Transparent supply chain management and effective supply chain visibility is a critical tool in a company’s continued growth and successful brand image. The latest John Oliver episode on Fashion (which you can watch below) featured shameful behavior and practices that were part of how products were and are being produced in third world countries. The Kathy Lee Gifford’s clothing line used underaged sweatshop workers. GAP and others repeatedly employed contractors that subcontract orders out where workers are underaged and may work as relative slaves. Some companies do not adhere to policy in a country that has little oversight of what many deem proper work conditions. C-suite execs plead ignorance to the conditions that are exposed and the consequences created. This is not the attitude that companies should express to shareholders and consumers as confidence is lost and contributes to financial losses. Accountability is the new call of the day with transparent supply chain management that provides all of the information necessary and with practices that make for a better playing field for all members of the supply chain process.
Better wages for truckers will attract more individuals to get their CDLs which will benefit the growth of transportation networks and provide additional availability from more truckers. Long-haul trucking is a physically demanding job that requires employees that can fulfill all of the requirements. Truckload rates are set to increase 12 to 18 percent to offset this additional cost. Companies need to shift their attention to better supply chain visibility and management in terms of optimizing the use of technology to handle transportation management and investment in a streamlined transportation accounting service. This will mitigate any additional costs incurred by the change. An interesting development, as discussed in The Economist’s Why American wage growth is so lousy, stated 2014 showed that 1.3 million Americans had lowered their wage expectation and companies took advantage of this and began hiring in low-wage sectors. Positions requiring skilled employees that are invested in the success of a company are a valuable commodity. Better wages attract more and better-skilled employees. Such individuals provide a better output for an invested company.
4 Main Supply Chain Visibility Trends Driving Change
New trends are shaping the market and companies that incorporate useful practices do well as expectations change. Four main trends concern us here:
- Connected supply chains provide additional opportunity link supply chains and receive more data. Data can indicate issues with procurement, product quality, and delivery. Companies that can collect, analyze and respond quickly to issues are one step ahead of their competition.
- A trend in dual/multi-sources helps to provide additional supplier sources in the case of any concerns.
- Skill gaps and retaining talent is an issue that plagues companies. It takes time, energy, and ongoing training to onboard new hires, particularly in specialty fields. It may be worth more in the long-run to retain talented staff than to continually hire for vacancies. Less costly mistakes are made when employees fully understand the detailed operations and their role within the organization.
- Buyers are moving away from selection based solely on purchase price and quality discount. They are leaning towards a multi-dimensional approach and more consideration is being shown towards the causal relationship of procurement on operations.
A New Unique Selling Proposition?
Jack Trout’s seminal book, Differentiate or Die: Survival in Our Era of Killer Competition, discusses the formation of real USPs and how to stand out in any market. Price is not the way to win and is rarely a differentiating idea. Being first, showing leadership, and developing consumer preference are 3 singular ways to differentiate a company within the marketplace. Who will be the first to own responsible supply chain visibility and management? Shareholders want to reduce the risks inherent in supply chain logistics. Visible supply chain management systems can carefully screen vendors and transportation providers, creating assurances that a new level of accountability is being met. Leadership in a specific field is only reinforced by followers. People will prefer doing business with companies that are proactive and that adhere to a standard that reduces the possibility of negative public relation issues and supports the well-being of all concerned. “Negative” attributes from competitors with little care into their policies and practices and poor oversight of the various stages of the supply chain can create a platform for repositioning others. This can enhance a marketing program making it twice as effective. There is no better time to break out of the pack and take a new stance.
Transportation management will change with the addition of newly-qualified drivers and supply chain visibility and management trends that are taking into account factors such as responding to larger pools of data, adding additional qualified suppliers and retaining quality employees. Buyers want a smooth working relationship between procurement and operations and a reduction of risks associated with inadequate supply chain management. Companies that can grasp the need to redefine their practices and account for all areas of the supply chain process will come out on top in a highly competitive market.