Supply Chain Monthly

2018 EDGE Session Feature: Fireside Chat with Art Mesher on Companies who will "Thrive or Die"

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What happens when the four “P”s of marketing collide

with the three “V”s of the supply chain?

We get a new “4 P’s” in a pod…

In marketing, students are taught the governors of marketing in a framework called the four P’s: Price, Place, Promotion and Product. In supply chains a similar framework is defined as the three V’s: Visibility, Variability and Velocity. In 2014 it becomes clear that constant presence of networks and the transparency of supply chain channel members will create a new world of concurrent engineering and omni channel behavior that will drive “clean slate” supply chains, physical and systems reinvention. Marketing and supply chains will mash over networks and become structurally co-dependent and thus the birthing of a new set of governors of “web commerce…” 4 new peas in a pod. Proliferation, Presence, Proximity, and Personalization.

To be present, proximate, personal and prolific

The Proliferation of the microprocessor, technically new distributed machinery (i.e. 3D printers), business suppliers (physically and systems), and their Presence on “the networks” will become a major driver of supply chain behavior (see entrust paper, here). The always on always connected world creates a new world transparency where there is nowhere to run and nowhere to hide, and service and pricing become transparent and qualities are instantly exposed (i.e. likes and dislikes on Facebook). Capacities and capabilities are instantly searched and found and commerce enabled. Within process and discrete component assembly manufacturing, the reduction in the gap of wage differences from first and third world nations will force the need for new and real productivity improvements.

The most common denominator in the past to optimize supply chain and manufacturing was through cost, but not the actual process or delivery. With network presence and the proliferation of, you make nodes addressable and more important, understandable. This is where without understanding the details of supply chain and production, you can’t design the most competitive products. Integrated product development and concurrent engineering is what is being enabled broadly with presence, when applied with analytics and marketplaces.

Proximity is rapidly changing supply chain landscapes

While the last 2 decades saw the development of long supply chains (the slow boat from China) the very recent re-industrialization of domesticated economies (near shoring) and the desire for immediate delivery of goods and services in an omni-channel environment will lead to the re-emergence of the “local stocking location”. While logistics control systems to manage long supply chain systems have been in vogue, these systems will wane in popularity and necessity as the new and fad de jour challenges will be to optimize service policies in short high velocity supply chains without the inflation of assets (inventory, warehouses or fleet cost). Real time location based services will become new drivers of velocity and community coordination as “my trucks next door can take your load today” becomes much more feasible.

Personalization of product, personalization of fulfillment‎, and personalization of delivery will be key themes going forward. I want this product bundled with that product and I want it delivered to my house every month on the third Tuesday between 2 and 2:15pm… The give me what I want, when I want, the way I want any time I want it new world order will require a much tighter view of service policy optimization and asset utilization and will lead to new systems and supply chain designs driven by proliferation, presence, proximity and personalization. Most current systems are like 8 track cassette players in their notion of future obsolescence as they were not designed to be social extended, proliferated, personalized or even networked and as such we will see many new “clean slate” systems and services vendors develop solutions to satisfy requirements in these arenas and like a feeding piranha will take small bites out of the market individually but in mass can fell large prey like SAP, Oracle, etc.

What if you could take everything you learned and start over? What would you see different? What would you think different? What would you do different? These are great questions to support the small companies that can take on large global powers and win!!

Clean Slate Kudos

Look out Ben and Jerry’s and Baskin Robbins. This clean slate piranha may eat your lunch or your dessert. Personalized, proximate and soon to be prolific. Customized ice cream on the spot, on the fly, eliminating the cold storage supply chains of the ice cream industry. Smitten Founder Robyn Sue Fisher, an ice cream lover, really didn’t love the way ice cream in today’s world was muddled with unpronounceable ingredients (preservatives, emulsifiers, and stabilizers) to prolong shelf-life as required due to the cold storage supply chain processes. With new technology, shouldn’t we be able to make ice cream closer to, rather than farther away from, the cow? She became intent on the idea of new, old-fashioned ice cream and invented a technology called BRRBrrr™ which perfects the process of using liquid nitrogen to churn exceptionally small ice crystals to create the smoothest, densest and most flavorful ice cream on earth. Brrr™ makes this ice cream from scratch, to order in just minutes. Brrr™ is very nerdy and has three patents. These machines and their technology are highly portable and can be distributed with ease.


About the author:

Arthur Mesher, Principal, AG Mesher

Article was originally published January 15, 2014, with Cantech Letter