About a month ago, I purchased an iPad from the Apple online store. I am greatly enjoying it, thank you. But the inspiration for this post is not the use of the iPad, but the experience of purchasing and getting it delivered to me.
If we look at the Fedex tracking below, we will find that the iPad did not leave from an Apple warehouse in the US, but directly from the manufacturing place in China.
iPads shipped from China directly to end-users in the US
It makes sense, no? Apple is shipping so many iPad’s that Fedex can probably consolidate full shipping containers flying over the Pacific anyway. A US-based warehouse would just add more cost and time to fulfill orders, so there is no reason for not having the contract manufacturer in China drop ship them directly to end users.
When I placed the order, I was able to request custom engraving of my name on the back of the unit. So that unit was mine from the time it left the assembly line and was packaged for the first time.
That level of personalization would not be possible if Apple and Foxconn, its manufacturing partner, were not working intimately together and sharing information about my order.
This term was originally coined by Jack Welch, former chairman of GE, to describe companies that break down barriers between them and their customers and suppliers.
Companies need to embrace suppliers as true partners to seamlessly deliver value to its customers. That is how I, the consumer, get the experience of a personalized product even before I open the box to use it for the first time.
That is true for suppliers, but should companies also embrace its customers within its boundaries, to include them in the value creation process?
More and more, the answer is yes.
IKEA has the smartest furniture assemblers in the business: You
One of the biggest logistic challenges of the furniture business is that products like desks and bookcases are difficult, expensive and fragile to transport when fully assembled.
IKEA, a Swedish company, eliminated that problem by selling furniture in flat packs and having customers to carry and assembly it themselves once they get home.
In this case, the company included their own customers in the value delivery chain and, by doing that, was able to deliver relatively stylish and high-quality furniture at very low-cost and an overall better customer experience. Because delivery of the product is a huge pain point in traditional business, for many customers, the extra work (or fun, perhaps) of assembling furniture is offset by the benefits.
Embracing customers as your brand advocates
The “Social” in Social Media means that influence travels from person to person, following social connections and interactions. Instead of buying broadcast media to reach all potential customers directly, companies need to embrace and include customers as past of the marketing strategy.
If you provide a positive experience to your customers, and provide them with the knowledge and resources to influence others, they will bring their friends to you. That is the essence of social media marketing.
In the 21st century, companies need to break the isolation with supply chain partners to deliver customer-centric product/service experience. They also need to break the break the isolation with their customers so that they can expand their business.
In other words, boundaries of the traditional corporation dissolves. The new company need to see itself as part of an integrated value delivery ecosystem.
Four ways to go boundaryless
- Shift from supply chain to the value chain. Hierarchical and segmented business cannot dream of offering a personal experience to its customers. Apple embraces its delivery partners to deliver me an iPad that is mine from the assembly line and can deliver it to me faster and at a lower cost than traditional hardware vendors.
- Customers are your best partners. There is nobody more interested in the value your company provide than your own customers. IKEA revolutionized the furniture business by designing products with the value delivery chain in mind and empowering their customers to participate in the process.
- Cultivate Transparency in relationships. Neither Apple or IKEA are particularly good examples of general transparency, but they do it where it matters. Your company must give partners access to the information they need to take responsibility for the customer experience. Arm customers with the information and resources they need to become brand advocates.
- Embrace Social Technologies. Free flow of information enabled by social technologies is the main catalyst to making boundaryless companies more competitive than traditional ones. Customers can talk to and influence each other through Social Media. Organizations can let information flow horizontal in real-time (not hierarchically, in monthly reports). Let it happen and gain a competitive edge.