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Expanding the Supply Chain’s Horizon

A midmarket company suffers diverse challenges while trying to stay competitive and agile. Expanding into new markets is no longer an option; it's a must to stay dynamic and robust in the fast-paced evolving business environment. Expanding to serve multiple markets is the right move for midmarket companies seeking new business opportunities.

What risks must a solid supply chain overcome on its way to market expansion
Good supply chain management involves good and efficient risk management. Everyone knows this, yet unprepared supply chains remain a reality. A Supply Chain Management Review whitepaper efficiently lists common supply chain risks that every midmarket business should consider. Here is a summary.

  • Outsourced manufacturing: “Consider oil and natural gas prices, environmental concerns, inflating wage rates, political climate, weather and other natural disasters, substandard and/or toxic ingredients an outsourced supplier might use, and more.”
  • Environmental and social risks: Not paying attention to environmental and social risks can damage a business all the way to the consumer level. A Cone Communications study found that “71% of consumers consider the environment when they shop.” Supply chains benefit when consumers support “businesses that reflect positive environmental and social impact.”
  • Last-mile distribution centers: Customers are usually driven by price and fast delivery. For a midsized business, determining and executing the best last-mile strategy (“the final transportation of goods from the delivery center to the customer's door”) is paramount. For this, partnering with a last-mile distribution center may offer benefits, “starting with the cost savings of not building your own distribution center.”
  • Outsourced returns: This is simple: ” If you wouldn't consider outsourcing customer service, you might not want to outsource returns,” either. Processing your own returns gives you the opportunity to get feedback on returned items, and in-house returns usually receive better care and control. “Third-party fulfillment and returns companies are intended to be generic as they attempt to meet the needs of a wide variety of their customers.”
  • Regulatory and compliance risks: Regulatory compliance can be “both a top supply chain and business concern.” Cooperating and collaborating with “regulatory affairs organizations” can help companies avoid fines, supply chain disruptions, and delays like product expiration.

What does it take for a supply chain to expand its market?

  • A robust business strategy
  • Appropriate supply chain infrastructure
  • Meeting local, social, and environmental demands

When planning market expansion, midmarket companies must think of lead time, inventory levels, order fill, rates, and prompt delivery as important items in their strategy. Understanding each aspect of its supply chain in detail allows the company to achieve speed, cost reduction, flexibility, reliability, and sustainability. Reducing complexity and isolating actions increases visibility and thus profit.

13 comments on “Expanding the Supply Chain’s Horizon

  1. Nemos
    October 21, 2014

     “71% of consumers consider the environment when they shop.”  Well, it is very nice to read this but allow me to be a bit sceptical about it, because I have not seen it on the market, the leading criteria for most of the people while they are shopping is the cost factor.

  2. Hailey Lynne McKeefry
    October 21, 2014

    @Nemos, I understand what you mean. “Consider” is one thing. “Change their buying behavior” is a much higher bar.

  3. Hailey Lynne McKeefry
    October 21, 2014

    It's not suprising to me that regulatory requirements are on the list. I'm betting that if you asked the same question next year, it would move even higher on the list.

    Does anyone have things that they would add to this list?

  4. Daniel
    October 22, 2014

    “it is very nice to read this but allow me to be a bit sceptical about it, because I have not seen it on the market, the leading criteria for most of the people while they are shopping is the cost factor.”

    Nemos, I am agreeing with you because cost, functionality, features etc are the filtering categories than ecco factor.

  5. Susan Fourtané
    October 22, 2014

    Nemos, 

    I thought about this, too. That's what the report says and I believe it also varies from country to country, and other things also influence in the purchasing decisions. -Susan

  6. Susan Fourtané
    October 22, 2014

    Hailey, 

    Also, let's not forget that surveys are not really a determinant of how things really are. Many people tend to answer to surveys in a way that looks good, not necessarily always to with their reality. 

    -Susan

  7. Susan Fourtané
    October 22, 2014

    Hailey, 

    And it's this: A company's honesty on green issues is also an important factor for consumers: some 69 percent say it's OK if a company is not environmentally perfect as long as it is honest, but 78 percent say they will boycott a product if they discover an environmental claim to be misleading.  http://www.environmentalleader.com/2013/04/03/71-of-consumers-think-green-when-purchasing/#ixzz3GsXwUOVm

    -Susan

  8. Hailey Lynne McKeefry
    October 22, 2014

    @Susan, thanks for the chart. I bet this is (and I sincerly hope) that this is also something that evolves over time. It looks like a third regularly think about environmental impact…maybe next year it will be half.

  9. Hailey Lynne McKeefry
    October 22, 2014

    @Susan, you make a good point. And of course interpretation adds another layer of complexity.

  10. Susan Fourtané
    October 23, 2014

    Hailey, I believe this is something that evolves overtime, too. The problem is that evolves at a slow pace. Another good point that you mentioned below is that some people may consider the environment, but in practice, that doesn't translate in real action. Or, not enough. -Susan

  11. Susan Fourtané
    October 23, 2014

    Hailey, Yes, interpretation also has to be considered. Maybe a report on sales would be a better alternative to a survey in terms of accuracy. -Susan

  12. Susan Fourtané
    October 23, 2014

    Jacob, I added a chart here below, if you want to have a look at it. I don't know how they came up with 71%, but that is what they claim. -Susan

  13. Daniel
    October 27, 2014

    “Jacob, I added a chart here below, if you want to have a look at it. I don't know how they came up with 71%, but that is what they claim. -Susan”

    Susan, thanks for the info and updates.

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