Mass-customization isn’t coming, it’s here. As more and more large CPG brands try to capitalize on the fickle tsunami of consumer-driven demand, a sea-change is sweeping through the supply chain.
In last-mile product customization where logistics and coordination of packaging, labeling, assembly, kitting, and WIP management are complex to begin with, these changes are wreaking havoc on suppliers that can’t pivot and adapt to accommodate the new style of work.
But not all suppliers are getting tossed about like corks on open water.
Industry leading last-mile product customization suppliers who recognize that these changing conditions mean weaning themselves off of years of ERP-only dependency are finding new avenues for growth and profitability.
In the gaps left by rigid ERP-only solutions, these supply chain leaders are unifying their operational solutions with specialist Software as a Service solutions designed to satisfy and master volatile demand. The interplay between these two solutions and the complementary abilities they provide gives suppliers what Gartner calls ‘bimodal capabilities’.
As a supplier with bimodal capabilities you will be able to magnetize big CPG brands looking to leverage mass-customization demand. The fact that you are not only able to deliver highly variable, short-run, custom packaged perfect orders–on time, and in full–but that it’s your specialty, will set you apart from the pack.
To big CPG brands looking for trusted, agile partners able to support mass-customization based marketing techniques regardless of how complex their needs may be, suppliers with bimodal capabilities have become the de facto solution.
In a nutshell, the two modes of operating are:
Mode 1: Traditional ERPs thrive here. They provide the capability to manage linear business challenges in a stable, predictable, accurate and reliable manner (e.g. managing financial accounting and human resources).
Mode 2: This is where Specialist SaaS vendors excel. They take nonlinear approaches to business challenges, rely on iteration, agility, and speed to navigate problems that entail increased risk–and opportunity (e.g. contract packaging, procurement, expedited shipping).Another way Gartner frames the differences between Mode 1 and Mode 2 is in terms of athletes that run races. Marathon runners train themselves for endurance. Their bodies are light, lean, and toned for the stress and endurance necessary for running a marathon. Sprinters train themselves for explosive power. Their bodies are heavy, muscular and built to generate massive bursts of speed over short distances.
Sprinters are not better or worse athletes than marathon runners, they’ve just trained themselves to practice different sports. Each athlete has developed themselves to achieve a different goal.
In the same way, Mode 1 and Mode 2 offer suppliers different ways of managing work that complement and support each other. Companies that combine generalist and specialist solutions to support different business functions are then able to transition from handicapped dependance on ERP’s alone to a ‘postmodern ERP’ strategy.[/cs_text]
Gartner identifies companies who opt to blend ERPs and SaaS specialist systems to leverage bimodal capabilities as having a ‘postmodern ERP’ strategy:
“Postmodern ERP is a technology strategy that automates and links administrative and operational business capabilities increasingly delivered as cloud or software as a service (SaaS) solutions, with appropriate levels of integration balancing the benefits of vendor-delivered integration against business flexibility and agility.” (Gartner)
With a postmodern ERP solution, Mode 1 and Mode 2 systems work together to help suppliers navigate the increased complexity of multiple people, materials, and data that are introduced when brands implement mass-customization marketing techniques to reach consumers.
Next week, we’re going to explore specifically how SaaS specialists enable postmodern ERPs and why the benefits of specialized, responsive domain-driven solutions are so valuable to suppliers in last-mile product customization.
See how 3PLs, contract packagers and corrugators can win by combining ERP with cloud apps
Jason is a co-founder, CEO and brand ambassador for Nulogy. He is focused on corporate development, executive leadership, and understanding the evolving landscape of Nulogy’s clients. He is also on Nulogy’s board and speaks throughout the industry on the agile supply chain.