If you are reading this column, chances are that you work with supply chains. If you do, you know about the six core elements that, particularly in the fluid and demanding world of e-commerce, can make or break your supply chain's ability to master digital fulfillment: Visibility, Mapping and Visualization, Risk Management, Design, Business Intelligence, and Talent Retention and Workplace Culture.
What you may not know is that a straightforward—and free—test has been created to grade a supply chain's readiness based on a test-taker's responses to questions concerning the six subject areas. Developed by the consultancy Adelante SCM and Legacy Supply Chain Services, the test eschews a detailed assessment of every supply chain process in favor of an analysis of the six disciplines that, according to the authors, "enable or influence virtually all supply chain functions and processes." Test-takers will be graded ("innovator," "leader," "performer," or "laggard") on each of the six disciplines. They also receive an overall score and a report containing what the authors called "helpful recommendations and best practices." Of course, the authors hope the test will serve as a gateway for companies to subsequently engage their fee-based services.
The test augments, but probably doesn't substitute for, a company's internal "deep dive" into its supply chain processes. Then again, such a hefty undertaking is often done every three to five years, and it can consume significant internal resources. The e-commerce landscape changes so fast that the takeaways from, say, 2014 may be irrelevant today. The value of the test is that it can be taken at frequent and flexible intervals, and doesn't require any cost (just time and maybe a little manpower). By keeping a company's supply chain aligned in real time to the rapid and sweeping changes in digital commerce, the test can be a helpful toolkit addition.
A key narrative in a report that accompanied the test was that many companies (and we are talking about retailers here) understand the importance of mastering the disciplines, but acknowledge that they have fallen short. The persistent disconnect has been the subject of many stories in our two publications—DC Velocity and CSCMP's Supply Chain Quarterly. The test can be important for retailers that, for example, need to know if their omnichannel fulfillment practices are consistently meeting customer demands, and what can be done, in the here and now, to improve them.
The test may not be the be-all, end-all for practitioners. But if it helps them compete more effectively in this somewhat scary environment, all the better. You may have seen the numbers, but they bear repeating: According to U.S. Census data, e-commerce has grown from 0.92 percent of total U.S. retail sales in 2000 to an estimated 6.47 percent in 2014—a compound annual growth rate (CAGR) of 18.8 percent. That compares with a CAGR of 3.3 percent for total retail sales. By 2018, U.S. e-commerce will exceed $493 billion, or 8.9 percent of total retail sales, according to the research firm eMarketer2. You can take or leave projections—many, in fact, can be left—yet the near-vertical sales trajectory we've witnessed over the past couple of years indicates that the forecast numbers are attainable.
Retailers, especially those that didn't grow up in the digital world, need all the help they can get. E-commerce has hit faster and with more ferocity than they could have imagined. Consumers, a largely unforgiving bunch, are running the order and fulfillment show. Many traditional retailers are swimming in murky waters with no life jacket. A test that provides an honest assessment of their strengths—and what's perhaps more important, their weaknesses—could serve as a much-needed beacon.
Editor's note: To evaluate your own supply chain's performance, go to legacyscs.com/supply-chain-grader/.}