E-BOOKS ON E-COMMERCE AND SUPPLY CHAIN MANAGEMENT

LTD Management has 2 e-books on Supply Chain Management and e-commerce. If you would like to receive copies, please email to tomc@ltdmgmt.com   Retailers Manufacturers Grocers 3PLs CPG FMCG BTS BTO

TWO TAKES ON SUPPLY CHAIN MANAGEMENT

Two takes on end-to-end Supply Chain. One is upstream & downstream. Two is inside the 4 walls & outside the 4 walls. Where do your process & technology have the greater problems? What are you doing about them? Retailer. Manufacturer. Grocer.

BLOCKCHAIN VS TRADITIONAL TRADE

How does blockchain work with traditional Trade, Incoterms, Letter Of Credit, Bill Of Lading, Customs, Banking, Logistics, Export Declaration, Certificate Of Origin? And more. Tradition vs technology. Product SCM & Finance Supply Chain

E-BOOKS ON SUPPLY CHAIN MANAGEMENT AND E-COMMERCE

LTD Management has 2 e-books on Supply Chain Management and e-commerce. If you would like to receive copies, please email to tomc@ltdmgmt.com Retailers Manufacturers Grocers 3PLs CPG FMCG BTS BTO

RETAIL RISK

Which is the riskier retail strategy? Collaborating to help Amazon in order to gain store traffic? Or, doing little except a weak e-commerce program that does not compete against Amazon? And in neither, transforming your Supply Chain as needed.

VALUE STREAM MAPPING AND SUPPLY CHAIN VELOCITY

Retailers. Manufacturers. Value Stream Mapping is a good tool to see excess time in Supply Chains, especially the import side. To build end-to-end Supply Chain Velocity. VSM Lean. Value Stream Mapping

SMEs, EXCEL, AND SUPPLY CHAIN MANAGEMENT

SME manufacturers & retailers. Even if your technology is Excel, you can step up managing your Supply Chain performance with customer orders and purchase orders data. Look at it differently. From the SCM view, not accounting. Cheers.

CHALLENGE FOR RETAIL, GROCERY, AND LOGISTICS

The challenge for retail, grocery, CPG FMCG manufacturing & logistics is to adapt to what is happening. Defining their role. Is it stores or the service to customers? Is it logistics or how to move & handle products/inventory with speed across end-to-end Supply Chains.

IoT AND THE DIRECTION OF SUPPLY CHAIN MANAGEMENT AND LOGISTICS

The direction of Supply Chain Management is SmartSCM. The direction of logistics is SmartLogistics. Think IoT to manage Supply Chains and logistics operations/networks. Retail Grocery Manufacturing CPG FMCG BTS BTO Ocean Transport Forwarding Warehousing

RISK TO ASSET LITE LOGISTICS PROVIDERS

Asset logistics providers have much data that, with the right algorithms, can improve their business & position them into new or expanded services, including end-to-end. Moving to new/expanded creates risk to existing providers, especially asset-lite, including 3PLs. Strategy for asset-lite firms?

RETAILERS AND POINT OF NO RETURN

With Q1 financials, continuing store closures, & the trending of store vs E-commerce sales, the difference between omnichannel leaders & laggards is becoming clear. Are many retailers reaching the point of no return to transforming, including strategic SCM. No quick fixes.

CPG FMCG MANUFACTURERS AND STATUS OF RETAIL CUSTOMERS

CPG FMCG manufacturers, Q1 financials, store closings, trending store sales vs e-commerce show more retail chaos--may be past disruption. What are you doing to protect your interests? Stand pat with business as usual? Or be aggressive? Requires end-to-end SCM velocity.

OPPORTUNITY FOR LOGISTICS PROVIDERS TO REDEFINE THEMSELVES

E-commerce omnichannel is redefining the role of #-logistics in end-to-end Supply Chain velocity. That role also includes bringing it inhouse/Reverse Outsourcing. Opportunity for providers to move from commodity status. Retail Last Mile Transport Warehousing Manufacturing

12,000 STORE CLOSINGS IN 2019

Now potential 12,000 store closings. Call it Retail Apocalyse or retail realignment. Central theme is retailers with no strong omnichannel programs driven by strategic, end-to-end Supply Chain velocity. When will they learn? MaNufacturers? CPG FMCG

https://www.retaildive.com/news/coresight-12k-stores-could-shutter-in-2019/555130/

LEAN AND SUPPLY CHAIN VELOCITY

Implicit to Supply Chain velocity is lean SCM, especially outside the 4 walls, the international/upstream/inbound segment. Reduce the Lean Waste of excess time & inventory for speed, which is the real competition. Retailers Manufacturers BTO BTS CPG FMCG

GROCERY SUPPLY CHAIN MANAGEMENT AND TRANSFORMATION

Grocers have two supply chains that are challenged by omnichannel--store and e-commerce--that demands high customer service. It requires Supply Chain transformation.

