It was an interesting conversation on Supply Chain fundamentals when somebody asked who can afford not to bother about their SCM at all. My thoughts suddenly turned to a savoury vendor in Chennai, who used to sell these awesome small onion samosas. The shop used to be near my wife’s house and those were our “authorized with permission” courtship days. Since I was very fond of them, my to-be father-in-law would always procure some of these delightful triangles in anticipation of my visits.
In due course, after the marriage, my stock inevitably declined and I was left to fend for myself as far as the purchase of those samosas were concerned. That is when I was struck by a most unusual phenomenon. The sale of these most sought after items started exactly at 5.45 every evening and would last till stocks last. That could be anywhere between 5.49 and 6.05! The most curious thing was that the shopkeeper did not bother to adjust his stocks at all to the obvious surging demand. All the SCM gyaan (theoretical knowledge) that I had learnt was being turned on its head right before my eyes.
Another case in point is an article I read on the some guy who was known for his signature knives. He actually took about a couple of years to deliver a typical order. Amazing, Right? Then there is of course the clichéd Rolls Royce example where every car is lovingly handcrafted over several months after getting an order. Closer home, the Mavalli Tiffin Room (MTR) in Bangalore actually closes it door on diners at 7.40 every evening. All of these emphasize the fact that not everybody needs to hustle their supply chain in order to deliver on their commitments. In fact some of them seemed to take pride in elongating the lead times as much as possible while others just dint bother about the customer. If we try to make sense of this masochistic customer behavior, one fact of life will stand out. It’s called the power of BRANDS and the loyalty they command from their faithful.
The next fact of life is that in almost all cases, these brands have been built painstakingly brick by brick over several years, some over decades and even centuries. Most of them had an attributed “halo” around them by their groupies and due to this, it is impossible to reverse engineer and replicate their success. In a lot of cases, there is actually nothing to copy or follow. A most unfair situation! Isn’t today supposed to be the new dawn of a resurgent India where a thousand entrepreneurial flowers are supposed to bloom? How are the new age Davids supposed to take on the entrenched, fattened Goliaths? After all, there are no rules in a knife fight.
Supply chain comes to the rescue:
Some of the smartest cookies have figured out that the shortest way to customer loyalty runs through the most undervalued Marketing P… PLACE. The trick is in making sure that product availability becomes more important than the product itself. Smother the lazy customer with small comforts and convenience that they don’t have to get off their backsides for anything. Examples abound of new age superstars who have made this their life long obsession.
Any list of Supply Chain enabled superheroes can start only with FLIPKART, which has made superior logistics into a multi-billion dollar machine. They are super fanatical about their website and the delivery time and the rest of the pieces of the puzzle fell in place miraculously. On the other end of the spectrum, a small time grocer called FAMILIES has driven SPENCERS Hyper Market out of business in my neighbourhood, all because he delivers at a fraction of the time. His investment is probably one-tenth of the bigger rival with ROI shooting through the roof.
It’s happening right before our eyes. AMMI’s BIRIYANI has spawned into hundreds of franchises solely based on the strength of their logistics. CHAI POINT, a start up by Harvard Graduates has its basic premise as the ability to deliver chai while it’s still piping hot. FERNS n PETALS has elevated the “same day, timely delivery of flowers” into a fine art.
The ability to crank up their supply chains to very high velocities and precision has enabled these upstarts to build very powerful brand promise and positioning in almost no time. This remarkable short-circuiting of what used to be a long, slog up the customer delight mountain has delivered stratospheric growth and scale. Now, how did these guys unlock the code? They just took a leaf out of the Michael Dell playbook and embraced Supply Chain Analytics.
Supply Chain Analytics is a discipline that has managed to reconcile three unwieldy characters that always used to pull in different directions COST, GROWTH and CUSTOMER SATISFACTION. By investing in data capture on the order fulfilment, frequency and customer preference patterns, natural advantages of aggregation, economies of scale and volume driven leveraging can be brought to bear with devastating effect. Algorithim-ized, data driven SCM processes are superb levers to push the envelope relentlessly on customer convenience and delight.
The author, Karthikeyan Damodaran, is a Consulting Services Delivery Leader at BRIDGEi2i– A company on a mission to unleash the power of analytics and transform the lives of enterprises and individuals alike. We believe that the solutions to almost all intractable problems lies buried inside the data. The Supply Chain Analytics group within BRIDGEi2i is firmly focused on going the distance with client organizations to make sure that they better manage inventory, reduce working capital through our granular understanding of demand and supplier variability and deployment of cutting edge optimization techniques. To know more visit www.bridgei2i.com
The views and opinions expressed in this article are those of the author and do not necessarily reflect the official position or viewpoint of BRIDGEi2i.