Written by Supply Chain Executive Mike Mortson. This guest post first appeared on Mike’s industry blog, Supply Chain Game Changer.
In this age of social media it is amazing how powerful that “likes” and “dislikes” and comments are to any single Brand. Marketing departments generally know this all too well and they spend a lot of time and money in promoting, protecting and preserving their Brands.
But the responsibility of managing and protecting your Brand lies not only with Marketing. The Supply Chain has an absolutely central, and pivotal, role that impacts the Brand as much as any other function in your company.
It is true that if one person has a bad (or good) experience then they will communicate that to two or more friends. And then those people will each tell two or more additional friends who will in turn tell an ever expanding chain of people. The massive reach of social media makes such communication both instantaneous and immediately global in reach.
So if one of your customer’s has a bad experience with your company you must know that this will be shared to anyone and everyone in very short order.
As your consider the gravity of that reality now consider the efficiency and effectiveness of your Supply Chain. Your Supply Chain touches every single stakeholder in your company. And if it is not functioning well, even for an instant you have the ability to damage your brand profoundly.
Customers and Your Supply Chain
Whether your customers are business or individual consumers your Supply Chain must, literally, deliver in order to protect your brand. Missed commitments, late deliveries, poor quality, damaged products, higher costs, or a lack of competitive capabilities all reflect on your Supply Chain.
If you do have problems then you must address them quickly and you must insulate your customers from the impacts of any such issues. Problems do occur every day. The challenge then is how do you react to these problems and protect your customers and your brand.
I recall when one of my Managers came to tell me about a problem with the IT systems which had stopped the operations in one of our Distribution Centres. There was no prognosis as to when the system was going to be back up. The Manager was just reporting the news to me with no action plan.
I asked the person if they wanted to phone the Customer and tell them that they weren’t going to get their order on time and we didn’t know when we were going to be ship. The Manager was taken aback. I then said that if they weren’t comfortable calling the Customer with their answer then why did they think that it was okay to give me such an update. And why weren’t they pressing for immediate resolution? Needless to say the Manager came back in an hour with a solution as well as a reality check on how we had to protect our customers and our Brand.
Your Customers have many expectations on you and your Supply Chain. And your Competitors are raising the bar every day.
Employees and Your Supply Chain
Your Employees are equally in a position where they are impacted by your Supply Chain. Tools such as Glassdoor, Facebook or Twitter are social media platforms wherein employees can freely and anonymously share their views on you and your company for everyone else in the world to see.
Your Supply Chain can not function without your employees. If they are not clear on their objectives and expectations, if they are not properly trained, and if they are not properly motivated then they will either unknowingly, or deliberately, cause missed commitments to your company and your customers.
Employees are the face of your Brand. Whether they are dealing with Customers or Suppliers as a part of their daily roles in running the Supply Chain you want them to represent your Brand with the highest degree of integrity and pride.
Shareholders and Your Supply Chain
Your Shareholders and Company Executives are counting on the Supply Chain to execute well and execute competitively. They naturally expect that the Supply Chain team will deliver quality products and services on time at a competitive cost while providing a differentiated capability. This is the responsibility of every Supply Chain team.
Additionally your Shareholders expect that the Supply Chain is working to further improve the market value of the organization. For instance Inventory is very often one of the largest assets in a company. Yet if the Inventory is not managed well then it can drain cash, and profits, and your return on investment (ROIC). This will impact the ability of the company, and its Brand, to operate as a going concern let alone grow and be viable.
On top of that the Supply Chain operating expense can be formidable. The cost of your operations, materials, and freight and logistics can be a substantial portion of your total operating expense. Additionally there can often be a considerable capital investment required to run the Supply Chain operation. All of this can further impact both profitability and competitiveness.
All of these Supply Chain impacts reflect on the Brand that is your company.
The Supply Chain is one of the most important functions in your entire company. If the Supply Chain does not execute well, in any dimension, then it can negatively, profoundly, and permanently damage your company’s Brand.
Supply Chain is no longer just the organization that places purchase orders and gets material in to your factories. The End-To-End Supply Chain is the engine that makes your companies run. And if that engine is not efficient and effective then the Brand that you have will suffer.
While there were many other factors at play in the story of the demise of Target Canada, our blog post The Target Canada Story and the Brand Impact of the Supply Chain! illustrates the ramifications on your Brand when your Supply Chain fails.
Conversely if you have an advanced Supply Chain that performs well, reliably, and competitively then you are positioned to grow and improve your Brand on the back of a superlative Supply Chain team!