GROCERY SUPPLY CHAINS

--Comments to Challenge the Status Quo--

Grocery chains across the world have common issues with what is happening to their industry. Against that, there seems to be a common fear of change--better the devil you know--especially against investors. Then there is the question of how to change--since there are no quick fix, easy answers that many seek.

The challenge being faced has its roots with Amazon.  Amazon did not create e-commerce. What they did was build a Blue Ocean strategy that used it to redefine retailing and to redefine supply chain management (SCM).  They created and met customer expectations with order delivery velocity.  They weaponized SCM and elevated it to strategic.  

Here are three comments--and they revolve around grocery supply chain management.  First, grocers have two supply chains that hopefully come together at the store level. One supply chain is under the control of the grocer and runs through their end-to-end SCM operation.  The other is managed by suppliers-—a type of third party in the supply chain--who stock/restock shelves with their products. 

Adding complexity to this supply chain structure is the need to successfully drive performance across channels.  It is no longer just about stores and inventory.  It is about customers and how to serve them both in-store and online.  And that requires supply chains with end-to-end velocity to be responsive.

Second, e-commerce has highlighted a flaw in that design and operation. Namely, the two supply chains are not coordinated and managed together as one supply chain with two origins.  This compounds problems with omnichannel customer service.  It shows with stock outs--a customer service failure.  These failures reflect on Perfect Order performance, both with customer orders and with store restock.  Online now brings grocery supply chains into the omnichannel reality using what is now an outdated supply chain management. 

Three involves how well the C-suite understands supply chain management and its operations.  That brings us to the new reality of doing business where customers have the power.  They need to start to transform. Omnichannel success is driven by supply chain management.  It is now strategic.  And it is now about speed, the new competition.

Grocers, if there are supply chain issues, then have to define the problem before a solution can be defined.  This requires starting  with an assessment of their present dual supply chains and they perform.  

The new selling reality is about velocity--end-to-end supply chain velocity that drives inventory velocity required for order delivery/restock velocity.  This is a mandatory part of customer expectations.  Speed is the competition when it comes to customer focus and customer satisfaction in all channels.  Slow and steady does not win the race.

Executives must understand that the times they are a changin. It is about transformation and creating robust omnichannel approaches that recognize each channel's success is driven by supply chain management.  The alternative may be to watch their futures in rear-view mirrors.  Delay, playing it too safe, is not an option.

INVENTORY OPTIMIZATION

Is Inventory Optimization an outdated term in a time of dynamic omnichannel, network design, & end-to-end Supply Chain velocity that drives inventory velocity for Order Delivery speed? Retailers. Manufacturers. Grocers. CPG FMCG BTS BTO SCM

STOCK OUTS ARE SERVICE FAILURES

From customer view, Stock Outs, even "temporary", are service failures. Both store & e-commerce. What are you doing? What are your suppliers doing? Need to assess & transform end-to-end Supply Chain.  Retailer. Grocer. Manufacturer. CPG. FMCG. BTS.

SUPPLY CHAIN ASSESSMENT

Retailers. Grocers. Manufacturers. If your Supply Chain is a problem, how do you develop a solution when you have not defined the problem. Assess your end-to-end Supply Chain. SCM CPG FMCG BTO BTS

STOCK OUTS ARE SERIOUS CUSTOMER ISSUE, IN-STORE AND E-COMMERCE

Retailers. Grocers. Stock outs are signs of omnichannel service problems & of the need to transform your end-to-end Supply Chain. Failure for Customer Expectations. How do you fulfill e-commerce, whether in-store or warehouse for required Perfect Order?

RISK OF LOGISTICS MIDDLEMAN

In the new reality of Supply Chain velocity, what is the #risk & role of being a 3PL / logistics middleman? Disintermediation? Being leapt by new competition and ways focused on SCM? More? Need for strategy!

BREAK UP AMAZON'S LOGISTICS

Those advocating that the logistics be spun off Amazon through regulatory action. Not a strong legal case. Is it attacking the firm that is taking control of its logistics to create more end-to-end Supply Chain Velocity? This instead of transforming their services?  Instead of Strategy!

