Assess Upstream and Downstream Demand-Fulfillment Models: Timely alerts along the supply chain (from customers and suppliers) make it easier to react to service-level issues and disruptions in supply, giving you an opportunity to maintain strict fulfillment requirements. When implementing initiatives such as direct-to-consumer shipping, it’s important to leverage big data to understand even the smallest changes in volume. Look at both upstream and downstream fulfillment models to improve visibility and communication wherever possible.
  1. Consider the Demand-Side Requirements Upfront: Modeling all potential fulfillment options in an omni-channel eCommerce business can be difficult. Supporting all segments and order types means incorporating everything into one model, when possible, while including efficient connections with external points in the supply chain.
  1. Reengineer and Streamline B2B and B2C Fulfillment Processes: B2B companies are challenged to manage a variety of order types, such as drop shipping, replenishment, etc. Rather than having strict supply-chain processes in place, it’s important to support a dynamic network and manage orders in relation to customer demands.
  1. Link Demand and Fulfillment Processes with Integrated Systems: Fulfillment execution must be integrated so that B2B and B2C orders are orchestrated, eliminating conflict in the process. In-house operations to package orders must be designed with transportation in mind to ensure the variety of customer demands are met with effective omni-channel models.
  1. Embark on a Journey of Continuous Improvement: The days when batching and paper-based modeling were sufficient to standardize fulfillment are gone. You have to be able to constantly adapt to new customer demands and their rising expectations. If you plan for continuous improvement from the outset, it will be easier to remain dynamic moving forward.

Executing these steps is further complicated by the need to link financial costs and logistics activities together. If you want to enable proper allocations to products, customers, and channels, you have to be willing to change your fulfillment processes.

The leaders in supply chain optimization have found ways to succeed beyond traditional fulfillment models. If you want to learn how they’re closing the loop between planning and execution, download our free research report, Profitable Supply Chain Execution with Customer- and Event-Driven Optimization.


Future Australian Transportation (click the hyper link) – “By 2050, Australia’s population will have nearly doubled, aged considerably, and still be largely urban-based,” he says. “The traditional modes of transport – road, rail, air and sea – will not be able to cope with that change. They are neither environmentally friendly enough to support large urban populations, nor terribly practical due to their massive reliance on infrastructure investment.”


Any business will have number of objectives, each describing a desired future condition toward which efforts are directed. An objective is a statement that clearly explains actions to be taken or tasks to be achieved by an organisation. If the objectives are accomplished, then the business should be a success.

The purposes of objective setting are, to establish a standard for evaluating the success of the business and set priorities for its management and staff. Objectives help keep management and staff focused on achieving set targets and keep them away from distractive activities that drain business resources.

The business objectives are always derived from the mission statement of the organisation and the business objectives explain “what” and “how”.  The objective of the Business Objective should be task-oriented.  It should clearly explain what to be achieved and how it should be achieve.  There should not be any room for ambiguity.  The effective objectives will always have verbs such as execute; reduce; increase; establish; implement etc.  Words such as facilitate and analyse should be avoided in business objective statement.

The life span of the business objectives could be short term as well as long term.  However, short term objectives should always lead towards the long term objectives. The objectives should always be flexible and can change as business progresses.  This is mainly because of uncertainties in the market place.  What is good for the business today may inappropriate for tomorrow.  One should not be afraid to re-define the objectives based on factual situation.

The objectives should be reasonable and achievable.  The success of the objective always depends upon ability align organisational resources.  We come across ambitious missions statements and objectives and the organisation may not be geared up to accomplish those objectives. The end result is tragedy. The objective should be simple and easy to understand by every one.

The objectives should be task oriented.  It should encourage and challenge all concerned in the organisation to attempt and achieve the targets.  This enables the organisation to measure its capabilities at the end of any specific time frame.  What we measure is what we get.

Some people want to achieve what they do not know but they are very firm that they want to achieve what they don’t know, they lack clarity but they are determined to achieve what they are not clear.  We often hear from the bosses that the task executed by the subordinate was not satisfactory.  However, we do not get to know why it is not satisfactory and how it can be improvised.  The purpose of the business objectives is to eliminate that anomaly.

Objectives

Cartoon Source: CARTOONSTOCK.COM



Graphic Credit: Tristan Louis

We are in an e-commerce world right from food to everyday needs come to our doorstep by ordering online. The total global retail sales in 2016 was estimated to touch US 22.049 trillion and that is 6% up from the previous year. It is estimated by “Worldwide Retail Ecommerce Sales: The eMarketer forecast for 2016” that by 2020 the e-sales will touch US 27 Trillion. With this background, I am exploring the option of why people go to the store to buy things. In my opinion, the reason known in psychological terms as Retail Therapy.

