Why is Supply Chain Performance So Critical for Modern Brands?

Last week I talked about growing brands and the fact that there seemed to be a missing software category for growing mid-market brands in-between a fully-outsourced solution and an expensive, capital-intensive one that they can build on their own.

There are at least 2 huge reasons (I'm sure you could come up with more!) why supply chain is so important not only as a differentiator, not only as an enabler, but as a critical component of the business model:

1 - It's About Cost.

Ask yourself who controls these questions:

* How much inventory should we buy? (forecasting)

* Where should our inventory located? (placement)

* How many workers do we need to hire? (labor)

* How can we get our transportation costs cheaper? (rates)

* When should we reorder? (forecasting)

While there is always a cross-functional collaboration, the Supply Chain organization is ultimately the owner of these decisions. In some, it even determines what channels your inventory is allocated to.

2 - It's About the Experience.

People sometimes forget how important unboxing is. Remember the first time you got an Apple product compared to a phone or computer from another manufacturer?

There was something different there that was part of Apple's DNA and brand.

Unboxing is critically important and how it's done, the cost of the various components, how they are repeatably executed are all important.

The emails, texts, and instructions that lead up and follow the unboxing are also super-important, but these are often in the hands of customer service or marketing.

Costs have continued to rise in the last few years, and even though they may be flattening out due to flat-ish (?) demand, it does not seem like the disruptions are anywhere near over (hello, Teamsters!).

This means supply chain excellence and finding the right providers are going to continue to be important as we go forward here, perhaps more than ever.