Supply chain visibility and today’s IT-enabled consumer

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Greg Kefer, VP marketing, Infor

At the dawn of semiconductors in 1965, Intel’s Gordon Moore famously predicted that computing would dramatically increase in power – and decrease in relative cost – at an exponential pace for decades to come. This prediction is known as Moore’s Law and has largely continued in the 50 years since. Consumers now have more computing power in their pocket than NASA did when it put a man on the moon.

Technology has had a profound impact on all of our lives and has reached a point where it is not so much about computing power but what you do with it. But the machines we use to get through life today have blended. Tablets, laptops and phones all do essentially the same thing and they are all good at it.

What gets people excited today is not the newest gadget, but rather the new “gadget-enabled” services that we can take advantage of; such as ride sharing from Uber and accommodation sharing from Airbnb. Millennials do not use paper money, they use Venmo.

With billions of people walking around with powerful, web-connected mini computers in their pockets, the sky really is the limit. There are radically cool, new innovations just around the corner that will challenge established industries the same way iTunes changed the music industry, how Netflix wiped out Blockbuster, and how Uber is now making life miserable for taxi companies.

Supply Chain Excellence is More Important than Ever

For companies that make and sell products to consumers, there is one constant – the supply chain. Regardless of how people engage, learn, shop, order, pay, and review a product, the physical act of getting the right thing to the right place, as fast as possible, will not go away. Supply chain practitioners have been striving to get better, faster and cheaper for decades, but the bar has been raised.

Amazon has shown everyone what a next-level fulfillment operation needs to be, and it continues to invest heavily in its supply chain. Amazon was among the first companies to give consumers their own supply chain visibility solution that kept customers informed about their orders every step of the way. Many laugh at the drones, but when Amazon figures it out – when Prime+ and two hour delivery becomes an option—more companies will go out of business and the supply chain bar will rise again. Information and speed are now table stakes in the supply chain industry.

Supply chain visibility has always been at the top the IT wish list and over the past 20 years, the systems have matured tremendously. The advent of cloud computing broke down a number of barriers to getting vast global partner networks on the same information page, which has enabled new levels of collaboration and efficiency. The ability to see and control across all phases of the supply chain is central to enabling a company to satisfy today’s consumer.

The explosion of small, inexpensive devices such as smartphones, sensors, robots and GPS systems infuses a level of granularity into supply chain visibility “information packets,” which does two things. First, the operators of the supply chain use enhanced visibility to manage more effectively, avoiding costly disruptions, hitting their ETAs, and planning better. Second, and most importantly, the visibility information is being exposed to consumers who want their own visibility on their devices so they know when to expect deliveries. And they want it 24×7.

All Industries Must Adapt

This new supply chain operating paradigm is not just a retail issue. Automotive manufacturers will need to reimagine how cars are made and delivered; because if they do not make the experience spectacular, consumers may choose to forgo owning a car and just use an Uber-like autonomous car service to get around. In consumer products, brand loyalty will be impossible to maintain if consumers are no longer walking into the supermarket to grab their detergent from one of the 500 packages on the shelf.

If retail and product companies are forced to rethink how they make and deliver, their suppliers and their suppliers’ suppliers will need to reset as well. The fact is, today’s IT-enabled consumers are getting spoiled and will soon expect to be able to buy ANYTHING, get it their way, get it quickly, and pay less than they do today.

Supply chain consumes a huge part of a company’s annual revenue. In some industries, companies spend over 50 percent of their revenue on the making and shipping of goods. Supply chain visibility will be key to ensuring the new operational reality works, without spending even more to remain competitive. You cannot optimize if you cannot see.

 

 

 

 

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