The beauty of the supply chain is all around us. As consumers, we experience the end result of our day jobs in our everyday life. When you live and breathe your profession, it is tough to separate it from your life. I guess I’m a supply chain junkie…can’t get enough of it. And I’m sure that many of you can relate, whether you want to admit it or not.
There are tons of articles, white papers and blogs about today’s supply chain challenges: globalization, off-shore manufacturing, supply chain segmentation, big data, mobility, social media, price optimization, warehouse throughput, labor scheduling and in-store picking. These are requirements for an omni-channel world and satisfying consumer demand. So rather than write another one, I thought it would be interesting to look at this omni-channel world in a daily life setting, but viewed from a supply chain junkie’s perspective. How many of these confessions can you relate to?
Confession #1: You call out cashiers when they don’t individually scan each product.
This is probably my biggest pet peeve when shopping. We all know how many issues it causes when the advertised promotion states all Pepsi 12 packs on sale at four for $12. You pick up two Pepsi, 1 diet-Pepsi and one Mountain Dew and put them in your shopping cart. The cashier, trying to be helpful, says not to worry about scanning them all. He picks one, scans it and enters a quantity of four. At this point my heart drops, I tense up and try to hold back from saying something. But this young man needs to understand how he is totally disrupting the entire supply chain when he does this. So I speak out, trying to explain that the next forecast and replenishment order will be totally off. While I certainly felt better about doing my part to ensure a smooth supply chain, I thoroughly confused this young man as he handed me my receipt. One day he’ll understand the importance of demand forecast accuracy to have what you want on the shelf when you want it. Sigh.
Confession #2: You have a listing of the markdown strategies of key retailers.
Guilty! We all talk about markdown optimization and the importance of depleting inventory with the right markdown strategy to maximize profits. However, savvy bargain hunters take note of these strategies. I very quickly noticed when one of my favorite retailers switched their markdown strategies from a 30-50-70-90 strategy to a 25-50-75 strategy. I can’t argue that this retailer is indeed capturing some extra profits as I will now buy that clearance merchandise at 25% or 50% off instead of waiting for the 70% or 90%, but now I had to update my cheat sheet for this new strategy. Promotions and markdowns definitely play a role in consumer expectations, brand loyalty and understanding that demand helps companies properly plan their pricing, getting the most out of my purse that they can.
Confession #3: The pride you feel when your child uses the terms “in-stock” and “out of stock”.
As a parent of three, I always had a sense of pride when they accomplished certain “firsts” in their lives: first words, first steps, first day of school, first lost tooth. As a supply chain mom, I will add to this list the first time my son used the term “out of stock.” Ah, the pride, and I couldn’t hide the smile on my face! My eleven year old son gets supply chain!! It didn’t matter that it was used under the context of, “Mom, we’re out of stock on Gatorade!” Just like my son, all consumers demand an exceptional experience. The root of this experience revolves around the basic concepts of supply chain management: having the right product, in the right place at the right time at the right price. Of course, the concepts of exceptional experience extend beyond that to include everything from online order tracking, free shipping, smooth returns, and personalization opportunities, but we still need to get the basics right. As a parent, I am happy to pass along certain traits, skills, foundational morals, and a baseline supply chain background.
Confession #4: While placing an order online, you argue with your spouse about paying for three-day shipping when you know there are local stores nearby that will likely be fulfilling your order under the free 7 day option.
I will admit that I have always been a Black Friday shopper—up at 4am for the early bird deals. But over the past few years, I’ve instead placed my orders online in the comfort of my home. Rarely, if ever, do I pay for any type of expedited shipping and I have imparted that same mentality to my husband. Even as I write this, one of my free shipping packages that was expected on 12/2/14 arrived on 11/29/14, only two days after it was ordered. Consumers are getting smarter about paying for shipping. The shipping for this item via FedEx likely cost more than the item itself, which was only $10.99. As a smart consumer I’m happy about this, but unfortunately for this retailer, it is not a sustainable business model. Retailers need to get smarter about their sourcing and shipping, ensuring that the consumer orders they fulfill are as profitable as they can be.
Confession #5: While carpooling half of the boys U11 basketball team, you organize each child in the SUV based upon a multi-stop route that has been optimized for efficiency.
If you have kids, you can relate to this one. Carpooling is one of the best efficiencies for busy parents. Not only does it lower the number of times you have to go to/from any activity, but you also get the opportunity to plan a route map that ensures pick-up and drop offs, as well as child placement in the SUV, are optimized for the highest efficiency! Josh and Joey are in the same neighborhood while Aiden and Thomas are along the way to the field. You consider the weight of each child along with other transportation considerations where you can’t ship, er transport, certain characteristics close to one another. Keep Aiden away from Joey; Aiden gets the third row back right seat while Joey is second row far left. Isn’t it great to have everyday situations like carpooling provide great opportunities for optimization?!
Beyond carpooling, of course, transportation plays a vital role in the daily activities of delivering an omni-channel experience. As transportation systems become more item-aware, we can achieve higher levels of efficiency when building loads, ensuring that when they are unloaded at the warehouse, the efficiency flows through to maximize throughput.
The Future is Bright
While we all put a twist on everyday life based upon our day jobs, they are forever getting more intermingled with opportunities to partake in supply chain excellence in an omni-channel world. But the future is bright for supply chain professionals, for consumers and for companies as they all intertwine to enhance the experience of that omni-channel environment.
So, are you a supply chain junkie too? What is your secret supply chain confession? . #supplychainconfession