In the 2022 CEO Summit, Shekar Natarajan, Chief Global Supply Chain Officer at American Eagle Outfitters and CEO of Quiet spoke with Stacey Widlitz, President, SW Retail Advisors and On Air Contributor, about supply chain management and how we can change that.
The issue of supply chain management is one that has most, if not all companies concerned. Everyone is trying to find ways to avoid problems with supplies, with distribution and with customer satisfaction. Shekar Natarajan has an answer to this issue. What he is trying to do is “we are intending to create is what America gave me. A chance and an opportunity to level the playing field”.
The major companies like Amazon and Target are at a completely different playing field because their resources are unmatched. Even if a company pours multiple resources into their capital, the reality is that they will never be able to compete with any those giants. No company has a large enough scale. For example, 1 in every 153 people work for Amazon today. That percentage in itself is enough to show how astronomical the numbers are.
Walmart and Amazon do not share the same DCs and transportation resources as the smaller companies, they are at their own playing field. Shekar Natarajan and AEO found a solution to benefit the smaller companies that are competing for the same set of resources. Instead of having multiple packages show up at your doorstep like a cluster, companies can work together and make sure one package is delivered to the customer, even if he has ordered from multiple channels.
“The prices are set. The capacity is scarce, so supply chains are only going to stay disrupted”. This is where you can create change and solve the problem with profit and purpose.
More specifically, what Shekar Natarajan intends to do is “by building scale and efficiency, we are actually creating a very predictable point to point move”. This will create predictability for the sellers and the buyers alike. This type of efficiency is very powerful and can unlock multiple possibilities.
Shekar Natarajan ended with a thought that is the core of this issue and the solution consequently. “Supply chains are not a competitive advantage. Supply chains at hyperscale are a competitive advantage. Right, so you have to really think about like how to get to the scale. And without that scale the future is not so great”.
For the past 3 and a half years this idea has been thought out, built upon and now it is slowly being executed with success. “It is not a pipe dream”, as Shekar Natarajan says but a very real solution to the issue of supply chain management.