CONTINUING TRADE WAR ON RETAILERS, MANUFACTURERS, AND SUPPLY CHAINS

Trade War. Retailers & Manufacturers facing realities of how & where to position forward-buying inventory, dealing with seasonal changes, draw downs of products, Bull Whip Effect, supply chain chaos, and more. Domino effect on ocean & air shipping. CPG FMCG BTO BTS


https://www.wsj.com/articles/trade-battle-looks-set-to-impact-container-shipping-11557871536?mod=djemlogistics_h

STRATEGY FOR 3PLs AND LOGISTICS PROVIDERS

Strategy for 3PLs & Logistics Providers. Including planning and execution. The current pace of disruption will not be kind to laggards. Transformation without strategy can be a frustrating effort.

3PLs and LOGISTICS PROVIDERS

--Strategy in a Time of Disruption and Transformation--

What Is Happening.  Logistics is a commodity business.  3PLs and logistics service providers are dealing with significant industry disruption.  It comes from two fronts. One disruptor is external, customer generated.  This is the e-commerce speed of order delivery that is increasing and growing across industries and markets. The focus is on the end-to-end supply chain and how to make goods move across it more quickly—supply chain velocity with its inventory velocity and order delivery/restock velocity. 

That is a change from logistics being the dominant emphasis in supply chain management.  This could redefine, for example, the 3PL niche to 3PSCM—or SCMaaS (Supply Chain Management as a Service). 

Two, another disruption comes from within the field.  Technology is adding new requirements, new ways, to what firms must do, from digitalization to blockchain.  It is also developing new competition who use technology, including platform businesses.  Also, logistics providers in a niche are expanding their reach into other niches.

There is also the dual use disruptor, shippers who are taking control of their logistics and bringing activities inhouse.  Think of it as a type of reverse outsourcing.  In turn, such dual-use actions could mean shippers taking their logistics capabilities to outside retailers and manufacturers—and taking business away from present logistics providers and 3PLs based on proven end-to-end supply chain results.

The results of the disruptions are threats to these firms, including disintermediation.  At the same time, it is opening new opportunities.  Against the perception that logistics is a commodity business, the challenge is how to adapt and to transform.

This reasons questions on what a firm should do, in what context is should be a service, and how to differentiate it.  It is about strategy.  Some say it is being agile, which often means doing something the firm was not designed to do or is within their operations capability. Agile is not a substitute for transformation and strategy.

Strategy.  First, digital is not a strategy. With technology, it is a topic of it enables and is utilized in the business.

That said, the discussion can advance.  All logistics providers—3PLs, transport, forwarders, warehouses, logistics centers, ports and other--and whether they are asset based or non-asset based--should have a strategy.  The strategy identifies challenges, issues and risks with markets and their dynamics; and, going forward, can set the direction where the company is going for new markets and new business and customers to grow sales and profits.

A strategy does not have to be long-term.  Given the rate of disruption and change, five years or less is a good time frame.

Surprisingly, despite the purpose and benefit, many service providers do not have a viable, current strategy.  Instead they view developing one as too much work, react to what customers ask or what competitors are doing, or have one that is outdated.  In a way, they letting business vagaries drive their direction and future.  Having no strategy can be a risky approach, especially if competitors, established and the potential new entrants, have a well-done strategy and especially given the reality of global economic change. 

The strategy can be operations focused or it can be a significant change, to transform the company.  Which strategy is developed can be based on and reflect risks for the business or for the service sector, competition, or changing customer and/or market segments.

There are two parts to a successful strategy—first, developing it and second, executing it.  Developing a strategy comes from serious, formal strategic planning process.  It involves a blend of financial and non-financial objectives.  The plan should also focus on the present business, and how it will adapt to the future and new services and opportunities.  It identifies where the company is going--and where it is not going-- and what it takes to succeed in that service arena.

            Planning.  The starting point is where the business is now as to present dynamics with trends, markets, services, and customers; value proposition, and competitive positioning, coupled with sales and profits.  At any stage of the planning process, at the minimum, a SWOT (Strengths, Weaknesses, Opportunities, and Threats) is useful for the present and potential future scenarios. 

Planning contains mistakes that can limit the ability to develop a worthwhile strategic plan.  Some of the shortcomings that can lead to a bad strategy include:

ü  Firms only go out one to three years with the plan.  While that span is easier to deal with than looking out five years or so, that is based too much on what has happened, miss-assumes what will happen, over-assumes the company’s position in that future trend and is not strategic.  It is more like a budget or extended sales plan. 

