March 21, 2017
Whether you’re an avid basketball fan, a general sports fan or are simply in it for the parties, the third month of the year is an exciting time for many people. Why? Two words: March Madness.
Each year, 68 teams from across the U.S. compete for the National Championship. The event involves 67 games across 14 arenas and 12 different states, all within a 12 day period. It’s not planned in a silo — it takes tons of coordination and human resources to select arenas, arrange flights for teams, reserve hotels, create contingency plans — the list goes on. Some of the logistics are arranged years in advance and others are dependent on last minute variables (wins and losses) and have to be made on the fly.
When you think about the operational lift behind the scenes of March Madness, it’s easy to draw parallels between it and managing a supply chain. There’s a lot to learn about the teamwork and skill it takes to pull off a win.
There are many parts of March Madness that can’t be predicted. While higher seeded teams may have a higher probability of winning, it doesn’t always happen. The nature of a single elimination tournament means that coordinators must be able to react to upsets; take No.11 LSU’s win over No. 1 Kentucky in the Elite 8 in 1986, for example. When games are over, teams are transported from one location to another by plane or bus. Large groups of people are constantly on the move over the course of the tournament, putting stress on labor, equipment and planning.
Agility is critical to March Madness success and it’s critical in managing supply chains. Think of the players as products and the fans as end consumers. If logistics aren’t executed precisely, players don’t get where they need to go, meaning the fans pay for a performance that’s not delivered, and the result is an unsatisfied group of consumers.
In the world of logistics — direct-to-consumer in particular — consumers expect their product to arrive on or before the expected delivery date. When supply chains are rigid, brands are unable to react and adjust to unpredictable moments. On the other hand, real-time data and updated metrics allow brands to create lean business models and more agile supply chains that leave room for managers to respond quickly to changes in business.
Improving your stats is one of the most important things in the sports world. You hear “practice makes perfect” a lot, but “practice makes accuracy” is a truer statement. The March Madness tournament is virtually anyone’s game and if you ask the 1985 team from Vilanova, they can atest to that. As the lowest seeded team to ever win the tournament, No. 8 Villanova defeated Georgetown 66-64. A key elements of their win? An astounding 79 percent shooting performance from the field, with a field goal percentage of 90 in the second half alone. To put that into perspective, NBA teams typically have between a 40-50 field goal percentage.
Winning the March Madness tournament (or a basketball game in general) comes down to points, and the only way to score points is not only to attempt them but to actually make them. Accuracy is a game-changing statistic. The same is true in logistics operations. Supply chain managers are responsible for managing and maintaining accuracy levels for a number of areas including inventory, order picking, invoices, on-time delivery, etc. And while end consumers may be satisfied as long as their particular order is accurate, businesses suffer when accuracy metrics are off. Numbers are powerful when it comes to managing a supply chain, and having this type of accuracy data at your fingertips can significantly improve your “winning” percentage when it comes to overall customer satisfaction and running a profitable business.
Some of the best lessons learned from March Madness are rooted in knowing the competition. In order to advance through the tournament, teams need to know everything there is to know about their competition’s players and strategy. Do they play zone or man-to-man defense? Who is the primary shooter? Who is the best screener? Will they activate a spread offense to protect a huge league and run down the clock? All of these are valuable pieces of information that, when combined, guide a team in developing a strategy to defeating its opponent.
The takeaway here is not to become your competition. The lesson is that by understanding the strategy and key plays of the competition, teams can better position themselves. For brands selling in the B2C space, this is a critical component of sales growth and it helps build customer loyalty. By understanding the competition, brands can better differentiate their offering outside of the product itself.
While product does play a major role in this, there are many other factors that influence purchasing decisions and are impacted by the supply chain. Three common factors are shipping costs, delivery speed and returns options. Take Amazon; the online giant wins by offering low shipping costs, same-day delivery and free returns, and their incredible order volume enables them to maintain their margins. However, many mid-sized players looking to compete against Amazon cannot recreate this offering. Here’s where using an outsourced provider can help brands compete and create additional value through activities like knitting, marketing inserts, branded packaging, and more.
Enjoy the Madness, and I hope your bracket makes it further than mine normally does.