Tuesday, February 26, 2013

The Future of Supply Chain Networks Err! Value Chain Networks.

Today’s blog post is based on the readings assigned under “Week 7: Challenges and Opportunities for Executives”. The focus of this blog would be on exploring what could be potential areas of improvement in the supply chain networks. I think the future of supply chain has to

·         Seize every opportunity to use what appears waste to be waste of one process as an input of the other.
·         Provide an end to end value for the customer and not just the business because what would matter in the future are the sentiment of the customer and not just the efficiency of the business.

Value Waste - Waste as Input:

Weeks ago we had seen the example of Rohner[1] (chemical company) which uses its waste to produce biodegradable sheets that are sold to farmers to cover their strawberry fields during winter. There is another company that has gone beyond the call and established a major business out of its waste. We are talking about British Sugars. Their primary business was sugar beet. As a part of Green initiative, they established their own heat and power plant to support their business. The major wastes from these operations were the water that was used to wash the sugar beet and the recycled CO2 gas. They realized that they could use the heat, the recycled CO2 and the nutrient rich water to produce tomatoes[2]. Since 2006 this initiative has increased tomato produce from 34 million to 140 million round tomatoes in 2010. The company is now the largest producer of round tomatoes in Europe[3].

Value Customer Sentiments - End to End Value to Customer:

Have you ever been in a situation where you could find a store that sells what you want but does not have a dedicated delivery service and you cannot go out to buy it yourself for reasons like you have a flight to catch or you are sick or maybe you cannot visit that place by yourself?

Imagine an adhoc delivery network that would collect ordered items from across the stores and deliver it at a place and time of your convenience! Such a delivery network would generate positive sentiments for the organization as it the customers feel valued. While this might not appear to be a socially appealing choice, many of us would accept that this is would make life much easier. There is a need to realize the importance of customer sentiment about a business as claimed by Dr. Patrick Dixon[4]. We saw in class that Zappos generated positive customer sentiments by directing customers to the right place to find what the customers wanted. The take away here is that they were ready to lose transactions but not customers or their sentiments.

Supply chain networks have largely been seen as enablers of a business but viewing it as a value chain like in the case of British Tomatoes, Rohner and Zappos could radically change the play field for the better. Would other companies seek opportunities like these as business drivers to transform themselves or continue to depend solely on product based innovations?


[1] - Chinnusamy, Navin. "Supply Chain Management: Venlo - Green City: Profitability and Sustainability are not mutually exclusive, not anymore!." Supply Chain Management. N.p., 29 Jan. 2013. Web. 26 Feb. 2013. <http://cmuscm.blogspot.com/2013/01/venlo-green-city-profitability-and.html>.
[2] - "Britain's biggest tomato source - News - Eastern Daily Press." Home - Eastern Daily Press. N.p., 5 Oct. 2006. Web. 26 Feb. 2013. <http://www.edp24.co.uk/news/britain_s_biggest_tomato_source_1_692239>
[3] - "2010 news and media releases." British Sugar UK Home. N.p., 19 July 2010. Web. 26 Feb. 2013. <http://www.britishsugar.co.uk/Media/2010/cornerways_phase_iii.aspx>
[4] - http://www.youtube.com/watch?v=MGBDJ9qXJiw&list=PL5873547F44013605

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