ü  As a corollary to the short-span view, companies confuse goals with strategies.  Increasing sales or reducing costs by a certain percent is a goal, not a strategy.

ü  Providers try to mimic what a competitor is doing, especially if it is new.  That is not a strategy.  A good strategy separates the business from the competition.  Emulating competitors or chasing the next new logistics service is a short-sighted approach that often lacks understanding of market niches, operational nuances and value proposition. 

ü  Companies stay with what they are familiar with, their comfort zone.  This can be a myopic bias against performing the diligent planning analysis that is necessary.

ü  It does not identify and address hard questions and challenges, such as how sustainable the present business approach and operations model are.  That negates the concepts of strategy and of planning.  

ü  Planning is not rigorous and does not adequately assess both external and internal factors.  Internal analysis does not get the rigorous attention it should get.  Diligent self-assessment is required, but it can be difficult.  Overestimating abilities and underestimating problems short-circuit any serious planning.

ü  Companies oversimplify trends, especially global ones, and their impact on future business.  They let the past dictate too much of what will happen, even against the dynamic and changing global business world.  Firms do not comprehensively deal with uncertainty and look at “what if” scenarios.  It is a dismissive approach based on the past.  Change, with its speed with competitors and markets, is more than local; it is global.

ü  Businesses create a wish list of strategies.  Aggregating a catalog of possible ideas, no matter how worthwhile, is not strategic planning.  The effort dictates potential strategic choices be culled and prioritized and that hard decisions must be made on what to do.

ü  Service providers do not scrutinize how well the strategy positions the service offering to the dynamics of global economic and business forces.  They also overestimate potential competitive advantage—and underestimate its transiency-- that the firm may create with its strategic placement.

ü  Companies keep the planning within the C level and do not extend down to others who may have a better understanding of the present activity.  There is also an underlying assumption that what a company and its executives do are transferable to the future.  This lack of communication and buy-in with the planning often continues with attempts to execute the strategy—attempts that often fail.

     Execution.  Strategy implementation is critical.  The best strategy, without good execution, will struggle to succeed.  And the more dramatic the strategy is with scope and impact, the greater is the challenge for sound execution.  An operations strategy has an internal capabilities and requirements, perhaps best-in-class.  The significant change strategy has both internal and external requirements.  Each strategy carries different proficiencies to implement and creates challenges for present executives, managers and employees to have the skills to implement the strategy.

ü  Achieving the strategy separates planning for the sake of planning and planning needed to advance into the future.  It also demonstrates the conviction that the company has in the strategy. Executing the strategy means communicating the plan within the company and with stakeholders to build support—both operating and financial--and aligning the business with its strategy.  Adequate resources and defined responsibilities for execution are needed, along with corresponding, relevant metrics to track progress. 

ü  The transformation and its rate of implementation to carry out the strategy may require recognizing and dealing with the need for change management.  In reality, there are strong similarities between change management and successfully implementing a strategy.

ü  Tied to the grand strategy are underlying strategies and implementation plans for sales, pricing, marketing, positioning, operations and technology.  Logistics providers should recognize the life cycle to their services, especially with regard to profit maximization and the commodity service view of their offerings.  This service life cycle creates the need for the subset of strategies and fulfillment of them.  How people within the company grasp and execute these opportunities can have significant effect on long-term margins.

ü  While direction can come from the top level, carrying out the execution needs clear lines of responsibilities couple with a coordinated, cross functional effort by different groups within the company.  There can be no standalone activities for success.  It should be integrated.  The potential for assuming away the need for the collaboration can create unnecessary surprises and failure to gain all the market, operations and financial benefits of the strategy.

ü  Strategy planning and execution are not easy for logistics providers.  They are a challenge.  But as difficult as they are, doing nothing in the face of dynamic competitive and market changes can be dangerous for all stakeholders.  Logistics providers that do not plan well and implement well let events drive where they are going.  They do not control it.  These providers are market followers, not market leaders.  As a result, these firms do not transition to take full advantage of opportunities.  They miss out on market share, customers and profits that companies, who have a coordinated planning and strategy execution, earn and enjoy.

Conclusion.   The times they are a changing.  There is a new reality in supply chains, and as a result, in logistics.  Call it chaos or disruption. Talk adapting or transformation. 

Customers are doing more and expect more with the new reality they are dealing with. Business as usual is vanishing.  Established practices are being replaced.

There is risk in doing nothing.  The best path forward is to develop and execute a strategy.

https://www.ltdmgmt.com/strategy-in-a-time-of-disruption-and-transformation.php