VSC Solutions has joined forces with Frontline Market Research to augment its strategic supply chain optimisation services with route-to-market and territory expansion capabilities.
“COVID-19 has completely disrupted global markets, requiring that companies not only review their supply chain strategy but also its effect on their route-to-market and expansion objectives,” explains Grant Marshbank, CEO at VSC.
It is especially critical that businesses don’t stagnate in the face of economic downturn. Those that limit their growth will find themselves in fierce competition for dwindling market share. The best way forward is to enhance supply chain performance in existing segments and discover untapped opportunities by exploring new markets.
Further, new strategies must be marked by flexibility in planning and agility in execution. This will enable organisations to respond rapidly to shifting demand and be the first out the gate in a more competitive, highly digitalised and intensely value-driven post-COVID economy.
However, due to South Africa’s skills gap, companies will be hard-pressed to assemble the required talents for such an initiative themselves. “VSC’s partnership with Frontline ensures they have access to a full complement of scarce expertise to drive a successful transition,” says Marshbank.
Supply chain optimisation
The rampant spread of COVID and the consequent supply constraints of worldwide lockdowns have impacted markets dramatically. They’ve also changed buying behaviours among individuals and organisations to the point that a vendor’s supply chain strategies may no longer be relevant. This demands an urgent and sweeping review of their current model and an overhaul of existing processes to conform to new market requirements.
“Key trends to which vendors must adapt include businesses and consumers that are drawn to high-value offerings, digital engagements, and a major increase in remote working and e-commerce,” says Lukas Potgieter, COO at VSC. According to estimates, global digitalisation has leapfrogged by five to ten years across the board.
This is one of the many impacted areas to which vendors must respond immediately so as not to lose market share or fail in terms of service delivery. Potgieter suggests the following steps be taken.
Suppliers must determine the impact of sudden global digitalisation on their existing brick and mortar supply chain through extensive route-to-market analysis. This will allow them to reconfigure and optimise their supply chain and associated resources for new markets, segments and channels of operation.
To do so, they need to develop a comprehensive supply chain strategy that accomplishes three goals. The first is realignment of their sales force, sales objectives and sales performance metrics. The second is implementation of distribution and other transport services tactics that cooperate seamlessly with sales processes. The third is an evaluation of how any changes affect their current supply chain resources and the creation of a clear roadmap to migrate to the new model in a logical and cost-effective manner.
Vendors must also implement solutions that offer the appropriate supply chain optimisation and facilitate ongoing calibration and continuous improvement.
Lastly, they must strive for a fuller understanding of the evolving needs and driving forces that customers and their consumers face to better service them at the point of buying.
Supply chain officers may also find themselves with lower budgets and fewer resources while being expected to deliver the same performance. This is another key signal that rationalisation and optimisation of their supply chain is warranted.
In addition to companies optimising their current supply chain, it is critical that they explore new markets for growth. In a 2019 study, two African countries were listed as the top five growing economies in Africa, and five of the top ten fastest growing economies were African.
Economic growth is also strongly linked to population growth. Africa has the fastest growing population in the world, at nearly double the rate of the next fastest growing continent.
These pre-COVID statistics remain relevant to vendors looking for opportunities in a dormant global economy.
“When exploring new markets, it is imperative to perform in-depth research and market analysis up front to develop a robust route-to-market strategy and an effective roadmap,” says Steve Johnson, Growth & Innovations Director at Frontline’s Strategic Projects division.
A good route-to-market strategy focuses on unlocking product and brand growth potential by: establishing an optimal market reach in terms of both distribution and supply chain; executing a coherent channel strategy; achieving competitive point-of-buying execution; and maintaining profitable customer management.
The above makes it apparent that a good route-to-market road-map demands integrated strategy formulation and cross-functional teamwork in execution. Marketing, sales, key accounts, logistics, supply chain and distribution must collaborate closely to achieve the business objective.
An effective roadmap should typically be organised into four work-streams: channel, point-of-buying, customer and supply chain. Each of these work-streams will encompass several stages of analysis and research design, expressed through the following questions.
1. What do we know? This stage creates a fact-base from internal and external research to develop a situational analysis of each of the four streams.
2. Where are we winning and losing? This provides a diagnosis of market and operational performance. In each work-stream, sources of value creation and value destruction must be identified.
3. Where should we play? The most attractive opportunities for sales growth and cost-savings are identified. ROI analysis and the business case are developed around the best propositions.
4. How do we win? Strategic imperatives, that is, what must be done to grow and what must be defended, are formulated and prioritized. This is the core road-mapping stage in which project planning, resource allocation and time-lines are developed.
5. How do we keep on winning? Many plans fail from poor execution. So it is critical that suppliers identify obstacles and develop solutions for driving execution and controlling the work-stream activities. These may require organisational restructuring, change management, skills and competency development, and operational process reengineering, among other interventions.
“The wide scope of these enquiries demonstrates how critical end-to-end market research and analysis is when breaking into new territories,” says Johnson.
Finally, and most importantly, after establishing themselves in any new market, organisations must commit to ongoing supply chain optimisation, as with their existing networks.
In a time where global markets have been disrupted and constrained, suppliers face losing market share through inactivity. Instead they must focus on improving their position with quick wins.
They can immediately regain ground by ensuring their supply chain strategy is modelled around and optimised to meet changing demands. In addition, they can expand their supply chain opportunistically into untapped markets to realise new income streams. In combination, these steps are a powerful formula for reviving a flagging business.
However, the expertise required for such an initiative to succeed is seldom found in-house and is in short supply in Africa.
“By bringing these competencies together through our partnership with Frontline, VSC aims to give suppliers all the intelligence and resources they need to win,” says Marshbank.