Embedding Customer Expectations Into Your Operational Supply Chain Strategy

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Embedding Customer Expectations Into Your Operational Supply Chain Strategy

To get ahead in the modern supply chain industry, you need to know which skills actually translate to success.

But pinpointing those skills can be a challenge.

This is largely due to the amount of hype that exists around certain ideas or skills.

Sometimes this can create situations where you’re unsure of how much substance there is behind certain buzzwords, and therefore where to focus your attention.

To help accurately understand which skills are really the most important, Bastian asked our supply chain industry network what they thought are the most critical skills needed to be successful for the modern supply chain professional. (You can get the full findings here)

Our research shows that despite all of the recent hype around the importance of innovation, it was not actually the most important driving factor for a supply chain business.

The number 1 skill that was voted as most critical to the supply chain industry was understanding customer expectations.

 

Everyone agrees – understanding customer expectations is critical.

During our research, we asked supply chain professionals – from CEO’s to individual contributors, a number of questions around what skills they thought were most important to the supply chain industry.

The results differed between roles. For example, CEO’s are much more consistent in their opinions on critical skills, while managers are more inclined to be more opinionated towards one skill or another.

This suggests that CEO’s are more concerned with the bigger picture and the overall result of combined skills, while managers are more concerned with specifics and tend to overrate the importance of one particular skill.

However, across every level from individual contributors to CEOs, the skill considered the most critical was understanding customer expectations.

This acknowledgement of its importance was also reflected in the latest PwC Global Operations Survey, which found that 63% of operations leaders said that understanding what customers value is a challenge for their companies’ operations.

A recent Retail Industry Leaders Association Study also concluded that 56% of companies will increase spending on supply chain process improvements this year, and the percentage of executives reporting that they’re prioritising enhanced customer service as their main supply chain strategy has more than doubled since 2015.

But how do I keep up with shifting expectations?

“The days of telling customers what to expect are behind us…customers’ expectations are that your supply chain be personalized to their personal expectations.” – Jim Tompkins, CEO of Tompkins International

While most people running supply chain businesses clearly recognise the importance of focusing on customer expectations, this still presents some real and complex challenges.

This is because it is incredibly difficult to strategize business goals and operations if you need to address individual client expectations. Especially when you consider that even an individual’s expectations might shift markedly over time.

So, with customers becoming increasingly demanding in their expectations, how can any supply chain CEO develop a business model that will ensure strong profitability while also keeping its clients’ needs met?

Translating customer expectation into operational strategy

Understand your customers

If you’re able to identify what the customer wants, you’ll be able to make strategic decisions for your business based on that. You’ll need to collect customer data (or it may already be available to you) and once you have a good idea of what customers value and what their goals are, you can start designing effective strategies.

Prioritise customer feedback and make sure you have processes in place to understand the level of service you’re providing at each point along the supply chain.

Poor service at one point has follow on effects to the end customer and damages your reputation. Having systems to track customer feedback enables you to set agreed goals with current customers, create more personalised solutions, and improve your prospects for sourcing new customers.

Remember to always operate with your end customers’ needs in mind.

Coordinate across functions

If you want to be able to execute on what customers care about then you’ll need to be able to coordinate across your internal functions. It’s important to update your operations model so that it fosters an environment that supports collaboration and avoids difficult processes that ultimately make your operations less efficient.

You can also outsource many services to a trusted 3PL. If you don’t have the strongest capacity in a given area, whether it be technology systems, contingency planning, or inbound or outbound transportation, then you can improve your level of service significantly by outsourcing. The leaner and more efficient you are, the faster and cheaper service you can provide to your customers.

Be flexible by collaborating

In the past, supply chains were designed to do one or two things very efficiently at high scale. But in these more technical and rapidly evolving times, it is increasingly important to develop flexible supply chains that can adapt to unforeseen events. If an out of the blue event occurs, if you don’t have a robust network of people you can draw on, then your level of service will falter.

One of the best ways you can achieve this is to improve your relationships with your logistics providers. The stronger your rapport with your suppliers, the more effective you will be at resolving issues or overcoming challenges – which ultimately ends up affecting the customer.

Having strong relationships with your suppliers and 3PL providers will give your business an edge because the more collaborative you are the more flexible and responsive you can be. And ultimately that translates to improved customer service from end to end.

Keep an eye on the bottom line

It’s important for business leaders not to get overly distracted with incorporating new supply chains, new tech or new products and services. Your operations should be tailored to make sure you are delivering the best value to your best customers for the least cost. Good business leaders know what their customer values, as well as the value of each customer, to their bottom line. When these are in balance, then everyone wins.

Just make it work

There is no doubt that customers are more demanding now than in the past.

This is a natural consequence of the tech age that we live in where the internet has given us access to answers in seconds and the ability to click to buy in an instant. But try not to overthink your processes too much and remember that at the end of the day, the customer just wants it all to work.

So try to think of your supply chain in terms of how your customer would ideally view it. Straightforward and seamless. Is your inventory readily available or tied up? Can you ship items or deliver your services quickly? Can you give guarantees or commitments to your orders?

At the end of the day, to be successful in today’s supply chain, you need to understand your customers and you need to provide fast, reliable performance across your entire business. This efficiency will translate into timely and affordable services and this will lead to the long term satisfaction of your customer’s expectations.

To gain a more detailed understanding of how you can meet your customers’ evolving expectations, you should grab the full report here

By | 2018-08-16T12:43:45+00:00 August 16th, 2018|Supply Chain News|Comments Off on Embedding Customer Expectations Into Your Operational Supply Chain Strategy