Omni Supply Chain

It seems to me that supply chain is being driven towards an omni supply chain model where the capabilities are available to deliver to the endpoint customer any time and through multiple methods and customer selected delivery points.  I see this as another opportunity for millennials to open the door to the possibilities and demands to fit into their lifestyles.  This is also a bigger issue in an urban area than in a suburban or rural area so the supply chain and finial carriers must have the ability to support multiple models for the delivery.  The consumer challenge now is for the supply chain to be knocked off-balance and forced to reevaluate their extended supply chain and especially the delivery model.  The bulk of the final delivery has been moving towards the parcel model now for a long time and I think the industry now may be at a tipping point that can be easily pushed by millennials to re-evaluate practices.

One of the most annoying carrier practices in my opinion is the ‘sorry we missed you’ post it note left by carriers.  This practice is especially prevalent in urban settings where there housing is more dense and the need to secure the package when delivering is highest.  This most annoying aspect of this issue is the differences between carriers and even between carrier drivers.  The most annoying experience for me was a FedEx delivery where the only notification of a failed delivery I received was from Amazon tracking and then the driver would not vary his delivery time to coincide with my request to drop the package at a local retailer that would accept the package for me.  This has left a very bad taste for me and it is so bad that now my only recourse for the FedEx delivery service is to have it sent to a local FedEx store where I can retrieve it.  

I bring this up because this is in my opinion the next frontier that will be confronted by consumers for change and carriers and retailers must take this into account.  Most last mile delivery carriers are providing consumers with capabilities and options to adjust the final delivery which is positive.  The end experience though needs to be improved and simplified.  Carriers are still focused on fitting the consumer demands into the actions that easily fit into the carrier’s own existing capabilities which does not take into account the consumer desires.  This is exactly the position that retailers held not so long ago and now you can see that these large retailers are struggling with retention and sales.  

I see another large shift in the horizon focused on consumer interactions with retailers, manufacturers and especially with carriers to adjust to meet the consumer lifestyle demands.  This will again be driven by the imagination of millennials and their comfort in technology and ability to use their imagination to mash up capabilities into new services.  These will be good times for manufacturers as they expand their reach into the marketplace and there will be a quickening of fallout for large retailers and major transportation carriers.

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?

Consumers In The Supply Chain

The supply chain historically has been focused on the marketplace and the support of the marketplace from the point of supplies to the point of delivery to the consumer.  Just as consumers have taken control of their shopping and purchasing capabilities in the retail marketplace they will also take control of the supply chain that supports their retail shopping and purchasing. Consumers, and millennials again will be driving these demands, will use social networking and mobile technology to reshape and build a supply chain that supports their demands and their lifestyle.  Retailers, manufacturers and transportation must learn from the lessons of social commerce changes to the retail marketplace in order to build the flexibility required to support the consumer social supply chain demands.

You see the beginnings of these changes with new services offered by carriers to redirect deliveries to a location at the convenience of the recipient and this is only the beginning.  There is no reason to think that millennials will be limited in their actions to the last mile delivery, and there is no reason to think that manufacturers and carriers will be any more nimble in their interactions with consumers than the large legacy retailers were.  In these areas the FedEx and the UPS stores may be at an advantage and the forefront to react to the changing demands of the consumers.  The USPS is also in a great position to meet changing consumer demands because they have postal locations across the nation and on top of that they deliver on Saturdays as well.  

I see the extended retail supply chain facing the same concerns as retailers, where they are focused on cost efficiencies and reductions to meet the demands of a very large and varied customer base, just as the large legacy retailers.  I think the large carriers, especially the ones providing the last mile delivery to consumers in the supply chain are heading towards a big shake-up as well.  This shake-up will be result again of millennials that will not accept the limitations of these carriers and demand new services and capabilities to meet their own lifestyles.  I also see Amazon again as a force for change in the retail supply chain driving new services and capabilities to create new demands and consumer expectations, just as they have done with retail shopping and purchasing practices.

I see the retail supply chain now focused on market share and cost containment, in the same manner as large retailers in the 80’s and 90’s, and the supply chain is heading for difficulty in support the changing market and demands of the extended supply chain partners.  There are three key catalyst areas for these changes; consumers, Amazon and manufacturers.  The manufacturers are beginning to come into the marketplace now and develop relationships with consumers in addition to retailers and this is another factor that will exert a greater influence on both the retail marketplace and the extended supply chain.

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?

Social Supply Chain

A social supply chain will be the natural result of social commerce and in fact will become another requirement to succeed in the retail marketplace.  As consumer demands increase in velocity and complexity retailers will quickly find out that a command and control structure cannot support these new demands.  Retailers will quickly find that they must collaborate with all partners in their supply chain in order to support consumer demands for social commerce.  The same capabilities and features that consumers are embracing to create the social commerce shopping marketplace should be incorporated by retailers and their extended supply chain to support and even extend the social commerce shopping.

Retailers require near real time status of all product delivery from the manufacturing plant to the consumer door and collaborative social interaction with the supply chain partners will allow the entire supply chain to interact and react to consumer demands in a manner that enhances the social commerce consumer practices.  This information should be shared with all partners across the extended supply chain, including the consumer to help to make informed shopping, purchasing and shipping decisions.  The retail supply chain extended partners have already begun extending the consumer relationship and the expanded and improved interaction developed in support of a social supply chain network will only enhance and improve those relationships.  This social supply chain network actually improves the retailer to consumer relationship and allows the retailer to act as a consumer advocate or consumer agent in the social supply chain.  This is similar to the practices of Amazon in providing a retail outlet for other smaller retailers and also act as an agent of the consumer with these third party retailers and even the transportation partners.

Retailers really must develop their social supply chain network as an extension in order to retain customers and enhance the consumer relationship.  This development of the social supply chain along with the retailer’s extended role and consumer relationships allow the retailer to extend their relationship with the consumer.  With changes and developments in the relationship and role of manufacturers in the retail marketplace, retailers must extend their relationship with consumers to provide interaction with the extended supply chain partners and capabilities.  Retailers must improve their relationships with consumers in order to retain consumer shopping and purchasing habits and provide the reason for consumers to return.  

Consumers have a great deal of choices in making a purchase, from legacy department stores, to online discounts, online retailers and even direct from the manufacturer.  Online retailers currently have a distinct advantage over the legacy retailer because they have focused on developing the online interaction and tools.  This advantage though would disappear though if legacy retailers and large brick and mortar retailers focused on delivering social commerce supported by a social supply chain to address consumer demands.  Legacy retailers must develop the experience that crosses channels and encourages the consumer to return for something other than a discounted price.  

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?