Back in the old days, most supply chains operated mostly on a forecast when it came to responding to demand. That means months of just slogging through data collected via the now questionable methods of narrow customer surveys and limited focus groups.
On the other hand, a business could still worry less about competitors once it had established a good portion of the market. It was easy to keep loyal customers mesmerised and it was harder for disruption to occur because those consumers had limited information on competitive products.
All of that changed once our Age of Information came in full swing. With 3 billion people now accessing the internet, today’s markets have become stormy seas as demand shifts at the proverbial speed of hurricane winds. Just when you think you have the best offer in the market, a customer on a search engine will find something that provides even more value. That something eventually ends up stealing more market share.
It’s safe to say that the old ways of sailing these waters are now tossed overboard.
How can a company hope push on at this point (assuming it even manages to stay afloat)? Well, for a lot of corporations, the overhaul can be long and painful. However, the first step is still important. The sooner you take it, the sooner you can achieve the agility your supply chain needs to meet volatile market demands.
Here are some strategies you ought to consider.
- Maximize SCM software solutions.
Transforming your traditional supply chain with a digital solution might sound like an ordeal but you will at least get faster access to shifting consumer trends. For example, if you run a chain of retail stores and want real-time data on sales, today’s SCM software can help you channel information from all your branches and share it across your supply chain network.
That is just the tip of the iceberg though. You could also use the same software to start the shift towards embracing online retail. There is a veritable gold mine of customer data from just the clicks they make browsing your site. Same data can go along way when informing other areas of your network.
Furthermore, the same technology also allows you to better manage information and sift out noise. It can help you identify the effects of marketing on the speedy sell of a product and whether if said product can really sell on its own merits.
- Accept that your customers are smarter than they seem.
Sometimes, instead of the perspective of big corporate, your best insight comes from the street level. This can be important if you feel like you are losing to a competitor who is winning out just by having products more affordable than yours.
It’s tempting to think that you can survive because you still have a loyal customer base that is willing to pay the price of your ‘quality product.’ However, that sort of thinking comes at a cost. The truth is cheapness can either mean bad quality or good value in the eyes of the customer.
Before, customers were limited in their ability to assess quality products. That made it easier for cheap and poor quality products to proliferate. But with more information circulating the web, this is no longer the case. In fact, one could argue that it is even unethical to assume a customer’s ignorance of quality and exploit it.
That is why it can be better to get back to basics and understand how a competitor is providing more value. Are they using a better, more affordable material? Is their business model allowing more budget friendly prices? What can you do to adapt? Sometimes it’s better to swallow the pride instilled in your brand and accept that your customers know more compared to 20 years ago.
- Consider an industry exit strategy.
If it really looks like you’re trying to sell horse carriages in an age of automobiles, then it might be time to formulate an exit strategy.
Ironically, one of the most famous examples is IBM: a company once famous for producing tabulating machines and old timekeepers in the 1800s. Now, it wears the new face of a large corporation for high-tech in big business (as well as even further advancement in artificial intelligence ala Watson).
It’s not going to be pretty. Many both inside your business and long-time customers outside it will feel a certain degree of loss. However, companies like IBM serve as proof that it is better to lose the weight of many underperforming products rather than let that weight sink your business.
Of equal importance, however, is that an exit strategy must come with a new direction for the supply chain. You might want to start considering new partners for the different direction you want to take your products.
To summarize it, the best way to infuse agility in your supply chain is to embrace the very elements that require it. This means embracing the same information technology that is empowering both your target market and your competitors. Because if you are too weighed down by the glory of the past, you will get sucked into the maelstrom of volatile demand.
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