What is Retail Therapy

We all know what is retail therapy, but to provide authenticity to our thought process, I have quoted from Wikipedia.

“Retail Therapy is shopping with the primary purpose of improving the buyer’s mood or disposition. Often seen in people during periods of depression or stress, it is normally a short-lived habit. Items purchased during periods of retail therapy are sometimes referred to as “comfort buys” (compare comfort food).” – Source: Wikipedia

Over indulgence is quite common during the periods of emotional lows people would like to indulge in an activity that would give them some relief from the stress related depression through so-called retail therapy. Sometimes human get immense relief by indulging in activities (over spending, over eating, binge drinking etc.) that are not frugal. We often see advertisements such as “try your local”, this is to igniting regional or localized passion in the buyers to go to the local store and encourage the shoppers with gift vouchers, discounts, loyalty points and much more attractions.

If we review the statistics, it gives us totally different perspective. 1,425 U.S. consumers via Google Surveys revealed the reasons why they choose to shop in stores over online. The reasons are compelling. 62% of the participants mentioned that “To see, touch, feel and try out items”. The second biggest reason given by them was, one can take home immediately, the consumer would like to put to use the product without the wait. The third reasons given was, to return easily, this is a fair enough point. Online purchases mean one has to go to make an effort to return the product. What I like the most is an in-store experience which is closely aligned to the retail therapy theory. When one steps out of the home and mingle with people positive energy is infused, which works like a medication during periods of stress induced depression. The last but not least is to know more about information first hand by asking questions; I enjoy this part. Source of Statistics: Retail Dive.

If we distinguish between men and women preferences, there is no prize for guessing, women prefer to buy a product only by touching and feeling and if clothes by trying it out. When it comes to taking the product home immediately, men beat women. Men prefer to take the home immediately and use it if possible. The other two factors which relate to retail therapy and easy returns, both women and men behave the same way. When it comes to seeking additional information of the product, men are found to be more inquisitive compared to women who seems to rely on their gut feeling.

When we examine same parameters by age group without differentiating the sex of the survey respondents. The age group of 28-34 and 65+ prefer to see, touch, feel and make a decision. It is natural that the age group of 18-24 would like to take it home and use it immediately because younger generation prefers instant outcomes. The age group of 18-24 prefer to enjoy the in-store experience, agreed it is because they could do many things by going to a store or shopping mall such as meeting friends, networking, window shopping, etc. Again the same age group enjoy the in-store experience; it aligns with the above-mentioned point. When it comes to asking questions, again the age group of 18-24 tend to ask more questions to know about the product.

Last but not least is the Rural vs. Urban preferences. The results are obvious 71 percent in the rural area prefer to buy the goods in the store. A Harvard business report quoting Nielsen estimates revealed that rural areas are growing at 1.5 times the rate in urban areas. It is needless to add that all other parameters, rural consumers beat out urban consumers. When it comes to asking questions about the product, it is the urban consumer who is more probing in nature. Rural consumers trust the local stores and go by the store recommendations. Rural customers visiting a store is a necessity, and whereas for the urban customer it is a hobby, it is a sort of entertainment, it is a networking opportunity, it is an opportunity to explore the what is on offer.

In summary, in the world of e-commerce world, it is necessary to encourage customer to visit the store, loyalty points linked to airline mileage points, this was confirmed by Forbes, “Christopher Barnard, President and Co-Founder of Points a company dedicated to making loyalty programs more valuable and engaging believes that offering points or rewards are a key in attracting repeat business”. The second recommendation is the layout, give more space in the aisles to give customers to spend more time and make them comfortable, train the staff periodically, they are your ambassadors. Periodically, go for mark-downs and particularly in winters to encourage your consumers to visit the store apart from festive time. Last but not least, be visible online not as an e-commerce company but as a store to educate the consumer about the store offerings.

Change or Perish


Today’s world is evolving, everyday is a new day and new scenario in market place. The change has become certainty. The business dynamics are rapidly changing and creating severe competition and Economic Volatility. The powerful way to sustain in the global competition was not visible to many companies till 1980s. Top executives of the corporation tried many tricks to make it happen and survive and the business solutions were restructuring, and decluttering and also included the centralizing the authority and distribution with the fear of failure. Come 1990s, market conditions, the world has become one global village, globalization impacted the way we do business, and the technology dominated the way the we reach our customers and satisfy their needs. The later half of the 20th century the, the industrial revolution marked the beginning of the information age. The executives were put and tremendous pressure to cope up with the new development.

