A great deal has changed since Oracle CEO Mark Hurd wrote and published The Value Factor in 2004. At the time, Hurd was CEO of NCR Corporation, Facebook was a dorm-room startup that barely registered on MySpace’s radar, and the iPhone was still years from its first release.
Supply chain management was certainly a critical topic for product-focused businesses in 2004, but since The Value Factor’s release, it’s become almost boardroom gospel. A number of Hurd’s statements in his book presciently anticipate the importance of supply chain mastery for modern product-focused enterprises. Hurd was certainly ahead of the curve when he wrote that “Globalization, the Internet and the sheer volume of product choice mean that customers can change allegiances with ease.”
But just because they can, doesn’t mean that customers will change their allegiances. Hurd also noted that “Customers need to see one consistent company in every channel, division or branch.” Corporate consistency — from public branding and messaging, to sales and customer support, to the supply chain that keeps everything moving — goes a long way towards building up goodwill with customers and getting them to stick around for the long haul.
In The Value Factor, Hurd also pointed out that “We need to be faster and leaner, but we don’t need to change our business basics.” When you’ve got a great business that customers love, you don’t need to turn it into a different business. You just need to keep getting better at what your customers already expect you to do well. In other words, be consistent, but don’t get complacent.
Companies that can provide a consistently high-quality product experience are far more likely to get their customers to upgrade from one model to the next. Even “small” supply chain problems can rapidly compound at scale, and even the world’s largest hardware companies have grappled with this issue in recent years.When you’re working with cutting-edge technology that requires the precise interaction of dozens of miniscule components, and you’re trying to do so with millions of units, your margin for error can be nearly invisible. As Hurd pointed out in The Value Factor, “A single good procurement decision can save millions of dollars.” On the other hand, one poor procurement decision can easily cost you millions of dollars.
No company is perfect, but even the best companies can improve their supply chains with the right supply chain management (SCM) systems. Modern SCM systems often integrate with a more comprehensive enterprise resource planning (ERP) solution, which can give those handling procurement or manufacturing real-time insights into available resources, customer demand, logistics, and other critical business data points. This allows companies to reduce waste and speed time-to-market for any product, whether it’s a high-tech smartphone or a head of lettuce. Utilizing SCM applications that work well with more comprehensive ERP systems can provide all stakeholders with a greater level of real-time insight. And, as Hurd pointed out in The Value Factor, “The better insight we have into our businesses, the better oversight.”
Cloud-based SCM software also allows companies to exert far more precise oversight over their supply chains than might have been possible before widespread broadband connections. Now, a plant manager in Peoria might be able to urgently requisition new parts from a supplier in Paraguay and have them packed for an international airmail shipment that same day. A surge in demand for a particular product on the West Coast might be addressed by rerouting shipments from warehouses in the Midwest within minutes of uncovering the issue.
While cloud-based SCM solutions weren’t well-known when Mark Hurd published The Value Factor, he correctly anticipated in 2004 how they might improve supply chain management professionals’ working lives. Connecting your supply chain to the cloud can provide better oversight, more meaningful insights, and more rapid responses to any challenges that arise. Research and real-world data bears this out: an IDC study of Oracle SCM Cloud customers found that they had an average five-year ROI of 267 percent on their SCM system implementation, as well as 28 percent greater productivity from their supply chain teams — among other benefits, which you can see in our recent blog post.
For many companies, a rock-solid supply chain can make all the difference between phenomenal worldwide success and rapid obsolescence. Mark Hurd understood that in 2004, and what he wrote in The Value Factor underscores much of what we expect from the modern supply chains of today: they must be connected, consistent, and comprehensive to successfully serve the needs of worldwide enterprises with millions of demanding customers.