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Supply Chains Run On Brains, Heart and Soul

Supply Chains Run On Brains, Heart and SoulWhen you think soul, what comes to mind? For me it's the Queen of Soul, Aretha Franklin — but there's another contender who's giving Aretha a run for her money. Supply chains probably aren't the first thing you think of when you hear the word soul. But the supply chains that lead today are run with a combination of brains, heart and yes, soul. And this combination is exactly what it takes to drive future success for companies who compete on the basis of their supply chains in ever faster moving markets. Let’s take a look at some outstanding examples.

Supply Chain Brain: Making Supply Chains Smarter

From “farm-to-fork,” “biotin-to-beauty” or “cotton-to-clothes,” we depend on supply chains to transform raw ingredients and components into products, and then deliver what we want, when we want it. Supply chain “brains” in the form of technology software and hardware are becoming increasingly important to meet consumer demand and deliver the “perfect order.”

Every year, technology analyst firm Gartner recognizes its Top 25 Supply Chain companies that “best exemplify the demand-driven ideal for today's supply chain.” Past top 25 companies range fom McDonald's and Walmart to Johnson & Johnson and Unilever. The Gartner top 25 list provides best practices that can be emulated and over time, those practices have spread well beyond the list.

Business Process Management (BPM) technology helps knowledge workers make smarter decisions not just about physical flows, but also about the financial flows over the supply chain. In some instances, technology can be applied to replace humans in the supply chain and in others technology can be used to make the human element in the supply chain that much smarter. Both approaches help ensure products can continue to flow cost effectively to the customer point of sale and ultimately to the consumer.

For example, Revlon was struggling to keep up with the workload of its high volume retailer claims. The financial impact was significant with chargebacks amounting to 20 percent of gross revenues. Credit claims processors were overburdened and were often unable to review claims or contest them if appropriate. The document collection process by itself took 30 minutes on average per claim. After implementing its case management solution, Revlon reduced processing time by two-thirds, giving the company the opportunity to process all claims at a net reduction of employee time of over 50 percent.

Zappos is perhaps best known for their very cool customer service, but it is automation in their supply chain that helps them ensure they can deliver on their “wowful happiness” brand promise to the consumer. Zappos has implemented an advanced supply chain system in their warehouse operations from vendor Kiva Systems. At the risk of being called a supply chain geek — you've got to check out these cool robot pickers!

As supply chain experts realize, a technology advantage in your warehouse gives you a cost advantage over your competitors, and also a speed advantage on the delivery side. This proved so important that ultimately Amazon, who acquired Zappos, also acquired Kiva. A telling stat: Using its non-Kiva-enabled order management processes, Zappos.com can fulfill an order in as little time as 48 minutes or as long as three and a half hours. With the Kiva system: 12 minutes, every time.

Supply Chain Heart: Focusing on the Customer

Companies like Zappos focus on the connection of its brand with the customer, and to do this means better understanding of buyer behavior and motivations. That means getting to the heart of not just what they are thinking but what they are feeling. And in turn, it means acting on what they learn from the customer, integrating sensing capability into the core of the experience and the supply chain.

Fast moving consumer goods and the big brand retailers who present them to the target customer are especially interested in developing their supply chain “heart.” A top company is distinguished by its ability to efficiently produce and deliver the items that are in highest demand by consumers, while developing loyalty and trust towards the brands.

 

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