C.K. Prahalad is the professor of Corporate Strategy and International Business at the University of Michigan and Gary Hamel, lecturer in London School of Business policy and management have come up with an brilliant concept called as Core Competency Strategy. It can be defined as, “a harmonized combination of multiple resources and skills that distinguish a firm in the marketplace”.

It delivers three critical benefits to the organisation and they include:

1.     Access to the global markets through identifying core competencies and de-focusing on non-core activities, thus the capital deployment is on core business.

2.     Delivers significant impact on Customer Perceived satisfaction which develops customer loyalty and establishes the Brand Equity.

3.     Competitive differentiation which enables the business to negate the risk of imitation. The best example is Apple Technology, iPhone, DELL Distribution Model and many more.

This initiative gave birth to outsourcing and 3PLs and 4PLs. The new thinking started taking shape, manufacturers started managing network upstream and downstream firms supply chain. Supply Chain has become a source of competitive advantage. It is no longer competition between organisations, it is between supply chains. Supply Chain management has acquired battlefield techniques to combat and dominate the competition to deliver competitive advantage to the organisation. The competitive advantage comes in the form Cost leadership and Product differentiation and creating buyer value.

A cost leadership is all about developing cost effective product for the market place, it takes into account economies of scale, and the sourcing strategies without compromising the quality of the product. Product differentiation is about delivering unique product and creating the value for the buyer. Value creation delivers customer loyalty and improve brand equity. The best example being Apple Technology, those who use apple technology, do not mind cost but are specific about the product. To substantiate the statement, let us review the financial performance, apple announced 2016 financial results, and the quarterly revenue and the unique feature of the announcement is that, “we are pleased to have generated $16.1 billion in operating cash flow, a new record for the September quarter,” said Luca Maestri, Apple’s CFO. “We also returned $9.3 billion to investors through dividends and share repurchases during the quarter and have now completed over $186 billion of our capital return program.”

Competitive advantage or core strengths not only apply to corporate, it can be implemented by the individuals in delivering unique value addition and core competency skills to deliver competitive advantage. Like business the employment canvas has undergone vast change undisputed professions such as accountants, machinists, supply chain managers, software developers are being displaced due to lack of value creation and unique contribution to the organisation.

Before sign off, let me summaries, core competency is here to stay whether we like it or not, competitive advantage is going to dominate the world, and finally competitive differentiation and cost competitiveness are two mantras for success. Adopt to the situation or perish into the history!.

change

Cartoon Source: GLASBERGEN.


By Niklas Goeke

One of your team members is organizing a workshop on Friday. On Thursday, she calls in sick and asks you to fill in. Plot twist: The materials she sends you are clearly unfinished. Being an awesome co-worker, you rearrange your entire schedule and stay late to make sure everything is impeccable.

An effective and agile supply chain should deliver four benefits to the organization and they are sales revenue increase, profitability enhancement, improved customer satisfaction and customer retention. In a globalized economy, the role of Supply Chain has never been as critical as it is today. Supply Chain speed and flexibility have become two key levers for competitive differentiation and increased profitability.  The objective of supply chain management is to “lower the total amount of resources required to provide the necessary level of customer service to a specific segment” (Source: Houlihan 1993)

The key to success of any benchmarking activity lies in establishing performance measure that are competitive and at the same time attainable. Performance measures are the mile stones in a road map. If you are travelling from a location A to location B and the distance between location A and B is 100 KM. the first mile stone at 10 KM point indicates that 1/10 of the journey is completed and it give us an opportunity to measure our speed and understand whether we are on target or not and also indicates the task on hand that is 90 KM. to travel. Performance measures will not only allow us to measure the performance but also presents us an opportunity to reinforce and align the resources to achieve the business objectives.   These performance measures or key performance indicators are based on five factors and they are; Financial, Productivity, Utilization, Quality, and finally the Cycle time.

 

Stock market reactions on days when supply chain glitches are reported

  • Delays in product development:

     by -10%

  • Ramp-up/rollout problems:

     by -11%

  • Production problems:

    by -10%

  • Quality problems:

     by -9%

  • Parts shortage in manufacturing:

    by –7.5%

Profitability impacts in the year after the disruption

Profitability

Source: Prof. Vinod Singhal, DuPree College of Management, Georgia Institute of Technology

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