SELF19: A closer look at the customer centric supply chain

Editor's note: This article originally appeared in Supply Chain Management Review, LM's sister publication, on February 8. 

“A low-cost supply chain is not going to deliver on the customer service levels required by your organization.” - Kevin Sakai, director, supply chain advisory, US, CBRE at SELF19

This morning marked my fourth day in Las Vegas, where I attended the Reverse Logistics Association annual conference and SELF19, the annual conference hosted by SDI Systems.

The first thing I wondered this morning was what would Hunter Thompson have written if he’d spent four days covering supply chain events rather than the Mint 400 desert race. Since I spent most of my three evenings in Vegas eating room service and catching up on emails, there was nothing gonzo about this trip.

Still, I’m leaving the Strip with a couple of takeaways about the industry today.

The best supply chains are customer centric supply chains: Steve Melnyk, a frequent contributor to Supply Chain Management Review has been writing about the customer-centric supply chain. Melnyk defines this as a supply chain whose goals are aligned first and foremost with the needs of its customers. In other words, filling and shipping orders on the cheap probably isn’t going to cut it anymore. That shift is illustrated in the quote above from Kevin Sakai’s presentation this morning at SELF19, and a presentation yesterday by Bob Abbondanza, Office Depot’s senior director of supply chain engineering and network design. Abbondanza explained how Office Depot was shifting from “individual supply chain component costing” – think driving down to the lowest cost on each supply chain process – “to a total end-to-end supply chain cost to serve.” If folks like Melnyk, Sakai and Abbondanza are right – and heck, Jeff Bezos, who has said he is more focused on delighting the customer than his logistics costs – that shift will take place at other organizations. Right now, the customer is King.

Reverse logistics is a thing: You would expect there to be a lot of discussion about returns at the Reverse Logistics Association conference. After all, that’s its DNA. But, returns came up a lot when I was at a meeting with some Dematic customers last month and was a topic of discussion following every presentation at SELF19 yesterday. Everyone is struggling with this.

Labor is still the biggest issue facing our industry. Enough said.

Next Gen Technologies are all the talk, but we’re still figuring out how they apply to our industry. I had a great conversation with a 35-year-old computer scientist who is working for a company creating algorithms for machine learning in our industry. Lots of interest, he told me, but getting the data from companies and then figuring out where and how to apply the algorithms is still stumbling block.

I’m sure in the year to come, we’ll figure it out. In the meantime, I'll keep pondering the Hunter Thompson question.