|By Martin Verwijmeren||
|March 22, 2017 03:00 PM EDT||
Why You Should Build Your Supply Chain from the Customer Up
Satisfying customers and winning their loyalty is the foundation that every successful business is built upon. Delivering a consistently excellent experience builds a level of customer intimacy that will set your business apart from the competition. Consider that 80% of your company's future revenue will come from just 20% of your existing customers, according to Gartner.
The supply chain landscape is shifting, as customer expectations soar and new services and software bring greater complexity. There's a great deal of pressure to maintain operational excellence, integrate disruptive new technologies, and innovate for a superior customer experience. Tying these disparate threads together requires responsive Supply Chain Orchestration (SCO).
Finding the right balance
"There was a time when supply chains could settle for trade-offs: cost or speed, service or quality, flexibility or reliability. Those days are long gone," predicted Paul Keel, Senior Vice President, 3M Supply Chain, talking to Forbes. "The equation has shifted from an imbalanced ‘or' to an equilibrium centered on ‘and.'"
Crafting an optimal customer experience that not only meets, but ideally exceeds expectations, is difficult when there are so many moving parts and players involved. Consistency and reliability are requirements for a customer-centric system. However, companies must remain agile, so they can adapt to variations in demand, changes in the market and supply volatility. None of this is possible without real-time visibility and control.
All companies want better supply chain visibility. The average company has seven Enterprise Resource Planning (ERP) instances and little confidence that ERP is going to close the widening gaps between the perceived importance and the actual performance of most supply chain elements, according to Supply Chain Insights research. One supply chain leader said, "Today, it is much like chewing gum, bailing wire and a shoestring."
Supply Chain Orchestration (SCO) can bridge the gaps between retailers, wholesalers, manufacturers, and logistics service providers. It can bind your systems, suppliers and service providers together to bring clarity and understanding. You need real-time oversight of the entire life cycle before you can find the optimal workflow. Establishing real-time visibility is a prerequisite for creating a better customer experience, because it empowers you to integrate the flow across multiple activities, services, and business units.
From visibility to control
Once you have established end-to-end visibility, you can start controlling your supply chain to meet customer demand and then measure performance against expectation. SCO highlights problems immediately as they arise, and offers the ability to build in automated rerouting, so you never let a customer down. Over time, the data you're collecting about your supply chain can serve as the basis for process optimization and predictive analytics. An accurate cost-to-serve analysis makes it easier to align your efforts and fulfil customer needs.
Find out where the weak spots are. Learn which suppliers and services are working well and which aren't. When you want to expand into a new market, or offer a new delivery service, SCO can help you to configure the required flows and understand the risks, the costs and the benefits involved. There's no need to take a leap of faith when you can see the cold hard facts. These kinds of actionable insights enable your supply chain to evolve, grow, and improve.
Customer chain control
Most companies build supply chains from an operational perspective. They rely on an ERP system to handle commercial orders, production, inventory and finances. They employ a Warehouse Management System (WMS) to deal with receiving, storage, and packing. They rely on a Transport Management System (TMS) to execute orders and move products around. Each element is focused on efficiency in its own sphere, with no oversight, no insight and little flexibility.
Where do the needs of the customer figure in all this?
If customer satisfaction and loyalty is your primary goal, then the customer must be front and center. If you truly want to deliver astounding service for your customers, then every customer order must be viewed as an individually optimized supply chain. It still needs to be fully configurable based on capacity and costs, and supported by business rules and learning algorithms, but the perfect blend of service should be driven by the ultimate customer requirements.