“Is today’s Supply Chain a Competitive Advantage?”
Viewing supply chain as a competitive advantage or just a support function was the topic of this year’s SCALA Annual Debate. Many years ago Martin Cristopher advocated that in the future, business success would be determined by competition between supply chains, and that the “source of competitive advantage is found in the ability of the organization to differentiate itself from its competition”.
25 years on, the majority of the views from our speaker panel and high quality delegate audience supported his theory. However, John Perry, MD of SCALA, questions whether this is this really the case within many businesses, as opposed to just wishful thinking on behalf of supply chain professionals. He said that “If it is the case, why is supply chain so unrepresented a company board level? Why do we so often hear that supply chain and logistics is supporting the business strategy, and not driving it? Why are so many supply chain and logistics people almost totally focused on cost?”
As a generalization, John thinks this is still very much the case in many businesses, but that market leading companies and indeed many of the highly successful emerging new companies do indeed have supply chain and logistics as a driving competitive advantage in customer offerings, customer service and customer satisfaction – just look at the success of Amazon.
Another Success
Our 14th Annual Supply Chain Debate is now over, and from all of us at SCALA we’d like to say thank you for helping to make it a success. It took place once more in the picturesque surroundings of Coombe Abbey, located in the Warwickshire countryside, and welcomed delegates representing some of the most well-known and eminent companies across the globe. Supported once more by Toyota Material Handling and organised in conjunction with the CILT West Midlands, delegates gathered to discuss the issue of whether supply chain is a competitive advantage or just a support function.
After networking coupled with al fresco drinks and canapés and a chance to interact with our superb sponsors for this year, Executive Director Dave Howorth gave the opening address, thanking all attendees. Dave then went on to speak of the numerous developments currently taking place at SCALA, namely advancements in Cost to Serve, Demand Driven Supply Chain, Procurement, and the establishment of our joint venture in China. Following Dave was the Annual Debate’s chair, Keith Newton, who introduced the first of our distinguished speakers.
Challenges for supply chains and collaboration
Edward Osborne, currently working for Waitrose’s supply chain, was first to take to the stage to discuss with the delegates the increasing demands being placed on internal supply chains and distribution networks, and how retailers might need their suppliers to dropship more effectively and efficiently. He noted that in order to maximize the competitive and cost advantage of drop-shipping, said relationships must be strengthened, and offered some insights as to how this could be made possible. Edward touched upon the idea that “There are two factors that matter most to the supplier; when it’s ordered, and when it’s delivered”, as well as putting the question to the audience of “We have all of the technology that we need, but do we have the people to manage it?”, leading onto the next section.
Following Edward was John Tomlinson of John West, citing Amazon’s online fulfillment capability vs. the major grocery retailers as an example of the inherent competitive advantage that supply chain maintains. He explained trials and tribulations that John West had faced recently in terms of logistics and customer service, and what approaches they’d utilized in order to overcome these obstacles, which included a value-streaming process for their operations and the identification of communication issues, the ways they worked with their internal and external customers, and the correct use of data. They were then able to focus on collaboration, thus adding value to their trading relationships, and ended with the message that the consumer matters the most, and is therefore the crucial factor within a company’s supply chain.
The future of distribution and retail
As the July sun shone over the ramparts, Dunelm Mill HoSCP Simon Parnaby examined the pros and cons of cross-docking and central distribution, and remarked on the preference of managing store distribution. Simon delivered a comprehensive breakdown of successful warehousing approaches and how retailers can contribute towards delivering a competitive advantage within their supply chain through the utilization of new distribution approaches. Simon also spoke comprehensively about the hazards currently plaguing centralized DCs and the steps Dunelm, along with other suppliers, have enacted in order to reduce factors such as damaged stock, and increase their emphasis on forward planning.
Following Simon was Emma Ross of WM Morrison and a member of the UK CILT Board, who recently took on the role of UK Young Professionals Chair. She delivered a refreshing take on retail approaches and recent developments in delivery, noting how often supply chain and logistics factors go wrong and how we can address it. Her notion that “logistics is the new retail” was definitely an interesting remark, and Emma put the question to the audience whether their businesses passed her “7 habits” test that allowed supply chains to deliver competitive advantages. She contested that while the instant gratification is a strong contender for the presence of same-day delivery, people still use retail for the tactile experience of interacting with goods, meaning that the high street may not vanish from our towns and cities just yet.
A different perspective
Last but not least was Tiger Wang, chairman of SCALA China, who spoke at the Debate last year about collaboration and the impact of Brexit (a subject that was touched upon many times by delegates and speakers alike), and this time discussed the fierce global competition in the automotive industry. Tiger mentioned pressure on the costs that Chinese enterprises, though he also observed that the mood in China is one of optimism, now that the companies have realized the importance of the supply chain as a competitive advantage, and are “putting a lot of effort into improving it in order to continually enhance the competitiveness of enterprises”, using companies such as Alibaba and is B2C ecommerce platform “Taobao” as examples. This gave the audience an insight as to how the industry was progressing across the world.
Speakers then began fielding questions from the audience members, one of which suggested that “’free’ delivery is not only a lie but a recipe for disaster’, which most delegates agreed with. Emma then discussed the parallel in retail between those that typically buy in store and those that buy online, citing the recent developments in the supply chain making same-day delivery a regularity. Other questions concerned how businesses would acclimatize to increases in demand, and relationships between suppliers and retailers.
In conclusion
After the Debate itself was over, delegates retired once more to the networking area for food and refreshments, as well as a chance to catch up with some familiar faces and interact with the Debate sponsors. The result from the Debate was clear – in order for businesses to operate at the most efficient level possible, it is crucial that they regard their supply chain as a distinct competitive advantage as opposed to simply a support function, or just a means to an end.
The Annual Supply Chain Debate boasted the largest delegate list in quite some time and was centered around informative and thought-provoking discussion. Thanks to the great weather, the exquisite catering, and the tranquil atmosphere, the 2017 Debate was a resounding success, and thank you to everyone who attended.