Keys to staying ahead of the competition

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Businesses are always balancing short-term goals with long-term objectives. At the same time, they are trying to become the dominant market player in their segment. Supply chains play an important role in that—ensuring materials are sourced, products produced, and ultimately delivered to the end customer, whether that is another business or consumer.

The goal of the supply chain, while offering variations depending on the type of business, is generally the same: satisfy internal objectives and external customer satisfaction requirements.

But how do you accomplish all this and still stay ahead of the competition?

High-performing companies

Not surprisingly, companies that are high-performing generally have high-performing supply chains. There are many ways to achieve this, but there are also some common themes.

In 2022, Fast Company author Nick Schneider said the main factor differentiating a good and a great company is its people.

“Fundamentally, to succeed, companies need to have a great product with a proper market fit and enough money to support themselves in the long run,” he wrote. “But once a business has the essentials, the difference between a good company and a great company is how the people in the organization feel about being there. When they log in or enter the office every day, are they on a mission or are they at a job? If they just feel like they’re at a job, rather than accomplishing something for a cause that’s bigger than them, your company is not going to be the leader in its space.”

New York Times best-selling author Simon Sinek, who wrote the books “Start with Why” and the “Infinite Game,” and founded the Optimism Company, wrote in a LinkedIn post in 2022 that the “best companies don’t focus on where the competition is going. The best companies focus on where they are going.”

In essence, Schneider and Sinek are both suggesting the same thing: Being great starts with looking inward.

6 concepts to set you apart

Kaihan Krippendorff, writing earlier this year for the Harvard Business Review, noted six strategic concepts that he believes sets companies apart. They are:

  • Borrow someone’s road
  • Partner with a third party
  • Reveal your strategy
  • Be good
  • Let the competition go
  • Adopt small scale attacks

Readers can read more about each of those strategies in his article here, but one of these—reveal your strategy—can be a major shift for many companies.

“Outperformers were twice as likely to openly share their strategic intents and plans rather than keeping them close to their chest as companies have historically done for fear of competitors copying or counter-attacking,” he wrote. “Organizations have come to realize that the salutary effects of broadcasting their strategic vision into the market, even with the competition, can outweigh the risks.”

Krippendorff also suggests sharing success with suppliers, employees, NGOs and governments among other stakeholders. Those companies, he said, are 85% more likely to outperform their competitors.

“When stakeholders see that your success supports theirs, they are more motivated to support you by, for example, aligning their strategic investments with yours, buying your products, advocating for the company, or in the case of employees, showing higher engagement and improved productivity,” he noted.

Let technology lead

There is now plenty of research that suggests those companies on the edge of the technological revolution are seeing big advantages.  

Research from The Hackett Group found that “Digital World Class” organizations operate at a 21% lower cost than their peers and have 32% less staff as a result—a potentially significant cost advantage.

Digital World Class organizations are defined as those that achieve top-quartile performance in business value (a composite of stakeholder experience, digital enablement and traditional effectiveness metrics) and operational excellence (a composite of efficiency and business process automation metrics) in The Hackett Group’s procurement benchmark.

The research found that Digital World Class organizations see improved resiliency and higher business excellence across an array of key metrics. For example, they drive nearly 2X more savings due to spend cost reduction, generate a 2.4X higher ROI, are 86% more likely to be viewed as a valued partner, and see 76% lower process costs per order.

The result is that these organizations have a $6 million annual cost advantage over a peer (based on a $10 billion enterprise).

Gartner has also found a similar dynamic at play.

According to its research, top-performing supply chains are investing in artificial intelligence and machine learning at twice the rate of their lower-performing peers. Those same firms are also able to leverage their size to utilize productivity as a focal point for sustaining business momentum over the next three years. Conversely, lower-performing companies are more likely to utilize efficiency or cost savings.

“Top-performing supply chain organizations make investment decisions with a different lens than their lower-performing peers,” said Ken Chadwick, VP analyst in Gartner’s Supply Chain Practice. “Enhancing productivity is the key factor that will drive future success and the key to unlocking that productivity lies in leveraging intangible assets. We see this divide especially in the digital domain where the best organizations are far ahead in optimizing their supply chain data with AI/ML applications to unlock value.”

Finally, another survey, by technology firm Cleo, found that 80% of businesses that invested in supply chain technology saw a revenue increase within one year.

“Just like consumer expectations evolve, so do companies’ business objectives and ecosystem commitments. But often these evolutions emerge due to various supply chain disruptions,” Tushar Patel, Cleo CMO, said. “By leveraging technology to build greater resilience to supply chain disruptions, a company is better able to take control of its supply chain commitments and deliver on their promises—resulting in stronger relationships and trust with their ecosystem.”

What does this all mean?

Certainly, there are many ways companies can stay ahead of their competition, and supply chain success is only one aspect of that. But, research and anecdotal evidence suggests investing in technology and people as primary reasons companies move from being a good company to a great company. Technology optimizes operations and can increase revenue (or at least maximize margins), while people seem willing and able to perform at high levels for companies that share their values and invest in them.

When any list of the top companies is compiled, the ones that rank high in investment in people and technology are inevitably among the market leaders. The evidence is clear on that, and while there are other ways to scale the mountain, those two areas are pivotal to the success of the organization.

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