By Daniel R. Schnaider, Wisefy General Dwight D. Eisenhower, a military leader and the 34th President of the United States, once said: "It will not be difficult to prove that battles, campaigns, and even wars have been won or lost primarily because of logistics." But how can we translate this into business?
Tim Cook, CEO of Apple and recognized for his supply chain expertise before becoming the executive director of the tech giant, emphasized: "You can have the best idea in the world, but if you can't get it to market, you have nothing. The supply chain is everything."
Jeff Bezos, founder of Amazon, highlighted the importance of logistical efficiency for e-commerce success: "We need to innovate and optimize our logistics and supply chain to continue surprising and satisfying our customers."
These statements prove the importance that great military leaders, executives, and entrepreneurs place on logistics. So, why do some companies fail to translate this differentiator into concrete actions?
In today's frenetic world, where time is scarce in society, the solution lies within the logistics chain itself. As an example, many of us pay dynamic pricing when ordering a ride-share during peak hours, last-minute airline tickets, fast delivery on food and e-commerce apps. This, in my opinion, serves to prove the thesis that customers are not just interested in the product or service, but in a complete experience.
Possibly, the first problem companies face by not treating the chain as something strategic is related to how they manage the product area. Since companies are organized in silos, the product area has little influence over other departments, including the company's operational area, responsible for inbound and outbound logistics. The result is that the mere objective is the delivery of the product and service (cost), but not as a source of strategic differentiation, revenue, and profitability (value).
The second point we can highlight is related to the necessary investment in technology to make the chain truly strategic. Declaring the supply chain as a strategic asset of the company, without visibility of the network as a whole and quality real-time data, is contradictory in terms. Manual processes are substantially inefficient compared to recommendations from artificial intelligence, which can reduce costs and make the chain more competitive through autonomous management.
Even the most automated companies in the world still depend on humans to perform fundamental functions. This brings us to our third point, training, and culture. Consider the possible paradigm shift between two hypothetical companies. a) “We closed the sale for customer XPTO, send the order for operations to carry out the delivery.” b) CEO to the product area - “Look at what changes we can make in areas related to the supply chain to increase sales, profitability, and customer satisfaction (measured by repeat purchases and referrals).” The result is the delivery of the product, service, or collection of the input; however, the method of execution differs in maximizing value to the customer.
The fourth and last point is in a robust network of partners. Chains require interaction with various suppliers at different times and places. Your price, product quality, delivery time can be linked to the suppliers in your chain. For example: a truck returning empty from a delivery can offer a more attractive price compared to another supplier contracted specifically for a single stretch. Sending eggs, dishes, or glass through potholed roads compromises the quality of the product delivered to your customer, as well as systemic delays compromise your brand, generate fines, and loss of credibility.
Many companies look for new products, others look for new territories to expand, conduct campaigns and promotions to increase sales, invest in marketing and public relations; all legitimate actions. However, sometimes the differentiator the company needs to maximize its value to shareholders is much simpler. Treat the supply chain as an integral part of your product, the experience you want for your final customer.
Recognizing and valuing the supply chain as an essential component not only optimizes operations but redefines value delivery, transforming it into the silent differentiator that distinguishes market leaders.
Comments