business

Intelligent Supply Chain: The New Brand Equity

Smarter supply is the route to customer delight

There's nothing more important than an ethical or conscious supply chain.

“Supply Chain” isn’t exactly a phrase that screams creativity. We think of sterile warehouses, unwieldy shipping freight, and supply routes that are slow to adapt. But the end goal of supply has evolved far beyond just inventory. Technology is sharing the load with human employees and helping us find ways to deliver products and services that are far more intelligent, delightful, and timely.

You hold a distinct competitive advantage if you can:

  • Get items to shelf in the right quantities at the right time
  • With the right degree of freshness,
  • Satisfying the right customers
  • While treating the source with respect and sustainability

Your supply chain transforms into something greater: the Delight Chain.

Now Serving: Front of House Delight

Supply chain isn’t just the line cook, it’s the Maître d'. Why? Because customer fulfillment, while engineered at every point in the chain, is experienced at the front of house.

What are the telltale signs of customer preference and need? They’re broadly ranging, but data can give us a very sharp picture of specific use cases. A hyperlocal understanding of things like weather, traffic, events, and cultural traditions goes a long way.

A leading grocer, for example, built a creative supply chain model that optimized for a very specific use case:

“They recognized that on college game days they were selling out of two items: bananas and Gatorade. They couldn’t put it together. Why college game days? Using analytics, they found that of course, the number one hangover cure for people in college was bananas and Gatorade. So what does the retailer start to do? They started brick loading and palletizing bananas and Gatorade on the same pallet. So a branch would get, say, 20,000 bottles of Gatorade and maybe 50,000 bananas all dropped into one store. That effectively cuts down efficiency costs as well as freight time.” — Saif Rivers, Digital Supply Chain & Retail Ops Lead, IBM

This kind of preparedness isn’t necessarily something a brand would want to advertise in-store, but the end result is undoubtedly customer delight.

It Pays To Be Transparent

Is there a competitive advantage to a transparent process? Yes, absolutely! In decades past, people knew where their milk was coming from, because it was hand-delivered to their door from a local farm. As Rivers understands it, this kind of accountability is being re-engineered to provide value for both brand and customer:

“With a transparent, end-to-end trail of farming certifications, factory records, product identifiers and other data, retailers and service providers can ‘open their books’ with a clear conscience. They can tell customers with conviction that they get it.”

The byproduct? Customers can make purchases that align with their values and beliefs. And, for that matter, they can rest assured that grocery and food purchases have been vetted for safety.

Last summer, a major QSR player partnered with Golden State Foods and IBM to pilot an automated system that easily equips grillmasters to know what’s fresh. Through the synergy of RFID tags and IoT monitoring, the company could see:

  • Where their shipments had gone,
  • The temperature at which they’d been maintained, and
  • Their shelf life

They could also plan and forecast for peaks and troughs in their supply chain.

A key player in accountability is blockchain technology, which gives all parties more control and visibility within the supply chain. IBM’s Food Trust employs blockchain to ensure that producers, suppliers, manufacturers, distributors, and retailers have a permissioned, permanent, and shared record of food system data.

What About Asset-Light & Recycled Inventory?

Where do Rent the Runway, AirBnB, and other asset-light models fit in? While supply chain has historically been seen as having a final destination, what if your resources are essentially circular?

In fact, these companies can be seen as a rich testing ground for more traditional brick-and-mortar, because they operate as real-time showrooms and trial experiences for customers who might later buy inventory. Take the woman who rents a dress for her 21st birthday—might she be more inclined to buy that same dress or something similar for her 30th, when her income has changed?

The data gathered from items that aren’t ultimately purchased but instead recycled within the same marketplace can be just as valuable as that from commercial sales. It’s the Sharing Economy, and it’s changing the way companies think about asset ownership, inventory management, and responsiveness.

If you think about Biodiesel from discarded restaurant oils and compost, for example, it has value beyond its immediate purpose that can be transferred elsewhere. It has a certain life in restaurant or grocery operations but is then repurposed in another form (engine fuel). In short, Intelligent Supply can also extend or renew the chain.

Intelligent supply will become a signpost for your brand.

Sustainability. Reflection of local needs and tastes. A democratized process that’s responsive to evolving customer desires and market shifts. These practices are changing the general perception of supply chain from dinosauric warehouses to a direct relationship between source and consumer.

To Rivers’s mind, “There's nothing more important than an ethical or conscious supply chain. How do you source product? How do you bring AI into your supply chain in a way that allows it to make repeatable, measured decisions?

With this kind of openness, brands not only win the hearts and minds of customers, but they also share the stage with the many unknown people who make their products and grow their food.”

For a more in-depth look at the technology required to make these supply innovations a reality, download the white paper here.

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