8 January 2019
Not only an multi billion company, Amazon has also created a phenomenon called “The Amazon effect”. This evolution, and disruption, of the online markets and physical outlets is a result of great increase of e-commerce. Amazon is of course not the sole cause of this change, but the name is an acknowledgement to Amazons market dominance which has contributed largely to the disruption. The Amazon effect is mainly the way customers’ expectations and business behavior has changed. Quick delivery of goods has become a de-facto staple in e-commerce and is no longer impressive for many customers. Quick delivery is instead assumed. Businesses must now perfect their supply chain to get their products to the right spot to keep their customers from going to other faster competitors. To gain the expertise necessary to adapt to this changing landscape business need to look at the often under-appreciated business function; the supply chain.
A CEO today require the operational mastery make the company satisfy the increasing need for satisfied and repeat customers. More and more of the value created is no longer tied to the profits and losses of a company, but the efficacy of the management of the millions different goods bought and sold. Imagine a global CPG manufacturer with millions upon millions of goods traveling the globe yearly. Managing these intricate worldwide supply lines and keeping their customers satisfied is even harder than it first seems as production companies rarely control more than 20% of their supply chain. Instead they have to work through contract manufacturers, carriers and external suppliers. Keeping the supply chain efficient and stable to avoid supply and product shortages, keeping up with customer demands and even minimizing the effects of disasters, natural or otherwise, is what makes or break a company. Which makes supply chain management one of the biggest priorities for a CEO.
In this emerging environment it is clear that the supply chain professionals are bound to be one of the major keys for the success of a company and most likely become the most important executives in the world.