Recent ongoing slow down in economy is because of reasons, some are structural while others are cyclical.But following two reasons are distinct and profound and gives insight into why we could not gauge the Current Economic slow down.
1. Minimization is not always optimization: Increased length of Value chain: To reduce the cost, manufacturers are sourcing the sub components from far off places. Distributional channels are spread across geographies. The last nod of value chain is delivery , which is only focused about delivering the product at doorstep of the customers. This value chain has become so long that any feedback from the customer to manufacturer, reaches very late. and by the time we know we have produced surplus, which feels like knee jerk reaction to the sales team.
2. Face Less Business- Diminishing interactions with Customers Interaction between the supply side and demand side is becoming near to NIL. Thanks to AI/ Digital world/ Whatsapp/ Online purchase. Here technology is tracking everything about the transaction but it is not noticing anything about interaction. It went to what part but could not track why part. Technology was not meant for interactions so it just did what it was suppose to do- The tracking. This is the reason dealers/ retailers could read the mind of the customer as purchases were happening online and there was no mechanism to understand the customer's mind, his anxieties, his fear, and above all his sentiments of purchase.
Summary and way forward
These are two important reasons, which should not be ignored. We must reflect upon our business models to streamline the feedback mechanism in "Large Value Chains" and "Increase the personal interaction between the retailers and customers". Digitization and Technology must support the purchase but not replace the human interaction.
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