The digital age is here for mid-market companies as consumer demands disrupt the traditional supply chain. In today’s competitive marketplace, consumers know what they want and when they want it, and the buying phase is only one part contributing to their overall satisfaction. Brands must deliver seamless fulfillment, returns, and in some areas, service experiences.
To help middle market companies win the customer of the future, KPMG, in collaboration with Bloomberg Media Studios, analyzed how innovation and increased competition is changing supply chains and offers practical steps for a company’s successful evolution.
Method #1: Generate new business models
Customer-centric business models create new opportunities through supply chain transformation. Direct-to-consumer sales, subscription-based selling, and customized products change the way a company’s fulfillment network operates. Digital platforms allow for more predictability concerning supply chains, as companies can locate manufacturing and distribution centers close to consumers to reduce shipping costs.
However, this set-up actually can increase shipping costs as companies ship small packages to consumers instead of a large shipments to retail locations, which are cut off from distribution in a direct-to-consumer business model. Careful planning is needed when shifting distribution to achieve profit, and the pursuit is a marathon, not a sprint.
Method #2: You have a need for speed—to market
A company’s “speed to market” is an increasing concern in the C-Suite, according to Bloomberg, who analyzed the earning call transcripts of 6,900 companies.
Success for mid-market companies will depend upon their ability to deliver goods and services faster than ever before. Though companies may start by distributing goods from factories and warehouses, a more customer-centric business model delivers a multi-dimensional experience with different supply chains1.
1 Bloomberg Intelligence
For example, a concert-goer buys a ticket, makes dinner reservations for after the show and scores the artist’s album—all from the same website. This supply chain improves inventory turn and customer satisfaction through increased speed to market.
Method #3: If you build a digital platform, consumers may come
Uber, Lyft and Airbnb and similar housing apps, allow companies to sell other people’s items with the benefit of not having to maintain the underlying assets. Through continuous advancements in artificial intelligence, these companies will be able to utilize dynamic pricing algorithms to deploy their workforce and cost structures to accelerate growth.
Middle markets do not want to be left behind, and they don’t need to be with the right solutions. After all, share services are expected to grow 68 percent over a four-year period, ending in 2019.
KPMG has five steps for mid-market companies to help them innovate their supply chains and take advantage of speed-to-market opportunities.
Step into the digital transformation with KPMG
KPMG understands the mid-market struggles with digital disruption, and we can help you not just survive but thrive through supply chain transformation. With the knowledge and expertise you need, KPMG can help you see your business’ targets and organize your mid-market company to achieve them.