Strategy & supply chains

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Strategy & supply chains

At the risk of sounding overly academic and playing on some age-old cliches, we’re going to explore what it means to develop corporate strategy in today’s post. At some point, we’ll connect this to the broader supply chain and how PortPro is looking to transform an underserved market, but laying groundwork ahead of time is important for context. There are hundreds - if not thousands - of ‘fundamental’ questions a business or firm must ask of itself at all stages of the company lifecycle. Startups are asking about which market their first product should be deployed for, high growth stage companies are asking questions about scaling and sustainability, mid-stage companies are asking about IPO and thinking about M&A, and finally - late stage companies are asking about legacy, private equity, and survivability.

At the risk of being long winded, we’ll skip the examples, but every company at every stage should be thinking about the market they serve in perpetuity and asking themselves; do we serve the few needs of many or the many needs of few? It’s a question overly prevalent in MBA programs, but it remains an important one for calibrating the strategic planning of a company - especially a startup or an early stage high-growth company like PortPro. The question becomes increasingly important when you consider the backdrop by which its being asked; i.e. the supply chain and logistics industry. This fact, above all others, complicates both the question and any potential answer. Anyone who's tried to move cargo understands there are layers upon layers of complexities and no real fix-all.

We all know it - the industry (defined in this case as the ‘door-to-door’ or ‘first-mile’) is fragmented, siloed, and clunky. Drayage truckers, brokers, drivers, and government agencies work exceedingly long hours to overcome obstacles and it is worth noting how dependent the everyday person is on the logistics industry. I digress, as there are a lot of vendors in the space hoping to lend a helping hand and thus is the focus of the post. There are some shining stars that are doing some transformative thinking and have developed a system that derives efficiency. Firms like The IMC Group, PortPro (of course), and Kaleris to name a few are some of these outliers. The point here is that no single firm can do it all - nobody can boil the ocean. There are some trying, no doubt, but the fact remains that no single company operating on the door-to-door segment of the supply chain can do it all. From an industry perspective, managing a TMS (or multiple), a gate solution, operations, sourcing, and periphery products is challenging in its own right, but merging these together adds ever-increasing difficulty given how much coordination and cooperation is required to move goods. Managing personalities, initiatives, products, and people only add to the complexity. Elements for status quo, by measure of corporate strategy, are ever-prevalent in giant conglomerates looking to do it all for any given industry, but especially for supply chains for the reasons mentioned above. Developing a strategy is one challenge, executing is another, and staying out of your own way is yet another.

Back to the ‘fundamental’ question at hand then - should a firm serve the few needs of many, or the many needs of few? The answer is dependent on the industry, the product, and the market. Venmo, for example, serves the few needs of many. It’s not a full-blown banking solution, but it does allow for quick financial transactions and paying back friends. It’s got millions of users, but if it vanished tomorrow, there wouldn’t be a meltdown - and that’s OK, it’s a billion + dollar company (PayPal acquired Venmo in 2013 for $800 million). PortPro, on the other hand, is a company that has to serve the many needs of few. Drayage trucking companies run their entire business on drayOS - and new products slated for market launch in 2023 & 2024 will continue with this trend for brokers, forwarders, expediters, BCO’s, and drivers. The market, as such, is not the entire supply chain, it’s the door-to-door segment of the supply chain. If our products can enable those aforementioned companies operating in this segment, then our opportunity as a company is truly transformative for the industry as a whole. You can change the status quo by owning one segment - albeit a large segment in this case.

Once this ‘fundamental question’ is answered, the remaining architecture for corporate strategy becomes increasingly easier to manage. For example, developing new products and making trade-offs (i.e. giving up some opportunities for a strengthening of core products, competencies, or markets) become far more clear. Maybe in the future this changes or evolves, but corporate strategy is all about figuring out what not to do as much as figuring out what to do so that core products, clients, and industry segments can continue to be cared for and executed against.