www.supplychainstandard.com
chain operations: “We have complex supply
chains which make it difficult to adopt quickly
in the short run. But in some cases we have
been able to react fast to adjust to current
market conditions.”
CONTRACTS: In times of crisis, what the
best prepared companies found most helpful
was having long-standing (mature) trusting
relationships – with an emphasis on a more
collaborative and a less transactional style of
management.
Contracts with key partners for winning firms
also were not one-sided from a reward
perspective. Most winning firms had clearly
identified the critical players within their
supply chains and ensured that these
relationships were kept on sound and balanced
footing through the use of proper incentives.
CO-OPERATION: Winning firms work in
close collaboration with their supply chain
partners. In our research we found that
winning firms were willing to provide
financial support if required to their key
partners, usually in the form of renegotiated
contracts. Also, these firms were of the
opinion that information sharing (especially
customer demand information and product
pipeline information) not only avoids the
bull-whip effect, it also demonstrates that the
firm is willing to build a longer-term
Most winning firms had
clearly identified the
critical players within
their supply chains and
ensured that these
relationships were kept
on sound and balanced
footing through the use
of proper incentives.
relationship with its partners. In other words
– information sharing is one key step towards
trust building; a vital ingredient of successful
supply chains.
ETHICS: Lastly, when asked to rank the most
important considerations for their supply
chains during the current crisis, winning firms
clearly indicated their preference for economic
and ethical considerations, ie the manner in
which firms engage with their partners is as
important for their supply chains as the
economic relationship.
In summary, to best prepare your firm’s
supply chain to both survive a recession and
emerge strong after it, focus on the following
five characteristics:
● active commitment and collaboration with
supply chain partners, visibly flowing down
from senior levels of the organisation.
● more effective control through increased
information sharing rather than less.
● an unwavering (daily) focus on all aspects of
contingency/scenario planning.
● recognition of the importance of
developing trusting relationships (ethics) as
opposed to a focus solely on transactional
legal/economic contracts.
● and build the capability to foster deeper
collaboration with supply chain partners.
● Only The Collaborative Will Survive, is the
end product of a project by OBA working in
collaboration with London Business School.
PENELOPE ODY
Penelope Ody is a retail market specialist and
a regular columnist for Supply Chain Standard.
Deliveries of delight
Viewpoint : SCS 05
Online shopping is growing – but when will home
delivery services bring customer satisfaction?
According to a pre-Christmas survey by online trade body IMRG, around 93 per cent of
those questioned were expecting to do some Christmas shopping online this year,
with 71 per cent likely to do at least half their entire Christmas shopping on the
internet. Reports from payment processor Retail Decisions suggested that on socalled
“cyber Monday” – 7th December, the peak online shopping day – sales hit £1.4 million a
minute at one point with a 61 per cent increase on the same day in 2008 and £33 million of
transactions processed between 1pm and 2pm. Post Christmas there was another surge as etailers
began their sale offers on Christmas Eve with the IMRG suggesting that £100 million
would be spent online on Boxing Day.
It all goes to demonstrate growing confidence and familiarity with online shopping, and is a
trend set to continue as the “digital generation” grows into adulthood. There is, however, one
downside to all this online activity and that is the need for physical goods to actually be
delivered to the customer. Music and video might be streamed to our desktops but buying
anything else requires a courier or some form of in-store collection.
Delivery services are not always reliable: most online grocers managed to fulfil orders before
Christmas but local TV and radio stations revelled in the handful of disappointed customers
left without their turkeys.
Even when the roads are perfectly passable, courier services regularly fall short of
expectation. One delivery driver persists in dumping my parcel on the doorstep and
disappearing without either (a) ringing the doorbell at all or (b) waiting to see if that doorbell
will be answered. Salvaging damp boxes of books from Amazon several hours and much
torrential rain later is not a pleasant experience. Then there was the company which put a “you
were out” card through the door dated two days previously. Had the card languished unnoticed
in my cluttered porch for two days or was it a
mistake? The card said they’d try to deliver on
the following day (ie the day before I found the
card) but no-one had called then. The
company’s helpline number was simply a
recordedmessageaskingmetochooseto(a)
upgrade my delivery at a cost of £10, (b) collect
it from a depot ten miles away or (c) arrange
delivery on another day when the goods would
be left at a place I designated at my own risk –
no means of finding if the date on the card was
right or wrong. Having opted for (c) and waited
in all morning alert for a delivery van, the
parcel finally appeared and the driver conceded
that the date on the card was probably wrong
adding “we get so many complaints from
customers about our call centre – it’s embarrassing”.
Then there was the
company which put a
“you were out” card
through the door dated
two days previously.
Had the card languished
unnoticed in my
cluttered porch for two
days or was it a mistake?
Collecting from a store is, for many, the ideal option but, although becoming more
commonplace, not all retailers yet have supply chain systems or in-store processes that can
cope with such services. So how will logistics companies cope as home shopping increases?
From this customer’s point of view it would be rather nice if they adopted the tactics of my
local postman and the regular Parcelforce delivery driver. If there is no answer at the door both
– unbidden – simply tuck our parcels either into the greenhouse (easily visible from the road)
or at the back of the open-fronted garage and leave a note to that effect at our door. Some
online retailers helpfully ask you to give special delivery instructions (viz. leave in greenhouse if
out) which simplifies the delivery process.
Equally, I remember a presentation from Dell’s then carrier at a home shopping conference
many years ago where the speaker explained how a phone call to customers to check when
they’d be in to sign for the goods proved a highly cost-effective strategy cutting the need for
repeated delivery attempts. Again, not all retail web sites ask for a contact telephone number
which can be put on the dispatch label for use by couriers. Ocado – and probably several others
– helpfully send a text message the day before the delivery is due and then a second text a few
hours before – even telling the shopper the name of the delivery driver and the colour of the
van: it’s simple, unobtrusive and presumably also helps to reduce failed deliveries. Such
strategies are far more acceptable to the customer than automated telephone responses,
requests for additional money to “upgrade” the delivery or even – as I found recently – a curt
note telling me that if I failed to rearrange the delivery within 48 hours the goods would be
returned to the supplier. With customers demanding greater choice how long will it be before
we are offered a selection of carriers to choose from when we buy online? It would be a sure
way to avoid the known doorstep dumpers: and with growing emphasis on customer reviews,
negative comments about a carrier may become increasingly visible and relevant in future.
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