Supply chains matter. The epic Australian battles between Coles and Woolworths have turned on customer demand and store efficiency. In New Zealand, the supply chain standout is The Warehouse. With Tindall’s bright red sheds dominating the landscape throughout 90’s. Starting as a single store in Wairau Road (where I bought a bike), the network now spans two shaky isles. That some companies can deliver shareholders extraordinary value while doing the ordinary things of selling groceries or banana lounges shows just how important supply chains are.
Supply chain and logistics are military terms. As far back as Alexander the Great, generals have known that wars can be won or lost by delivering supplies to the right place, at the right time. But supply chains are an evolution of logistics. Moving from the tactical to strategic.
Supply chains are now longer and deeper. Their scope extending from sourcing supplies to collecting customer payments. Because of digitisation, supply chains and customers have become more integrated. Customer wants are now anticipated ahead of time. Gentle coaxing at the checkout directs customers to buy things they didn’t know they needed. Vertical integration between upstream suppliers and downstream customers is becoming the supply chain standard.
Integrating customers into the supply chain relies on technology. For retailers, the holy grail is recognising an individual passing shopper. Knowing their buying habits and tastes. Changing the creative on shop displays as they walk by to entice them inside a store. Making wardrobe or recipe suggestions as they shop. And upselling them at the checkout. Giving the customer a better shopping experience while taking a larger share of their wallet
Achieving an integrated supply chain nirvana relies on trialling software solutions in model environments. Allowing businesses to adopt and enhance technologies that help them have happier customers, while quietly dropping those that didn’t work out. But with each new technology comes the need to manage more data across more connection points. The consequence, explosive data growth in B2B applications.
While telecom suppliers are pinging adolescents YouTube viewing habits (where 70% of data growth is) they’re adopting two strategies to cash in on business data growth. Incumbents offer a one-stop systems integrator approach. Meaning customers don’t need to leave them to access Over-The-Top applications and can buy advice from a brand they trust. New entrants offer a best-of-breed approach and often rely on a guerrilla approach of selling directly to early adopters before taking on an enterprise sale. Each approach though brings customers into companies supply chains through non-traditional communication technologies.
Managing the telecom category is now not just a matter of finding unused services, wrong tariff rates, and tendering every-other-year with the top 3 vendors. Getting 20% cost reductions from expense management and 5% to 10 % from sourcing isn’t enough. Telecom category management is now required to support services that evolve. From PSTN to VoIP, voice bridges to Virtual Meeting Rooms, free WIFI to ‘Minority Report’ style advertisements. Binding customers and staff with digital immediacy. Creating supplier variety and invoice complexity that a single supplier paradigm can’t manage.
The inevitable multi-supplier approach required by businesses to upsell customers with a real-time delivered wardrobe addition means that Telecom Expense Management is also evolving. Shifting from connections and usage to service and spend. And allowing businesses to form their own agile supplier networks to deliver solutions far more effectively than do-it-all giants.