The mysteries of the supply chain have traditionally been invisible to consumers. Why should they understand – or even care about – the problems businesses solve each day to plan, procure, make, and deliver products right to their doors?
And yet today’s consumers are acutely aware of many supply chain issues. They just don’t use the same language as supply chain professionals.
Supply chain solves complex problems, and those of us who work in supply chain roles often talk about those problems in complex ways. We tackle global transportation with multi-modal logistics, extend early financing options to suppliers to ensure raw materials are there when needed, and we make advanced moves in manufacturing through postponement and mass customization.
The further we go into the technical details of supply chain, the harder it seems to relate the challenge to customers. But that’s not necessarily the case. Every now and then, you’ll find hints that customers understand supply chain better than ever. They’re just not using our words for it.
I found the words used to describe supply chain challenges were different than in the past at the recent Shoptalk Europe conference in Copenhagen. There, attendees were exploring how to reach, engage, and enlighten the customer wherever and whenever they might choose to shop – the ultimate goal for business operations and supply chain professionals. And as technology continues to smooth the seams of commerce, the lines between supply chain, stores, digital, and omnichannel have blurred. The only thing that matters is the customer at the center.
The last mile is close to home
One example of this evolution is Dutch grocery startup Picnic, which, in the words of founder Joris Beckers, has reinvented the milk man. Like the home delivery services of the past, Picnic focuses on the direct relationship between the service provider – in this case a delivery driver – and the customer. Picnic solves for the last mile not with stores or outsourced delivery services, but with a fleet of custom-designed electric trucks built for urban areas and driven by delivery people who consistently work the same route in the same neighborhood every day. That direct relationship is backed by technology that shows customers exactly when their order will arrive and where it is – from the distribution center to their front door – reinventing the role of the milk man. However, a supply chain practitioner might say, “The business won its customers on shipment visibility, real-time logistics data, personal relationship with a consistent driver, and the seamless integration of assortment, inventory, payments, and delivery.”
Cost and consistency matter to everyone
Dollar Shave Club (DSC) founder Michael Dubin shared his company’s plans to scale the business and expand overseas. In its rise from a modest subscription startup to a $1 billion business, Dollar Shave Club won its customers with a price and delivery scheme that gave customers greater transparency into the true costs of shaving and grooming products. The company built up a base of more than 4.25 million subscribers, all of whom care about receiving products from a low-cost supplier at consistent service levels and with an assortment tailored to their specific needs. To Dubin, DSC is as much a community as it is a business. One that grew because of its supply chain.
Sustainability is about showing your work
Customers also care how products are made. One example of customers pushing brands to show their supply chain complexion is H&M. The apparel industry is notorious for its waste, environmental impact, and treatment of workers, a fact that makes fast fashion a sensitive space. To help mitigate these concerns, H&M adopted practices like clothes recycling, annual sustainability reports, and product listings that go beyond price and description to also show where garments are made and what raw materials and processes go into them. Clear signs that customers care about the supply chain even if they don’t use the same words as we practitioners do to describe it.
The outcome is as important as the journey
Research has shown that 61% of millennial shoppers will switch brands because of some issue directly related to the supply chain, whether it’s quality, availability, how it treats its workers, or its impact on the environment. A growing consideration in a world where the biggest driver of loyalty has traditionally been has traditionally been customer service.
It’s worth remembering that supply chain can also be related in common terms, as a story of what went into the creation and delivery of a product, and the meaning it has to the all-important customer.
Perhaps the secret to making people care about the supply chain is not to talk about supply chain itself, but about the difference it makes in people’s lives.
Image credit - Supermarket shopper reads label on product © BillionPhotos.com - Fotolia.com