How to create a customer-centric supply chain
It’s no surprise that the modern supply chain focusses on processes and technology; two key pillars of establishing an efficient and effect service.
But the third pillar which is overlooked more than you may think is people. In today’s connected world it’s absolutely vital to understand your customer, their motivations, changes in their behaviour and how you can improve their experience.
So what do businesses involved in the supply chain need to consider?
For many, involving the customer in more processes involves a culture change of sorts. It’s like trying to change from a manufacturing organisation to a supply chain organisation – you have to carefully consider how to achieve your goals.
An organisation that only focusses on itself and its own role in the supply chain is very different to one to that focusses entirely on what the customer wants - take Amazon for example - a lot of changes are required to complete this switch.
The good news is that technology can help businesses to achieve these goals. Most will have invested in some form of technology to help their business, and in some cases this initial investment can help with creating a customer-centric outlook. But it’s about creating value for the customer, rather than simply ensuring you meet delivery targets, that many business overlook, and therefore miss out on the rewards.
One thing is certain about today’s customer: Whether they are a business or a consumer, you cannot control their behaviour or how they will choose to do business in our omnichannel world.
We’ve established that it is no longer enough to just be demand-driven; we also need to be market-driven. This can make forecasting a challenge, but with the right data from POS, orders, forecasts, weather forecasts, traffic reports, market share reports, and customer sentiment, the decisions can become easier to make.
The customer, or consumer, is more demanding than ever. They expect next day delivery, if not the same day, and this means that businesses need to think about demand differently. To respond with speed, managers need detailed information that it can be aggregated and analysed to service a channel, market sector, customer, and specific order.
Most customers can also now buy through numerous channels at any time, on any device. That means even more data can be collected to improve processes, but it needs to be captured and harnessed correctly, and in our experience few companies say they know how to extract meaningful insight from the data available to them.
The challenge is that all logistics processes are expected to be as snappy and flexible as those demonstrated by leading companies such as Amazon. Same day delivery (or even within two hours), click and collect, drop collection and inner-city pickup and delivery must all be considered, and that’s before we consider returns!
Retail businesses are really leading the way with creating a connected customer experience. Many are bringing the online experience to the store and creating a seamless journey for their customers. Of course, this also means changing logistics processes to be able to ship orders from anywhere, whilst also minimising inventory and maximising customer service.
Many companies are also capturing telematics and IoT signals from delivery vehicles to optimise and speed up the transportation process. This is only possible by combining transportation and warehouse processes and by building smart management solutions that make sure all loading and unloading runs smoothly and without delays.
Sense and predict
Leveraging data to sense and predict customer behaviour and prepare accordingly will help to make better decisions about where to place inventory. Predicting the right products and offers as well as right amount of inventory and keeping it at the right place at the right time will not only increase customer service, but also improve efficiency and keep costs down.
To achieve this, agility is key. Supply chain businesses need to be responsive to demand and have the flexibility to adapt. A better customer experience will allow these businesses to grow through customer loyalty, as well as capture new demand. Aligning planning data, processes, and execution across the short- and mid-term and tightly integrating customer demand into the supply network in real time, enables smart allocation of resources and makes it simple for managers to prioritise demand, customer, and channel needs.
Companies must not only understand the demand from their customers, but also the demand from their customers’ customers, harnessing and compiling a vast amount of data from their network to facilitate decision making across the supply chain, to sales and marketing.
Becoming a leader will involve creating customer-centric processes by harnessing order, forecast, point-of-sale, channel, and social data to sense both short-term and long-term demand.
It’s an exciting time to be involved with this evolution in the supply chain. Connecting data with R&D, manufacturing and supply processes will enable the design, production, and delivery of the most profitable solutions and services for the customer, maximising satisfaction.