Building Future Supply Chain

Frequently a discussion on the future of the supply chain focuses on technology, especially the integration and utilization of technology to build the future supply chain.  While this is all very necessary in executing the plan to get from here to there, the future supply chain requires a more directional and objective definition that focuses on the ‘what’ before focusing on the tools to define the ‘how’.  The definition of the ‘what’ will define a direction and a focus in which the organization supply chain should move.  The tools that will take you there, while important, should not be the focus of definition and the direction. The definition of the future should focus on the ‘what’ and the ‘why’ and then the organization must define the ‘how’ based on a flexible framework that will support the changing tools that will come along.

In the current retail omni market the large retailers have been focused on the ‘how’ because the ‘what’ was already defined by others in the market such as Amazon, market demands materialized and even consumer use of social networks and mobile apps.  This is generally a cultural practice with retailers in which the large retailers were never considered, nor wanted, to be on the leading edge..  While this is all well and good for these large retailers to use these tactics to catch up to the market, these retailers must recognize that they can no longer wait for the feature demand in the market and must take control of these developments and this requires a change in the culture.  Unless and until retailers take the effort to change their culture to develop their omni market strategy they will be playing catch up continuously and simply waiting for the end.  

This is the key challenge to the future of the legacy retailers and unfortunately the most difficult.  In many ways these large retailers have been able to control the market due to their size and market coverage.  There have always been smaller, niche, retailers that have traditionally lead the way in market and feature development, in many ways acting as an incubator for new development that, if successful, would be accepted and spread by the large retailers.  The change that has disrupted the market is the entry and growth of Amazon.  Amazon started as a nimble and agile retailer whose strength is the willingness to experiment to deliver new features in addition to their focus on the customer experience and collaboration with the customer.  You could say that Amazon reshaped the retail omni market into an image that meets their culture and their willingness to experiment, and most importantly to fail in the experiment, helps them to continuously reshape and redefine their relationship with consumers and their ability to meet consumer demands.  

This is the disruption in the omni market; the willingness to experiment and the speed of change, that requires the large retailers to change or die.  The current strategy to meet market demands through acquisition will allow the smart retailers to buy time to change their culture, essentially reinventing themselves into a new entity based on collaboration and quick delivery.  The next few years will be interesting as the omni market defines retail and the retailers in the market, there will be more failures as the large retailers struggle with the reinvention.

And now for the audience participation portion of the show…

ECommerce will have wide ranging impacts on both the retail and manufacturing sectors.  How can you focus these abilities to improve the consumer's experience?  Improving the consumer’s experience will require a re-evaluation of the sales channels, the manufacturing channels and practices and the supply chain channels and practices from the raw materials to the consumers’ homes.  In order to ensure and maintain success in this new reality you must harness the tools and capabilities in many new areas.  How can you support these continuously changing requirements?