An emphasis on marketing and merchandising might seem like a recipe for retail success, but rather it’s a strong focus on logistics and supply chain technology such as blockchain that helps savvy retailers weather the storms and tackle new challenges.
The classic case study of Walmart versus Kmart highlights the dangers of retailers underestimating the importance of logistics and technology. Both companies were founded in 1962 but, by the late 1980s, Kmart had about double the number of stores and 60 per cent more sales revenue. The situation reversed in the 1990s as Walmart went from strength to strength. By 2018, Kmart had twice declared bankruptcy, while Walmart had grown to a retail behemoth with $482 billion in annual sales. The crucial difference in their journeys was their investment profile, executive decisions and focus on technology. Kmart emphasised marketing and merchandising, while Walmart invested in logistics operations and supply chain management to lower costs and achieve best price outcomes for customers.
Executive emphasis on technology is still driving enterprise outcomes today, although the focus and application of technology continually changes.
Today, the keyword for sustainable supply chain management is ‘all’. The approach must cover all stages of procurement, manufacturing and distribution. This includes all parties, from suppliers and manufacturers to third-party logistics, distributors, wholesalers and customers. It incorporates all functions, from product development, finance and operations to marketing, distribution and customer service.
Technology has again challenged the status quo and the emphasis of executives in the design of their operations. Blockchain has important applications in the food and beverage industry. Creating an indelible record of events, it provides an overarching registry and connectivity to all players in supply chain management.
The business case supporting blockchain is undeniable, driven not only by compliance requirements but also a new generation of consumers for whom trust and transparency are increasing drivers of purchasing decisions. Blockchain can turn positive social and environmental impact data into extraordinary brand value.
Those executives who appreciate this trend will generate strong recurring revenue by creating trusted brand assets, says Bruno Ustariz, director of SCM services at CitySoft, a company with more than 30 years’ experience in solution design and delivery in Europe and Australia.
CitySoft is a leading provider of business technology products and services across ERP, HCM, e-commerce, EDI and SCM.
Blockchain is penetrating all levels of the supply chain, Ustariz says. It is set to be a point of difference over the next few years, between those players that thrive – through the coming disruption in manufacturing, distribution and retailing – and those players that struggle for relevance.
By scanning a product label in a supermarket – using QR code technology that has gained
‘‘On the back-end, the success of such blockchain projects comes down to the solution design process.’’
acceptance following the COVID-19 pandemic – consumers can learn not only a product’s ingredients and nutritional content, but also the full supply chain history such as its origins.
‘‘This is more than just traditional traceability, it’s instant decision-making data in the hands of every consumer,’’ Ustariz says. ‘‘A Millennial mother can pick up a jar of baby food, see where it was manufactured and trace back all the ingredients to the farms.’’
CitySoft’s Australian technical development team is building an extensive food and beverage platform for manufacturing, distribution and financials, to provide blockchain integration at the various touch points in the supply chain with leaders such as IBM Food Trust, Beef Ledger, VinoTrust, AgriDigital and Provenance.
These are emerging trusted brands in the food and beverage sector, Ustariz says, with CitySoft’s blockchain services pack seeking to deliver best of-breed integration and management into its existing Sage platform.
‘‘End-to-end design is critical for successful integration of the benefits of blockchain into supply chain management,’’ he says. ‘‘On the back-end, the success of such blockchain projects comes down to the solution design process, which helps avoid costly mistakes further down the track.’’
This technical change is often perceived as brutally complex and expensive by SMEs. But strategic, cost-effective and methodical change is achievable with the correct technology products, people and processes. The long-term enterprise dividend is substantial, says CitySoft chief executive Anthony Russo. ‘‘This kind of technology investment is now available to small and mid-market enterprises, not just the giant Walmarts of the world,’’ Russo says. ‘‘Now is the time for these enterprises to prepare – to think, plan and act in order to capture future markets.’’
Blockchain enables entrepreneurs, from farmers to manufacturers and retailers, to build amazing and sustainable modern enterprises that are future-proofed and profitable. While Australia has a lot of successful small producers, they’re behind on this technology and consumers will start to expect it.
‘‘When consumers pick up an apple off the shelf, they want to know where it came from,’’ Russo says. ‘‘Is it genetically manipulated? What fertilisers and pesticides were used? What labour source picked and packed it?
‘‘These are the important questions that blockchain can answer to better inform shoppers and give tech-savvy businesses a competitive advantage.’’