Supply chains ensure the goods and services we want are where and when needed. They are the invisible backbones of the economy, and a company's success or failure depends heavily on the many different suppliers and processes that make up that chain.

A supply chain influences several essential areas of a business. It ensures that a business has the right products for customers. The speed and versatility of the supply chain influence the cost of procuring and storing products, not to mention their quality. Supply chains include the movement of goods, the origins of sourced materials, and sustainability. This last point refers to environmental and social concerns, but also wastage and spoilage that impact a company's bottom line.

Martin Christopher, Emeritus Professor of Marketing & Logistics at Cranfield School of Management, said it best: "The real competition is between supply chains, not companies." Supply chains are crucial, and the best businesses are also great at running supply chains. What lessons can we glean from those success stories?

Logistics

According to Harvard Business Review, truly competitive companies don't focus on money first but on responding faster to customers. Often, supply chain logistics are how that happens.

Internationally, Amazon is the logistics heavyweight. It has revolutionised supply chain management by focusing on fast and efficient delivery. Amazon uses extensive digital technology, automated warehouses and a well-maintained distribution network. The company also famously experiments with robotics and artificial intelligence to find even more improvements.

Takealot is South Africa's e-commerce giant, and like Amazon, it puts a lot of focus on logistics. It uses modern technologies to track everything in its many warehouses, reflecting availability on the Takealot website and coordinating with its delivery partners. Takealot also maintains a vast network of pickup points to help customers save on delivery and access goods more quickly.

Partners and Suppliers

When you buy something from a store, you vote with your wallet. That store is eager to keep you happy and get more business from you. Supply chains are the same—they want to keep the business of their buyers, and likewise, the buying company wants suppliers to reflect some of its values. Leading companies put a lot of effort into developing their suppliers.

The pharmaceutical giant Merck is renowned for its big sustainability gains and is currently considered the USA's most responsible company. Merck focuses on reducing waste and pollution, carbon reduction, and environmentally friendly practices. To help support those goals, it runs a Supplier Decarbonization Program that helps its suppliers reduce their carbon footprint and other damaging practices.

Vodacom also focuses on its suppliers and procurement channels, using the Vodafone Procurement Company to access a global network of suppliers, as well as local. By focusing on the quality of its supply chain, Vodacom gets big economies of scale to ensure lower prices, and it works closely with suppliers to tackle issues of human rights, fair labour practices, environmental protection, energy, climate change, health, safety and sustainability in its supply chain.

Efficiency

All top businesses take supply chain efficiency seriously, but the retail giant Walmart has turned it into an art. It started using data analytics and artificial intelligence back in the Nineties, and today deploys technologies such as RFID tags to track goods, predict demand, and ensure that products are on shelves where they are needed instead of taking up space (and money) in a warehouse.

Shoprite turned the local consumer goods market on its ear when it introduced the 60Sixty delivery service. 60Sixty requires more than a lot of guys making deliveries on motorbikes. It has an impressive supply chain that moves goods between thousands of suppliers, dozens of distribution centres, and hundreds of stores. Using digital tracking, artificial intelligence, and advanced planning, Shoprite has been building a very efficient supply chain for quite some time. And when the opportunity arrived, it could quickly create a delivery service that is still setting the benchmark for on-demand delivery in South Africa.

What can your supply chain do for you?

These examples may be from large companies, but their lessons can apply to any business. Take care of your supply chain, and it will help take care of your business, ensuring predictable costs and happy customers. Nobody knows this better than Tim Cook, Apple's CEO and the creator of its incredible supply chain:

"Companies that get confused think their goal is revenue or stock price or something. You have to focus on the things that lead to those."

One of those things is the supply chain.

Looking to digitise your supply chain? Find out more about it here.