September 25, 2017

Apple recently announced its iPhone 8 and iPhone X, grabbing a healthy portion of social media airtime immediately following the announcement, as they so often do. While Apple is one of the most recognized brands in the world today, the company is also known for running a very efficient supply chain. Another company known for its supply chain prowess is Amazon. Following the company’s announced acquisition of Whole Foods earlier this year, wall street analysts began to prognosticate the timing for widespread home grocery delivery, a service that has been on the brink of success for a while but has never managed to get over the hump. If anyone can take it over the tipping point, it will be Amazon.

Apple and Amazon – two of the most revered companies in the industry, making news again. The admiration is so deep there is a term deemed the “Amazon Effect” which according to Supply Chain Management Review “is defined as the impact the digital marketplace has on the traditional business model in retail”. These two goliath companies have been on Gartner’s Supply Chain Top 25 list for so long that they have moved to their “Masters” list. A list of companies that have an impeccable supply chain that is unmatched to their competitors.

So, what does it take for these companies to consistently set the pace in supply chain? They are constantly pushing the envelope to discover, implement and exploit new technologies and business processes that will give them competitive advantage. In light of that fact, where do we suppose these two companies have been focusing over the past year or so? Let’s take some educated guesses, looking at the trends identified by Gartner within its Supply Chain Top 25 report.

Some key trends that stood out in this year’s list of supply chain leaders according to Business Wire are digitalization of supply chain, adaptive organizations and capabilities, and developing and fostering healthy ecosystems. Beginning with digitalization of supply chain, disruptive companies see digitalization as an opportunity to not only provide responsive support for existing products but to reduce time to market for new ones. A few of the most disruptive and impactful technologies include combining internet of things sensors, cloud computing and advanced analytics.

The digital parts of the supply chain are coming together in a way to fully view the real-time management in supply chains. Next, adaptive organizations and capabilities, this relates to digitalized supply chain in how it allows companies to be more adaptive to changes in their value chain. To become known as one of the best supply chains you have to be willing to take risk on new ideas regarding future supply related constraints or customer needs. Lastly, developing and fostering healthy ecosystems, leading companies understand that supply chain success depends on the health and well-being of the ecosystem.

Knowing that these two bastions of supply chain are probably aggressively pursuing business improvements in these areas, what is your company doing along the same lines? Of course, Amazon and Apple are known for developing leading technologies in-house. The companies have some of the deepest corporate pockets in the world, and a pipeline into the brightest new talent available anywhere. If your company doesn’t have those kinds of resources, what’s your game plan to keep pace? As the digital supply chain war heats up, is it possible to compete with, and even beat, these supply chain masters with commercially available solutions?

That’s a very interesting question to ponder, and one that will take more than a one-page blog post to answer. So, we will tackle this build vs. buy argument as the subject of our next education series post.

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