There is growing evidence that companies adopting demand-driven supply chains enjoy increased sales, reduced operating expenses and improved working capital — by focusing on customer experience.
There are six key considerations for organisations seeking to create a more customer-focused supply chain:
Visibility: Companies with real-time information on physical and financial flow are far more likely to be in the top quartile for revenue growth and margin. Yet only a small proportion (13 percent) of manufacturing executives claim complete visibility of supply and capacity information across (customers), suppliers and logistics partners.
Outrunning the pack: Customers are ever more demanding. And they can change their requirements at a moment’s notice. The world is also less predictable, due to factors like climate change and varying energy availability.
Flexibility: Organisations need to plan and be ready for possible twists and turns, like sudden market up- and downswings, supply disruptions, or quality issues.
Agility: An ability to respond/adapt to a completely unplanned external circumstance. A shock like an earthquake, or a major crop failure, may cut off traditional sources, testing an organisation’s capability to mitigate those circumstances. The report shows that there’s some way to go: more than a third of CEOs say their supply chains lack the speed and agility to effectively compete with new entrants.
Not all customers are the same: Marketing has long-embraced segmentation, but the supply chain is only just waking up to the importance of recognising varying customer needs. By adapting the supply chain to suit these different segments, companies can optimise profitability and in parallel better meet customers’ expectations.
Organising for success: Many global companies have large, complex structures with multiple decisions made daily that affect the supply chain, such as forecasting, product development, and sales and marketing strategies. To keep all these in harmony, you need common global standards and governance.
Fuelled by the fast pace of technology, customer demands are becoming more extreme by the day.
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