Your Value Chain Proposition
You may never have heard about a value proposition. But if you’re a human being you’ve certainly been offered a value proposition at some point in your life.
The value proposition that McDonald’s brings to the marketplace, is enabling a consumer being able to buy a cheeseburger, fries and a coke, anywhere in the world and at any time. But importantly, no matter where you are in the world you know as a consumer, you’re going to get exactly the same thing.
On the surface, the value proposition is on the menu. It’s a cheeseburger, fries and a coke. The underlying value proposition, also the most important value proposition is that McDonald’s enables the consumer, to purchase what they need anywhere in the world, knowing full well what they will receive.
If you were to look at businesses globally at a very high level, they have two main elements. The first is a product being marketed and the second is a supply chain driving the product. Supply chains, globally Is one of the biggest Industries in business in the modern world. It’s also arguable that within those supply chains, logistics management drives the biggest cost.
Within Australia, like all other countries we have an option to deliver our freight by road, rail, sea or air. But due to the geographic nature of Australia, which is mostly to deliver our product by road. In Australia short term history, some of Australia’s biggest logistics companies, have built huge businesses by delivering the product by road. Those same Logistics companies, such as Toll, Linfox and Ceva, understand that their primary value proposition is delivering the product as fast as humanly possible. But importantly the senior management of those companies also understands the underlying value proposition of safety, risk management and abiding by the regulations that are set out in Australian Law. Others in supply chain also know this as Chain of Responsibility.
Logistic management companies have spent and will spend multiple millions of dollars on the safety of their fleet and drivers. Of course, it’s great for business, it reduces risk for their own investments and ongoing financial targets. But most importantly, it’s sold as a value proposition, an underlying value proposition to their consumers.
Major consumers such as Coles, Woolworths and BHP who engage companies like Toll, Linfox and Ceva know full well the extent of their own company’s liability to risk. These are also willing to spend millions of dollars investing in reducing their own legal liability. So when Toll, Linfox and Ceva can prove to prospective clients the level of investment in Safety they offer, Through systems and teams of people, it is easy for them to engage in long-term relationships.
The underlying value proposition that Chain of Responsibility can bring to the marketplace is significant. It is so significant that large companies are already discussing with MAEZ, the ease in decision-making of switching from a smaller carrier to a national Logistics carrier such as Toll, Linfox and Ceva.
For a few decades now the industry has been talking about the potential death of the Aussie heavy vehicle subcontractor. It could well be, that with the lack of willing investment into safety measures and technology that we will soon see the last of the subcontractor delivering bread and milk to fill our retail shelves.