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Amazon has shown us how superior supply chain management can be an actual competitive differentiator - by providing its customers with a differentiated delivery experience across same day, two-day and standard shipping. They turned the delivery model, indeed the business model on its head, through a carefully crafted network of central and local fulfillment centres, accompanied by sorting centres and local storefronts. This network, in turn, is efficiently connected by a combination of dedicated air and road fleet, parcel and postal services.

From the time Tim Cook took the mantle, Apple has been focussing on achieving low inventory turnover - famously saying ‘You kind of want to manage it like you're in the dairy business. If it gets past its freshness date, you have a problem.’ When it comes to technology such as smartphones, tablets and laptops, inventory deprecates very, very quickly, losing 1-2% of its value each week. To achieve this, Apple has taken a fundamentally different route compared to Amazon. According to San Oliver from Apple Insider, “When Cook initially took over Apple's supply chain, he cut down the number of component suppliers from 100 to 24, forcing companies to compete for Apple's business. He also shut down 10 of the 19 Apple warehouses to limit overstocking, and by September of 1998 inventory was down from a month to only six days.". Apple now purchases components and materials from a small base of suppliers, ships them to China for assembly. Products are shipped directly to consumers purchasing from Apple online stores via UPS/Fedex. For other distribution channels such as retail stores and other distributors, Apple keeps products at Elk Grove, California for shipping.

What do these vastly different supply chains with completely different value propositions for the customer have in common? The supply chain networks are designed around delivering the best experience for the customer. And these are powered by strong logistics capability to make these networks work as intended.

To make sure that logistics is complementing your supply chain network - you need to enable it with the right set of technologies. Whether it is an S&OP system for accurate demand planning, ERP for order and internal resource planning, a WMS for inventory management or a TMS for transportation management - all have a role to play in seamless logistics operations.

Oftentimes, the procurement, supply chain and finance teams go through blood, sweat and tears to pick the ‘right’ product - but focus is primarily on the ‘right features’ But making sure that the technology works for your supply chain goes beyond a long list of features. Below are a few areas to consider before making the choice:

Move away from on-prem to SaaS products: It is no news that companies across the world are moving towards as-a-service models - whether its infrastructure-as-a-service, platform as-a-service, and our favorite, software-as-a-service. And justifiably so. SaaS products have distinct advantages over their on-premise counterparts - including but not limited to low upfront costs, flexible plans, scalability and limited dependence on internal IT teams, and high availability and reliability.

Look at implementation teams and not just the product: Any organization looking to take up such a product, is looking to achieve a few key business imperatives - whether it is to gain visibility and agility, serve customers better or reduce costs. A great product / solution is only 30% work complete. For any technology implementation to be successful - It needs to be coupled with a new ‘digital’ way of working. The current ways of working must be redefined, the end users must be onboarded not just on the tool but also on the new ways of working. Onboarding must be supported by the right change management interventions. Bonus Maximum points for teams who track the value realized on a periodic basis. Implementation teams which go beyond product and focus on product adoption - are the teams who are truly vested in making the product work for you.

Invest heavily on blueprinting and business process transformation charter: Invest in a cross-functional team, which is working with the product implementation teams. The traditional method of as-is/to-be mapping and gap analysis needs to be re-worked. Freight is networked and as a rule your supply chain performance is dependent on your partner and supplier network. Focus on blueprinting the current state of play. Baselining and benchmarking are important activities as it will provide a measurement of how your processes stack up against your peers. Identify the key gaps. Now this is where things get tricky. Most organizations focus on the key gaps against immediate/short term needs - which will mean additional expenses down the line on plan upgrades, change requests and so on. But it will also incur non- financial expenses in terms of resource bandwidth consumed in non-value adding processes. Clearly articulate what your supply chain looks like: Today, 6 months out, 2 years out etc. Build a list of gaps from these versions of the supply chain from the current product perspective. Prioritize these gaps - based on time of need, time to implement, criticality to the business. This will help you build a clear business process transformation charter - and help you realize value much faster, while helping you build a sustainable advantage. Pando has helped customers realize quick and quantifiable value through digital transformation of their logistics operations. To know more about how we-do it, contact us.

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