Being new to the logistics industry, I am continuously learning surprising tips and tricks toward 3PL success. From the careful steps taken to fulfill orders here at TQS, to the supply chains behind manufacturing and distributing products, we all have nuggets of expertise that make up the industry Best Practices. When you think about successful supply chains, I’m sure your immediate thoughts go to Apple and Amazon. Yes, those household brands are the leading global supply chains. However, there are some brands dear to you and me that you would have never guessed to be a role model of supply chain success, let alone their stories of how they got there. The most successful supply chains are marked by their excellence in revenue, innovation, and advanced technology. Recently we have seen a rise in trends particularly in technology and overall processes, which greatly increase performance and sustainability. A few surprising supply chains are leading the charge.
Intrigued? Here are the top role models of the supply chain industry and their secrets to success.
Ranked by Gartner Research as the second top global supply chain, is the great fast food empire McDonald’s. Most of us think of McDonald’s as an inexpensive delicious meal, but would you have guessed that companies want in on their secrets to supply chain success? Despite McDonald’s ever-changing menu to reflect the emerging trend towards healthy living, the golden arches have been sitting in second place on Gartner’s list since 2013. With over 36,000 restaurants across 100 countries and an average of 69 million customers per day. Their consistency in operational excellence is a necessity. McDonald’s prides itself on a supply chain system generated by partnering with businesses that share a common goal: success for one, success for all. McDonald’s recipe for success includes collaborated council meetings, held to share innovations of new products and to improve upon current processes. As of now, each of the restaurant’s distribution centers provides logistics, warehousing, and transportation services, to make at least two deliveries to each restaurant per week. With collaboration and avid communication, McDonald’s is able to run their operations in a smooth and controlled manner to keep their business and their customers smiling.
Related: What is LTL Shipping?
What surprised us? Not only do McDonald’s operations strive for excellence, but so do their freight trucks. Improving on sustainable energy in several countries, McDonald’s freight trucks operate on 100% Biodiesel from recycled vegetable oil. By reaching milestones in the UAE for the widespread use of recycled biodiesel, McDonald’s innovations in sustainability make way for a greener future.
We love Starbucks just as much as supply chains want in on their secrets to success. Ringing in at Gartner’s tenth place for top supply chains, Starbucks is recognized for supply chain excellence. As avid caffeine users, we don’t often stop to think about where coffee beans come from – we just worry about whether or not it’ll give us a boost of energy, and if it tastes good while doing so. In reality, the journey of the bean to a steaming cup of blonde roast is a long and complicated one. With over 25,000 retail stores worldwide, Starbucks carries out more than 70,000 outbound deliveries to their stores in just one week. Across six continents, Starbucks manages its supply chain and logistics networks on one centralized system, making their chains effective and under complete control. The demand for Starbucks has been growing since its first profitable year in the 1980s, meaning the demand for coffee beans has also skyrocketed.
What surprised us? Not only does the demand for coffee influence the way their supply chain processes are managed and carried out, but it has also influenced Starbucks and their goal towards ethical sourcing. With strict supplier guidelines, Starbucks keeps up with their approach towards an organic, free trade brand. There’s no wonder why it made Gartner’s list, but it sure is surprising to think of our beloved coffee as a top global supply chain.
We’re all familiar with the rivalry between Coca-Cola and Pepsi, but does the rivalry remain when PepsiCo Inc. is ahead in terms of supply chain success? What surprised me most was not that PepsiCo had made Gartner’s list of top supply chains of 2017, but that it had outranked its competitor, which dominates the market. So, how is it that Coca-Cola is caught in PepsiCo’s dust trail when people continue to prefer Coke? Well, for starters, while Coca-Cola manufactures and distributes a wide variety of beverage brands, PepsiCo is much more diverse in its offerings. Acquiring Frito-Lay in 1965, and many others along the way, PepsiCo now has 22 billion-dollar brands; 14 in beverages and 8 in snacks. PepsiCo is more than just a maker of carbonated beverages; in fact, much of the company’s success is due to its partnership with still beverages and food brands, such as Lipton, Tropicana, Quaker and Doritos. And that’s just to name a few. Aside from the brands that make PepsiCo a leading supply chain, the corporation follows five priorities for success: brand building, innovation, execution, productivity, and driving cash returns.
What surprised us? In the more recent years, PepsiCo has generated popularity due to its prioritization of innovation. This includes environmental sustainability, advances in technology, and the digitization of their supply chain. The multi-billion-dollar company prides itself on seeking innovative ways to reduce their impact on the environment, all while reducing costs in operations. From limiting water usage, reusing recycled waste, and implementing electric trucks, to leveraging the Internet of Things and 3D printing, PepsiCo has transformed itself entirely. Yes, Coca-Cola may win most people’s hearts, but PepsiCo sure has mine.
This multi-billion-dollar company has once again dominated the market while leading a supply chain so successful that its competitors want in on their just do it mentality. With an average of 120,000,000 shoes sold annually, Nike continues to be the world’s leading sports gear supplier. Although much of Nike’s revenue comes from their world-renowned shoes, the company also designs and sells sports equipment and apparel. From selling shoes out of the trunk of what founder Phil Knight referred to as his “vomit green” Plymouth Valiant, how did Nike become so successful? Surprise! It’s their supply chain.
Founder and CEO Phil Knight envisioned a company in which profits take precedence over costs. By importing high qualityathletic shoes from Japan at a low cost and reselling them with a branded image, Knight made this possible. Now, the iconic swoosh is the most recognized symbol across the globe. Pretty impressive for a guy who started with a car as a store, I’d say. Knight first purchased shoes from Japan in 1964. The designs and materials were not his own, but it was inexpensive and seemed like a perfect way to achieve his vision.
What surprised us? What surprised me most about Nike is how Phil Knight overcame the obstacles that he did, making Nike what it is today – the frontrunner in the athletic shoe industry. In Knight’s impressive memoir Shoe Dog, he tells the story of hiring a spy to work full-time inside the Onitsuka Export Department, where Knight had purchased his running shoes for resale. Late deliveries, wrong orders, plots to breach contract, and paranoia lead Knight to find out what really happens behind closed doors. By building a company from the bottom up, it’s almost impossible not to be shocked at all of the hardship, laughter, and endurance that paved the way to make Nike a leader of supply chain excellence.
In terms of Nike’s views on renewable energy, their logistics campus in Belgium sources its energy entirely from wind, solar, biomass, and geothermal innovations. Nike hopes to increase biodiversity with green spaces and reduce fuel emissions by having fewer trucks on the road. To Nike, sustainable innovation is best for the business and for the planet.
While these global companies are vastly different, they do share one thing in common; an exceptional supply chain. To succeed, supply chains must have advanced communication processes and technological integrations. Without these systems in place, failure is inevitable. At TQS Logistics, like these impressive supply chains, we strive to give our clients and their customers the best service by masterfully managing the supply chain from point A to point B (even point C, D, etc.)!
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