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To win at the business game, companies need to strategize their supply chain as if they were playing a game of Battleship.
In the game of Battleship, a ship is quickly sunk once it’s located. That’s why successful players don’t clump all their ships in the same place on the grid. Rather, winners spread out, taking advantage of the whole scope of the grid — boldly daring to go even to the outer edges.
Let’s take a look at the principles of the board game and how they apply to business.
Don’t Position All Your “Ships” in One Place
Oftentimes, it may be fiscally beneficial to join the fleet. There’s a reason so many manufacturing businesses look to suppliers and factories in China, making it the world’s top export country. Take advantage of the low costs and high quality — but be strategically savvy by fanning out.
Industry Today confirms, saying, “Companies with decentralized manufacturing enjoy many benefits that often elude companies with centralized plants. These advantages include flexibility, being closer to their customers, better and timelier information, more motivated managers and employees, and the ability to take advantage of low labor costs in different areas.”
Consider the same approach for your domestic warehouses. Fullrite advises, “If a good portion of your orders are international, setting up multi-warehouse distribution could afford you some savings in shipping cost and the time it takes for your customers to receive their order. It can also help you offset European Union VAT (Value Added Taxes), which can range from 15% to 27%, depending on country.”
Significantly, if adversity strikes an area, your entire business won’t sink when you have the option of using suppliers, factories, and warehouses in other locations.
Caveat: Don’t spread out too far. The more countries of origin and warehouses, the more variables — as in, things that could go wrong — there are. Depending on the scope of your business, it may prove too risky, inefficient, or costly to decentralize your supply chain. Even if that’s the case, a tactical competitor knows to be one step ahead of disaster and has a playbook with an alternative plan. It’s better not to wait until rough waters to vet alternative links in your supply chain, educate and train new vendors, and negotiate under duress.
Maybe for you, the strategy shifts away from the location and focuses more on diversifying your manufacturing schedule and shipping schedule. Though it may not be cost- and time-efficient in all circumstances or for all product types, perhaps a multi-tiered rollout could work for you if you want to test product or if you need a contingency plan if a plant is struggling to meet a deadline.
Play to the Edge
Go to the edges of the world to find the best deals and quality. Don’t be afraid to push the boundaries and go where others aren’t going. Most people will shoot for the middle of the Battleship game board. You’re not most people. Your business is unique.
Today’s customer cares about the ethics of the supply chain and the story behind a brand. The coffee brand Sweet Maria’s, for example, understands that its caffeinated fans want more than a strong brew, and so instead of just sourcing from the top 5 coffee-producing countries they import their coffee beans from places like Yagikawa Farmers Cooperative Society in Kayanza Province, Burundi, and on their website share information about the farm behind this coffee to increase visibility into their supply chain.
Here’s another example: During the Greek economic crisis, the country’s economy decreased by a fourth, and the country went from having 80,000 factories in 2010 to only 57,000 in 2013. To survive when they couldn’t do so on their own home turf, businesses looked to international export.
Today, Greece has the strongest manufacturing sector in the world. Even IKEA sources from Greece. “Manufacturing Production in Greece increased 3.90% in January of 2020 over the same month in the previous year,” reported Trading Economics.
Just don’t put all your “pieces” at the edge, and certainly don’t go entirely off the grid. Keeping the first principle in mind, instead of clumping all parts of your supply chain on the edge, sail into different zones — or at least be prepared to do so if and when you need to.
Be Unpredictable
By diversifying you’ll be in a better position to maneuver than your competitors, and they won’t be able to guess your pattern. Make it your business mission to not just surprise your competitors but surprise yourself. Be unpredictable — in a calculated way. You’ll become a talked-about industry leader when you lead the pack in innovative solutions to the supply chain. Sometimes all it takes is a small twist on an old idea.
The common model for home delivery has been trucks, but while Amazon has come under scrutiny for its dangerous delivery vans, UPS launched its game-changing eBike. Fast Company reports: “The earlier bikes… could only operate at a small scale. But the new system could perform as efficiently as driving, perhaps even more so. Although the small cargo box has only about a tenth of the capacity of a regular truck, at 95 cubic feet and 400 pounds, because the vehicle can easily fit in places where other trucks can’t, it can potentially save time.”
Likewise, while Boeing created the world’s largest warehouse, U.S. retailers are finding success by bucking the go-big-or-go-home trend: instead of one giant warehouse, they’re utilizing a fleet of micro-warehouses. “For e-commerce companies, one of the key benefits of renting smaller warehouses is the option to open customer fulfillment centers in population-dense urban areas,” Insights reports, “which means faster delivery times, fresher produce, and more personalized customer service.”
Image Credit: Image courtesy of shinobi / Shutterstock
