An increasing number of companies seek to be “all things to all people.” Specifically what this means is that they are looking to lead on cost, customer service and product innovation. This blended customer focused supply chain management strategy could provide the flexibility needed to gain a key competitive advantage.
The following three trends aimed at achieving this goal were revealed in the 2011 Trends and Issues in Logistics and Transportation Study released at the CSCMP conference in Philadelphia.
Segmented supply chains
According to the 2011 study, firms responding to the survey had an average of more than three unique supply chains. Why so many different ways to deliver the product to the end user?
Almost 51% of the 700 firms in the survey indicated they had moved from a focused competitive strategy to an attempt to be “all things to all people.” Since firms adopting this approach had the highest average number of supply chains, one obvious conclusion would be the various supply chains enable a company to focus on different strategies in different segments. One supply chain may focus on cost leadership while another is aimed at customer service.
Shortened and more complex product lifecycles
The need to rapidly develop and introduce innovative products without jeopardizing existing products has complicated the product life cycle management process. Companies are adapting by sharing common operations, components or materials between product lines to maximize infrastructure investment and leverage purchasing costs from suppliers. By shortening product development, overlapping product life cycles and keeping costs down, a company can be perceived as an effective innovator.
Customers as stakeholders in the S&OP process
Perhaps the fastest-growing trend is the involvement of key customers in the Sales and Operations Planning process. Involving these critical stakeholders in the S&OP process makes for more accurate forecasts of customer demands. Better information leads to better decisions.
Customer involvement leads to improved product life cycle management, enhanced product marketing, and greater inventory management. In turn, these lead to improved profitability.
Conclusion
By creating segmented supply chains, adapting products to more efficiently utilize existing supply chains, and involving key customers in the S&OP process firms are increasing applying customer focused supply chain management strategies to gain a key competitive advantage. NEI’s employs these strategies to achieve the ultimate goal of having the right product, at the right time in the right place. Contact NEI to better understand how we can ease in-geo manufacturing, deployment logistics and support challenges.