Welcome to the age of the "personal supply chain," a necessary response to the growing demands of consumers and the requirements of e-commerce, says Guy Courtin, vice president of solutions products with Infor.
SCB: What is the “personal supply chain?”
Courtin: I look at it as an evolution, where digitization is empowering us as consumers to dominate the relationship with brands and retailers. We’re putting a lot more expectations on sellers. And that’s creating personalized supply chains for meeting our needs, especially when it comes to how things are delivered. It’s exploding the whole concept of one supply chain for everybody.
SCB: What are brands and retailers doing in order to make this possible — given that it costs them more money, and the consumer isn't always willing to pay extra for personalized service?
Courtin: We have to mention Amazon, which has set the bar for all of us at this higher level of expectation. But we're starting to see brands and retailers react in their own way. For example, H&M announced a few weeks ago that it was going to provide pure transparency on how and where all of its products are produced. This is where the personalized supply chain comes into play, where a customer might say, “I’m concerned about sustainability. So I’m going to buy this product because I see the visibility, the transparency of sourcing."
Some brands are moving ahead of the curve and offering parts of the personal supply chain, but it's not easy. Amazon, with its one-day delivery service, is continuing to push the envelope. It’s forcing brands to think again about how they can meet our needs from a personal supply-chain standpoint, without destroying their margin.
SCB: There’s also a lot of talk about how retailers handle the last mile in a profitable manner, especially in the case of one-hour service or appointment deliveries.
Courtin: That's a massive challenge. I don't think there’s a single silver bullet for solving this. I do think you're going to see the aggregation of deliveries, as sellers trying to change buyers’ behavior. Yes, you might want that product within a day or hour, but maybe you're more flexible about where you receive it. The seller might convince you to pick up at a locker, in exchange for a $5 refund. Amazon is already starting to do that. Or pick up in store — the question is how do you incentivize the customer to jump on board with that?
SCB: What kind of technology is enabling this transformation?
Courtin: A lot of it goes back to the things we see every day. The fact that we carry a supercomputer around in our pockets. The fact that there’s a glut of information about us in the network and in the supply chain. The fact that supply chains are becoming much more transparent in terms of their networks. All of this information is coming together and being orchestrated.
SCB: Is product customization still a big deal? There’s nothing new about that — we saw it back in the early days of Dell Computer, and Herman Miller office furniture. In addition to wanting it fast, do we also want it customized to our own tastes?
Courtin: Absolutely. I think we’re going to see consumer goods companies having to meet that. Now they need to realize that they can't just give that away for free, or at the same price. They need to figure out that magic number that the customer’s willing to pay. For example, Adidas is running customized shoes off the same assembly line as their traditional batches. They’ve found a way from the manufacturing side to save costs, but still meet your needs for a customized shoe. I think we're going to start seeing more of that. Brands will be savvy enough to keep you within a certain parameter of what customization truly looks like.
SCB: So traditional brands and retailers may be bruised and battered, but they're getting up to keep fighting?
Courtin: They've been knocked down again, but I think their corner man has done a great job of getting them prepped to go back out — maybe not to beat up the consumer, but at least to stand toe to toe with the consumer and their needs.
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