- Published: 17 - 10 - 19
- Written by: Andy Reed
Getting your ducks in a row
Back in 2013, successful US retailer Target, hit go on a plan to expand into Canada. It would see 124 stores open initially across a very short period. A bold move in anybody’s books. Eyebrows would have been raised had it not been for Target’s reputation as a paradigm of corporate good governance, caution and well considered commercial strategy.
Eyebrows were most certainly raised when all 124 stores abruptly shut less than a year later. Canada hadn’t worked for Target. It had lost them $1 Billion. They never recovered.
While we’re on the retail disaster theme, here’s another one. In 2007 a deeply embarrassed Mattel – a business which prided itself on responsible sourcing - was forced to recall a whopping 1.5 million toys after discovering the paint used on them contained potentially lethal doses of lead.
The self-proclaimed ‘World’s number one name in toys’ was suddenly a global pariah. Money and market share evaporated overnight.
While Mattel didn’t suffer the same grizzly fate as Target it was a close run thing. They did bounce back, but it took them years to regain even an ounce of credibility.
Who or what was the giant slayer?
Their supply chains were. As a term, supply chain sounds innocuous enough. But get your supply chain wrong and things will head south for you very, very, quickly.
Target’s undoing was they chose to use the same model of distribution from suppliers to warehouses and then into shops as they used in the US. The problem was they weren’t in the US. Everything in Canada was very different. This became brutally apparent just after they’d opened 124 stores. Warehouses creaked with excess stock while the stores, conversely, had virtually nothing in them. Not a hit with new customers.
In Mattel’s case, despite their diligence in vetting their suppliers, they didn’t consider their suppliers' suppliers. Or even the possibility they might have any. They had assumed one of their biggest suppliers painted toys themselves. In fact painting was done by a network of global subcontractors operating in legislatures with wildly differing attitudes to toxicity.
So what’s the lesson?
All too often organisations take a one size fits all approach to designing and building the chain of businesses who will supply goods and services to support their operational needs. In a world where the wrong kind of paint can bring a global giant to the verge of ruin, this is a dangerously wrong approach.
Managing a supply chain is a difficult thing to do. If you’ve ever tried to juggle 12 balls at once, in a thunderstorm while someone throws fireworks at your feet or changing a car tyre, whilst travelling at 70 mph on a motorway in the dark, then you may have some idea of the challenges faced.
Here at Tharsus we know this. We know a supply chain needs to be robust and unimpeachable. That’s why we don’t take the standard manufacturing approach. That’s why we design a supply chain that is uniquely fitted around the individual needs of our customers and their products. And that is why our customers and their products succeed.
If you want to hear how we might do this for you and your product, I’m always available to talk.
Andy Reed is Director of Delivery at Tharsus