We’re living in an age of disruption—a time when technology empowers customers to dictate more and more of what their purchasing experience will be.  Consumers are more educated than ever before about each and every step in a given supply chain. They expect to get what they want, when they want it, on their own terms. And this change is coming along faster than many of us could have predicted.

We need new business models to serve these evolving consumer preferences. We must build networks of business-to-business and business-to-consumer collaboration, especially through e-commerce, and support them with highly efficient inventory management and replenishment, product delivery and returns.

E-commerce is a boon for businesses and consumers, but it is also a challenge. It provides a higher level of visibility and flexibility all along the supply chain. Adept businesses have realized that this greater level of control offers them a competitive advantage.

Many brick and mortar stores have evolved into mini fulfillment centers, depending on quick turnaround to drive the omnichannel supply chain approach that has become a requirement for nimble businesses.  Omnichannel doesn’t mean just having e-commerce. Rather, if your online and physical storefronts and warehouse and distribution facilities aren’t linked, buyers are almost certainly getting a better experience from your competitors

Succeeding in omnichannel means optimizing your supply chain, an ever-evolving task that separates the business of the future from those unable to move beyond business as usual.

What’s driving the disruption?

What started as a retail phenomenon in which consumers demanded a seamless online and retail experience has become a cross-industry must. This expansion of an omnichannel strategy means speed to market has gotten even more important for your business.

With the prevalence of e-commerce, business-to-business customers are increasingly buying straight from manufacturers. With integrated sales channels, customers no longer separate your physical building from your website or social media pages. They expect to interact with you seamlessly, irrespective of the medium—often through multiple platforms at once. In fact, individual customers are the ones deciding how and when they interact with you.

This is a disruptive technological experience.  

Part of that value is transparency. Real-time visibility all along the supply chain will be expected – regardless of the size of your company. Fortunately, business and supply chain modeling is growing more accessible along with improved data analytics. Together, they make for more robust business model simulations, an invaluable tool for manufacturers and distributors in a rapidly changing world.

B2B is catching up to B2C

Traditionally, business-to-business transactions were treated differently than those in the business-to-consumer realm. That’s no longer the case. We bring our experiences as consumers to our jobs, and that shift is transforming expectations for how businesses can improve. Personalized, flexible and on-demand B2C expectations have driven, and continue to drive, B2B interactions.

Companies are so rich in data, and operate systems so complex, that e-commerce and supply chain management have become critical in industries ranging from high tech and healthcare to industrial manufacturing and automotive.

A Supply Chain Investment Strategy

There is no one, “right” way to invest in your supply chain. It’s all about strategy. For example, do you want every part available within 30 minutes or two days? Only you can make that kind of choice for your business.

If you look only at the flow of items from supplier through distribution center to the customer, you’re just reviewing one side of the equation. Don’t forget to analyze the process from the customer’s perspective.

• How much are you – and your customers – paying for shipping?
• How long does it take for items to arrive after they’ve been ordered?
• Can you make adjustments to receive orders in the same amount of time for less money or more quickly for the same cost?

Effectively managing the supply chain involves balancing tradeoffs, particularly between cost and service.

Optimizing your supply chain

Once you have identified your cost efficiency, then you can pinpoint potential improvements. This should be an ongoing practice, regularly refined as your business grows, new technologies enter the marketplace, and customer behavior evolves.
If you haven’t done an audit on your customer engagement and supply chain methods in the last 12 to 18 months, you’re due.

Never underestimate the power of asking, “What if?” This allows you to step back and assess how the market is changing and identify new opportunities.

At UPS, we call this “constructive dissatisfaction.” Whatever you want to call it, be candid with yourself, pursue those opportunities – measure the results – and push the boundaries of what is possible.

Charlie Covert is Vice President, Customer Solutions, at UPS where he is responsible for supply chain design, sustainability, and consulting for the automotive, aerospace, government, professional services and industrial manufacturing sectors.

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