An Outlook on Supply Chains & Spaghetti
How software helps businesses navigate their complex supply chains and end up with less spaghetti on the floor
“Corner!” as you’ll often hear throughout episodes of The Bear (Hulu), is a term everyone who’s ever worked in a restaurant knows at their core. A force of habit and probably said out loud too many times when turning into aisle 7 at the grocery store, its purpose across all restaurant kitchens in America is – quite literally – loud and clear. Anyone who's worked in a restaurant will tell you it's hard work; the rude customers, fast pace environment, and constant need to communicate with different teams of people. The last thing anyone wants to do during a 4pm to close shift is to disrupt the flow of food making and end up with what was a preventable accident that ends up leaving broken glass and spaghetti on the floor. The resonance of this hectic yet common restaurant experience offers a metaphorical lens through which we can view the intricate dance of supply chains in business. Much like the responsibilities of chefs, servers, runners, and managers in a restaurant, a business and its supply chain consist of a symphony of interconnected elements and people, each playing a crucial role in the creation and delivery of goods and services.
In a post ZIRP (zero interest-rate period) world, companies today are shifting from growth to survival mode and asking themselves the hard questions. Where are we burning excessive cash? What are our bottlenecks? What is our runway? Many of these questions point back to one of the most critical elements of any company and the basis of this article, its supply chain. In today’s market, B2B software solutions will find critical importance in helping businesses navigate their complex and dynamic supply chains. From adapting to macroeconomic trends that directly impact suppliers and costs to gaining valuable insight that will allow for greater operational efficiency, the supply chain software market will grow as it addresses the many steps, people, miles, and mishaps that make up a supply chain.
For simplicity’s sake, let's define the supply chain as the necessary steps it takes a business to go from zero to delivered. From raw material sourcing to a doorstep, the supply chain industry is comprised of many sub-markets; from manufacturing, inventory management, supplier intelligence, last mile delivery, and more. According to Freightwaves, the global logistics industry alone is between $8 to $12 trillion in size, making up nearly 1/7th of the World’s GDP. Furthermore, this massive industry remains largely offline and continues to run off of old habits. Historically – prior to the emergence of innovative cloud-based software solutions – most companies would get a handle on their supply chains through traditional, on-premise Enterprise Resource Planning (ERP)-like solutions. This generally meant that they managed workforce, transportation logistics, and warehouses, oftentimes using spreadsheets or even just pen and paper.
The first W-2 job I ever had was working at my local Massachusetts-ian grocery store over the summer(s) shortly after turning 15. I would come in every Sunday regardless of if I had a shift or not because at the front of the supermarket laid a thick 3-ringed binder that laid out every employee's schedule for the coming week. In this binder I would find the names of every full and part-time employee and their scheduled shift on a given day scribbled in blue ink. This procedure was done by the managers every week. I was only a cashier and the occasional parking lot grocery cart pusher at the time, but that observation alone made me only imagine the pen and paper process this grocery store performed when dealing with inventory and suppliers.
The value-add that software solutions offer to what is perhaps the largest addressable market is immense to both the company and its customers. For companies, cloud-based software solutions can help reduce costs and improve efficiency when removing on-prem traditional solutions that take up both space and valuable time. Furthermore, with a vastly expanding supply chain software ecosystem, more and more solutions will help address specific parts of the supply chain, allowing for companies to streamline the entire complex process. With these solutions comes valuable insights that would not be available to us without computers digesting data at a rate faster than any group of big brains sitting together in a room. Thus we can see more data and navigate circumstances better than ever. Interest rates, wars, shortages – these all will have an impact on supply chains anywhere in the world. With insight comes supplier diversity, best available prices, more efficient transportation routes, etc. Lastly, as to how this benefits the customer – with stronger, more resilient, and faster supply chains come faster deliveries and better products.
Much like our dining experiences, we often don’t put much thought into every single step that went behind the beautifully presented plate set before us. The negotiations on purchasing ingredients, the countless “Corner!” shouts in the kitchen, the cooks, the dishwashers, the server who took our order, the list goes on. So much had to go right for us to enjoy that delicious entrée, and I’m glad to see that a show like The Bear continues to open all of our eyes to the restaurant business. Just like how there are so many people and steps behind the scenes when we dine-in, there are countless moving parts in the supply chains of the businesses we buy from. With an ever more massive market and a constant need to improve supply chains, companies will only get better at improving efficiency and preventing casualties by continually adopting technology and software. I hope by shedding light on what I consider to be a backbone of society today, a greater focus in the new year on improving supply chain management will bring to the world a better customer experience, healthier businesses, and less spaghetti on the floor.
Some cool resources that I learned a lot from:
https://www.bvp.com/atlas/roadmap-supply-chain-software
https://www.freightwaves.com/news/how-big-is-the-logistics-industry
My co-worker William Goffe