The dangers of focusing only on the supply chain's last mile

In just about any circumstance, it'd be foolish to invest all of one's resources in the final steps of a process without building a strong foundation for that process up front. It's impossible to complete a doctoral dissertation without investing in years of early education to solidify the language skills required to write even the most basic of papers. It would be inadvisable, even dangerous, to run a marathon without first focusing on the initial training that makes those final strides across the finish line possible.

The impulse to focus on the final steps, rather than on maintaining balance and focus throughout a process, seems absurd. So why do so many organizations invest the majority of their resources in bolstering their performance in the "last mile"—the phase when products move from warehouse to customer—of their supply chains?

New tools and technologies not only have expedited the activities carried out in the last mile of the supply chain but also have made them more reliable, transparent, and cost-effective. The time frame from product development to delivery has been condensed, which is of the utmost importance in the new era of nearly on-demand retail. It's no surprise, then, that eliminating latency and opacity in the part of the supply chain where most of the actual movement of goods occurs has received the greatest attention from companies that are responding to the pressures of modern retailing.

However, no matter how efficient shipping and delivery might be, the entire effort can potentially be sabotaged by inefficient product development and other obstructions or oversights that may occur in the mid-stages of the supply chain. Consider that the typical product-development cycle is a largely linear process. Too often, critical input doesn't arrive until late in the game, requiring a redo, or at least an adjustment to the process. If, for instance, you're designing a new teak coffee table, you could take a trip to Indonesia, evaluate samples from multiple suppliers, keep track of your thoughts with a combination of Evernote files and JPG photos, and spec out the product for a physical sample—only to find out that while you may have identified the best source for teak, the latest consumer trend in coffee tables is actually marble, not wood. After all that time, expense, and effort, you now have to go back to the beginning of the process. So although it may seem intuitive to save input gathered from the last mile until the end of the process, it would be much more efficient to get that feedback earlier on—not just in the beginning stages, but also throughout the product life cycle.

New tools can help buyers avoid that conundrum by fostering collaboration from all levels of the supply chain. With the support of technology, the product-development process truly becomes collaborative instead of linear, and each party, from designer to sourcing executive to retailer, can weigh in at all stages of product development. Meanwhile, you can ditch the Evernote plus JPG filing system, because today's retail technology makes sharing visual and social—more like what you're used to seeing in your personal life.

The power of having time on your side
Today the most effective companies focus not just on the last mile, but also on allocating resources to achieve balance throughout the end-to-end process. But how can organizations speed up product development and other early-stage processes that don't involve as much physical movement of inventory?

Product-development teams spend significant time on what we think of as administrative tasks during the sourcing, supplier-selection, and product-development phases, also known as the "first mile." Most are still sharing cumbersome spreadsheets and haphazardly snipped screenshots back and forth through cluttered e-mail chains. Such inefficiencies can put teams at risk of missing internal deadlines and exceeding cost limits.

Using technology to collaborate and co-create through real-time sharing of ideas and information streamlines the product-development process and gives teams more time to be creative and stand out from the competition. Freeing time that traditionally has been spent passing spreadsheets back and forth among e-mail chains with 40 participants, each chiming in with minor revisions over the course of a week, is one of the most powerful ways to drive efficiency in the first mile. As the American Psychological Association states, "With increased time pressure, you take the simplest pathway, not one that's elegant or creative. But if you're able to spend more time exploring the maze, you're more likely to hit on exciting or new solutions."

Organizations would never dream of sacrificing speed, precision, and cost-effectiveness in the last mile of the supply chain. Every cent saved per mile is viewed as a major win. Neglecting the opportunity to similarly increase efficiency throughout the supply chain, including the earlier stages, is "penny-wise and pound-foolish." As the margin for error continues to narrow, companies can't afford to overhaul just one aspect of their supply chains and ignore less visible areas like product development.