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Supply Chain Challenges, Consumer Goods Logistics

The Hunt for Efficiency

Alex Stark | July 08, 2011

Michael Sansolo, the long time senior vice president of the Food Marketing Institute and past editor-in-chief of Progressive Grocer, guest blogs from his unique view of the changing nature of today's shoppers and their impact on the food retail industry. For more information about Michael, visit his website and blog at michaelsansolo.com.

In many ways, the drive for efficiency is the story of the supermarket industry. It's in the basic DNA of the industry to look for more effective ways of moving product from the farms and factories through to warehouses, stores and consumer pantries.  For many years the industry was the hallmark of efficiency among American businesses and when that mantle passed on to non-traditional operators, the industry launched a massive efficiency initiatives to examine areas of waste.

But even as we focus on supply chain excellence, we have to stay mindful of another truth: Shoppers—the arbiter of industry and company success—care nothing about logistics.  What they want is value, which translates into a wide choice of products sold at reasonable prices. And none of that can be accomplished without the support of an excellent supply chain.

That's why in tough economic times like the present, we need extra attention focused on eliminating supply chain inefficiency, which in turn demands clear and constant communication by trading partners. Without open and frank discussions problems and opportunities can't be identified and grabbed.

There's a small but important scene in the wonderful movie The Right Stuff that tells you everything you need know about the importance of operating efficiently.  In the scene, a group of pilots and engineers are asked a simple question. "Do you know what makes these rockets fly?" The engineers say it's too hard to explain, but the answer has nothing to do with aerodynamics, physics or any other science.  Rather, it comes down to funding. The equation is simple: "No bucks, no Buck Rogers."

In supermarkets, efficiency translates into a better in-store experience, better shopper value and a better chance at retail success.