Supply Chain Management is a broad-based term. It includes each unique part of your business that gets products and services where they are needed, when they are needed. In today’s society, many consumers take for granted the sophisticated process of the global and domestic supply chains. It allows the consumers to get what they want quickly and easily, either from the shelf or smart device. The supply chain is the continuous link between marketing, manufacturing, and customer service. Traditionally, it would function as a background mechanism until something went wrong.
Most recently, the COVID-19 pandemic caused a major stir in the global supply chain. The years of 2021-2022 brought a massive supply and demand shock that caused the supply chain to rise to the forefront of international media. These disruptions forced consumers and businesses to react in ways that were operationally unprecedented. The result of the value chain volatility put an emphasis on how essential the global supply chain is to basic functions of the purchase and service expectations in our society today.
A Shifting Mindset Towards the Supply Chain
Prior to the past couple of years, Supply Chain or Logistics functions were often viewed as a cost that would not add direct value to the customer. However, as demand for speed and end-user customization has increased, a mindset shift has taken place. Supply chains have become an essential competitive advantage, as well as an important selling point to the customer.
In recent years, there have been issues: shipping container shortages, port labor strikes, lack of infant formula, and thousands of canceled holiday flights. These issues forced the supply chain to become more thoughtful, holistic and customizable with a demand for executional excellence. The post-COVID crisis caused unpredictability in every step of the supply chain, making the traditional methods of shipping less predictable and very costly.
Although supply chain activities affect businesses of every size, large companies usually have pricing power when issues are being solved. Being the “small guy” in a global supply chain can be tough. For example, Fulfillment by Amazon (FBA, an example of Multi-Channel Fulfillment) is a popular (and expensive) warehousing option. Since it is such a large operation that was also affected by the post-COVID crisis, smaller companies and orders often can be “stuck in the queue.” In addition, the costs to get to the warehouse would sometimes double the year-over-year costs.
The unpredictability has pushed people, processes, and technologies to evolve. It has given way to new creative solutions and has allowed businesses to personalize the journey with tasks such as manufacturing, transportation, warehousing, material handling, and packaging becoming integrated with vendors and customers via forecasting, order management, and payments.
Finley’s Barkery
Finley’s Barkery, based out of Eden Prairie, Minnesota, was one company that faced many of the above obstacles. Finley’s business model involves a large number of small, customized orders and a fragmented distributor network. Finley’s went a different route outside of FBA, instead deciding to insource small parcel work with local groups that supported employment for adults with disabilities. Not only were they able to be creative to improve their order processing system, they were able to expand their service mission with small parcel prep in-house, and contribute to the well-being of the local community economy.
The answer to improve supply chain management is different for each company. There are many factors that contribute to the answer, but being creative and thoughtful with the help of the right partners can get you there. If you are interested in exploring more about how we can help your company navigate your supply chain, check out our case studies to see more about what we have done in the past and how Pellasota provides coaching and expertise to support your growing business.