Competition can be scary and challenging, often unwanted, but it is necessary for businesses and their supply chain.
It breeds innovation. Sounds cliche, but absolutely true.
Think of the biggest companies, even the tech-oriented ones. For as much innovation as they put into their products, similar or more goes into their supply chain.
The question is, why? There are several, but ultimately, the customer is the endpoint.
The customer is the reason a business is in “business”.
No matter the product (goods and services), it is useless to the business if they cannot get it to the customer.
To edge out their competitors, supply chains have accomplished great feats. Think of Amazon’s same day delivery.
Only a few years before that, people thought it was absolutely impossible. Today, it is the cornerstone of the company’s success.
Enhanced Efficiency
You cannot afford to waste supply chain resources in an environment ripe with competition.
When faced with competitors vying for the same market share, your supply chain must find ways to operate more efficiently.
Efficiency can morph into streamlined processes, reduced waste, and lower operating costs.
Market Responsiveness
In Africa, the market is constantly shifting. Whether from political instability, currency devaluation, or failed economic policies.
When these happen, the market tends to shift, and customers tend to reserve their resources, which means less money for more goods AKA less demand for more supply.
This is where your supply chain’s agility shines. Responding speedily, giving you an edge.
Cost Optimization
The pressure of competition on the supply chain fosters cost optimization. Customers want cheaper goods, and your supply chain competitors are falling over backwards to get it to them.
Competition helps you look for ways to reduce expenses without compromising quality.
Focusing on cutting cost is a great way to save money while offering customers lower costs.
Expansion Opportunities
Competition forces you to expand your supply chain and business to seek or accommodate more customers.
You can do this by exploring untapped markets locally and overseas. Expansion opens up new revenue streams and reduces dependence on a single market.
Examples of Supply Chain Innovations Born Out of Competition
Here are some specific examples of how competition has benefited the supply chain:
The rise of just-in-time (JIT) inventory management.
JIT is a system where companies only order the materials they need when they need them.
This reduces inventory costs and improves efficiency. An example of a business or supply chain that practices is Walmart.
The development of third-party logistics (3PL) providers.
3PL providers offer various supply chain services, such as warehousing, transportation, and order fulfilment.
This allows companies to outsource their supply chain operations, saving them time and money and allowing them to get ahead of the competition. An example of a major 3PL business is Amazon.
The use of technology to improve supply chain visibility.
Technology such as RFID tags and GPS tracking can help companies track the movement of goods throughout their supply chains.
This can help them to improve efficiency and prevent disruptions.
Tips for Supply Chains to take advantage of Competition
1. Make the customer a priority in your supply chain. Many tend to make profit a priority, which ultimately impacts their delivery.
2. Always strive for improvement. The world is constantly changing; don’t let it leave your supply chain behind. Strive for ways to improve constantly.
3. Customers value transparency; if they can trust you to be transparent with them, they will flock to you and stick around for a long time.
4. Collaboration matters, and it could help expose you to new opportunities and new markets, especially when there is a shared objective.
It is true that competition has its benefits and is critical to any business’s survival and supply chain.
However, when businesses fail to rise to the occasion, many have failed.
Obinabo Tochukwu Tabansi is an ex-supply chain professional turned ghostwriter with a decade of experience working in different facets of the supply chain. Today, he lives his passion for writing on all things supply chain and helping clients from across the globe communicate their thoughts and solutions seamlessly. His blog, Supply Chain Nuggets, is Africa’s fastest-rising supply chain blog, helping professionals, business owners, and curious minds navigate the continent’s complexities.
