Making promises you can keep—post COVID-19

This is an excerpt of the original article. It was written for the September-October 2021 edition of Supply Chain Management Review. The full article is available to current subscribers.

September-October 2021

This time every year, we publish Gartner’s Top 25 supply chains, the annual list of the supply chains that have made it to the top, a list that now also includes 5 Masters, or companies that have consistently outperformed year after year. You can read the article in this issue, along with the web exclusive material we publish on scmr.com, to find out what it takes to become a supply chain leader.

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Eleven years ago I wrote an Insights column titled: “Making promises you can keep…optimally.”* The deck was: “Optimized order processing and fulfillment(OP&F) is a proven technique for pleasing customers by giving them more accurate information on their orders.” Since then, and more recently, I’ve noticed that making promises you can keep is often times a critical shortfall in some supply chains.

Reflections on the importance of promising

The biggest supply chain stories over the past decade have been about the success of e-commerce order fulfillment—with Amazon’s e-tailing success the grandest of them all. What has made e-commerce buying so attractive to consumers versus shopping at a brick-and-mortar store?

Traditionally, Americans generally place greater relative value on instant gratification and convenience. I’ve never forgotten a statement I heard during a talk by the chief marketing officer of a consumer products company. One of the principles he followed during the development of new products and services was to “never bet against lazy.” He should have said: “Americans want to purchase products conveniently and get use out of them as soon as possible, especially if they save time.”

Traditional retailers offer products in stores and thus enable consumers to get instant gratification by buying them off the shelf. However, the total shopping experience also includes the travel time to and from the store, as well as time browsing and at the check- out. It’s not exactly instant gratification, but it’s close. Meanwhile, buying online eliminates travel time, and may save browsing and checkout time, but the delivery time to get an order to a consumer might add days, or even weeks, to the total order lead time. In terms of the customer experience, there’s a tradeoff between the convenience of shopping online, and the time to get the product delivered.

The success of e-tailing, however, has less to do with this trade-off, and more to do with getting the product as soon as possible with a virtually-guaranteed delivery (fulfillment date). Before e-tailing, a consumer was never sure whether an item or branded product was on the shelf or in the store’s backroom until the shopper got to the store. For example, if a product was on sale, often it was sold-out by the time a customer got there.

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