Creating a Customer-Centric Supply Chain

Spend Matters welcomes this guest post from Richard Howells, vice president of extended supply chain management at SAP.

In today’s highly competitive marketplace, it’s more critical than ever that customers are at the center of all aspects of the business. While this has long been the case, it has become increasingly difficult in recent years for companies to meet customer expectations. That’s because customers are growing more demanding and educated. They expect to have what they want when they want it. Companies that hope to stay competitive in this customer-driven world must adapt by changing the way they sense and shape demand, design and make products, and deliver based on omnichannel execution.

Let’s take a look at three best practices that executives can implement to create a more customer-centric supply chain that will far exceed customer expectations.

1. Fulfill Orders in Multiple Channels

Customers are buying via multiple channels, from mobile devices to in-store, and they are using whatever channel is most convenient to them at any given time. Just as they are using various channels to buy and place orders, they expect these orders to also be delivered via multiple channels. We are seeing numerous examples of omnichannel delivery methods in the retail industry in particular. Wal-Mart, for example, allows customers to buy online and pick up in-store.

With omnichannel ordering also comes the need for faster delivery. Because speed and convenience are major factors in why customers are choosing omni-channel ordering, they, in turn, need a delivery process that matches. That’s why companies like Amazon have implemented one-hour delivery. And ridesharing companies like Uber have made it possible to get picked up at your doorstep within minutes.

2. Leverage Data to Predict Supply and Demand Fluctuations

There is so much data available that it can sometimes be difficult to know what to do with all of it. However, when strategically analyzed, this data can yield critical insights that can help executives predict ebbs and flows in supply and demand, to ensure that customers are able to get their orders when and where they need it. Strategic data analysis will allow your company to predict offers that are best suited for each individual customer at the right time to improve customer service and allow you to reduce stock shortages and unnecessary inventory, increasing revenue. Target, for example, recently announced it would be making a multibillion-dollar investment in its supply chains, in part to reduce stock shortages. This move highlights the realization that companies are having that they need to improve their supply chains to better sense changes in supply and demand and respond to them in real time.

It’s important to remember that it’s not enough to be able to predict changes in supply and demand. Executives must also be able to the respond appropriately. With this comes the need to be agile in response. When demand signals point to a new buying trend or a dip in the economy, it’s vital that executives are able to make strategic changes at the drop of a hat.

3. Comprehensive View of the Full Demand Network

The convergence of multiple buying channels means that companies need to have a more comprehensive view of the full demand network. A siloed view will simply not work. Instead, organizations need to take into account data from all aspects of their business, from the customer to the supplier. It’s no longer enough to simply sense and understand customer demand. Companies must also have an understanding of their customers’ customers’ demand and so forth. The more data that can be harnessed, the easier it will be to sense supply and demand signals that will indicate changes in customer needs, helping you better service the customer.

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