The New Answer To ‘How To Keep Customers Happy’: Positive Disruptions In The Supply Chain

For businesses, the very idea that disorder can lead to growth and movement is unthinkable. However, could it be possible that there are business models that gain from chaos and disruption? Is this kind of positive evolution achievable by any and every business, and under all circumstances?

Think of this radical concept: An antifragile entity looks for disruption because that is where it can grow best.

Each day, as businesses strive and struggle to serve consumers better as a means of gaining market share, we are left in no doubt that we need to transform our existing processes. And positive disruption is one way to do just that with our supply chains.

I’ll put it this way- positive disruption is already happening. In this piece, I discuss a few ways by which the traditional idea of supply chain management is changing and evolving to keep up with the times.

SaaS In Retail Management

Software as a Service (Saas) has replaced nearly every software application we have known in our lifetime. The G Suite is basically all of Microsoft Office, with a few added perks. The icing on the cake is it doesn’t need installation, a key and a licensed proof of purchase. There are several advantages of running an application much like a service- it is available everywhere, it doesn’t take up disk space and it keeps the business operations transparent.

In retail management, SaaS and the availability of multiple channels to sell across have evolved alongside each other. Today, spreadsheets are no longer the go-to choice for inventory handling and calculation. Software products have the ability to track sales in real-time and adjust inventory accordingly. Being machines, they can do this every single minute of every single day.

Retailers who adapt to such retail management practices and don’t shy away from going digital gain better insights into their business and achieve higher consumer satisfaction, as they don’t run out of stock due to oversight. They hold inventory at levels that are just optimal, to prevent extreme scenarios such as stock-out or dead stock.

Take a step back in the chain, and you see some retail management products giving you the option to automate the raising of purchase orders based on sales trends across channels. In the end, the consumer benefits from speedy order processing and seamless fulfillment, thus building brand trust and loyalty.

Crowdsourcing the Warehouse

You’ve got to hand it to Amazon to do something others can only dream of. At the beginning of this decade, Amazon had what most small businessmen cannot hope for- extensive warehouse space and impeccable logistics. So it did what no other marketplace has done before, or since. It opened its doors to those retailers and gave them access to sophisticated practices. Amazon knew that small-scale retailers wouldn’t be able to do this by themselves, and so it charged them a fee for using its services.

The takeaway from this? Money spent must offer instant gratification. By using this little insight into the human mind, Amazon today truly sells products from A to Z, by crowdsourcing them from other retailers and working on what it does best- fast delivery.

I think this behemoth is the perfect example of antifragility. When it came to the question of putting all that space to use, Amazon could have chosen to invest in inventory as well. Instead, it made others invest in its inventory and even claimed a fee for this investment.

What do retailers get? The Amazon Prime advantage in some cases, and visibility in others. Consumers get the secure feeling of shopping from a known brand and, thus, drive more sales to the marketplace.

Evolving Automation

The Industrial Revolution is considered a revolution because it was the first large-scale use of automation to achieve more than humans ever could. I think the next revolution will be digital in nature. With Machine Learning and AI taking center stage, we can look forward to hitherto unknown forms of automation that can disrupt our understanding of the supply chain.

We already have systems that can raise automated purchase orders. On the vendor/ manufacturer side, we may have systems that can ‘read’ these orders, look to past ordering trends, and if the order in question is consistent with past data, send it into production/ dispatch.

In other words, there may be no need for human intervention for basic decision-making, which is often responsible for most of the hold-ups in a supply chain.

Since the manpower involvement is greatly reduced, the end product cost may be much lesser than what it is now. In a distinct advantage to consumers without loss of profit for sellers, we may see expensive products categories become more affordable and easily available.

New-Age Enterprise Resource Planning

The emergence of SaaS and APIs has given software products a chance to communicate with each other seamlessly. This is why integrations are the future of all businesses that depend on their supply chains.

A typical ERP system today can also be integrated with a CAD and a product lifecycle management system. An inventory management product can have accounting and shipping features integrated into it. The best part is that each of these services is never built from scratch. For example, an ERP solution can also find a way to integrate with financial service modules such as SAP S/4HANA so as to achieve complete consolidation of financial data and enable the evaluation of financial implications of a certain decision.

For a fraction of the price, businesses now have access to the best services in each domain. All of these digital personas work together with the same intuition as a human system and the efficiency that only machines can achieve.

Improved efficiency across the organization in the form of a highly robust supply chain directly translates to improved consumer experience- either due to the speed of processing or due to the reduction in errors and uncertainties, or both.

Now, more than ever, businesses need to consider how best they can adapt to changing conditions. It isn’t enough anymore to just do it because everyone else is, but to be the first in the line, such that with every new development, there is more scope to grow as an enterprise.

Every business that hopes to thrive in today’s market must ask the question, “Where do we go next?” Becoming antifragile may just be the answer.

Twitter – @irfantalks