During one of its Board Meeting a fast fashion brand came to a conclusion that it is essential for them to be able to forecast demand for fashion trends and cater to that demand by quickly introducing new lines, in order to maintain their competitive advantage and sales.
The Board sold one of its business units and sanctioned accumulated funds for investment into their supply chain to the Chief Supply Chain leaders of the MNC.
The Supply Chain Authorities at the fashion brand, decided to reinvest the accumulated funds into its supply chain innovation towards collaborative robots, auto palletizers to track pallets and address the long pending requirement of automation. The improved supply chain has reduced operating costs and enhanced the asset utilization rate in its factories by 10%.
During the next board meeting, Board Members were presented with the data that had a positive score in terms if operational efficiency and asset utilization. Despite the positive operational results, Board Members were not satisfied and demanded explanation on what was done to enhance forecast demand for fashion trends and in time inventory fulfilment around introducing new lines.
The sudden snag resulted in an atmosphere of confusion, distrust and demotivation among the Company’s Supply Chain leaders who were expecting a exalt of their past few months efforts that had resulted in reduced operations costs and optimal utilisation of assets.
The Board out of utter dissatisfaction with the expectation differences, henceforth, decided to oversee all such processes and lock in the decision making authority away from the Supply Chain Leaders and responded with inadequate or no allocation of funds to the supply chain arm in the near future.
With a feeling of demotivation and disengagement, key supply chain leaders who had been the innovation evangelists for the Giant fashion brand called it a quit and shifted to a competitor firm in search for a better working atmosphere that contained trust and authority to lead.
What resulted in such a chaos at the fast fashion brand Organization?
You have to identify where you want to play and how you want to play before going for transformation initiatives!
Current times of technological changes foreshadow a dramatic — but manageable — shift in business logic everywhere. Corproates have to be crystal clear in why they want to change and in which directon they want to witness the change and lastly how do they want to see the change, these questions must be clearly thought upon before going in for any transformation initiatives.
Organizations that scale their supply chain initiatives have a clear procedure for understanding the objectives behind the transformation and have a predefined and clear communication strategy to avoid any gaps as in the case above.
As penned down in my last article The Age of Intelligence in Supply Chain – Mission Critical Business. The right corporate strategy that helps align the supply chain vision with the overall corporate strategy and vision is a must today to see programs to completion or gain the benefits of scaled adoption.
The right balance among transformational investments, experimentation and attention to details will only be achieved by following a clearly laid out systematic approach.