Supply chain planning and execution will not be successful without the third leg of the tripod - collaboration. Collaboration is the ingredient that super charges the planning and execution to new levels of success. Of course there have been many retailers that have been successful in the past utilizing the command and control method practices to manage their extended supply chain. Of course there will continue to be retailers that will continue utilizing those same command and control method practices because they have been successful in the past. Developing the collaborative extended supply chain however is proving to be the key point and method to drive continued growth and success in the retail extended supply chain network.
Retail has always required a strong interaction with the members of the supply chain due to the nature of the business. As I have previously mentioned, the retailer provides two services in the consumer shopping environment; first the retailer provides the services to complete the sale and second the retailer is the customer facing outlet for consumer product delivery. I realize that I am over simplifying however I am doing this to explain the importance of the supply chain. The supply chain provides the supporting framework for the retailer to support consumer shopping. There have been a continuous release of improvements to the supply chain from the paper purchase order to the electronic ordering, tracking and planning of product via EDI. This all lead to the vendor managed inventory practice that helps the retailer to ensure in-stock conditions with a higher percentage.
All of these practices and methods in the past though have been based on the command and control practices that have been the foundation to most business frameworks, this is also referred to as the customer and supplier practice. The velocity of discontinuous change however is making this command and control practice more and more difficult with which to succeed. This velocity of discontinuous change is driving the migration from a command and control practice framework as a matter of survival. This is just not enough time in the day to allow an organization to control all aspects of the decision making process.
This is why the collaborative partnership model has grown to such prominence in business, it allows for the partners to push the decision making to the most appropriate level by implementing guidelines and principles to support the business requirements. This turns into a matter of trust and review rather than command and control. Allowing and encouraging the collaborative partners to make decisions based on the business demands and guiding principles to support the business allows senior management more time to focus on the strategic plans and decisions. This focus on strategy provides the foundation for the future success of the collaborative partnership.
And now for the audience participation portion of the show…
ECommerce will have wide ranging impacts on both the retail and manufacturing sectors. How can you focus these abilities to improve the consumers’ experience? Improving the consumers experience will require a re-evaluation of the sales channels, the manufacturing channels and practices and the supply chain channels and practices from the raw materials to the consumers’ homes. In order to ensure and maintain success in this new reality you must harness the tools and capabilities in many new areas. How can you support these continuously changing requirements?