Customer experience is the new battleground. Many companies lack the agile, responsive supply chains to match their growth ambitions. ‘New consumers’ are connected, informed and empowered and continually demand more choice of product, greater flexibility in delivery options and faster service.
'New consumers' are testing supply chain agility
Customer experience is becoming undeniably more important, yet many companies lack responsive supply chains that can continually adjust to fluctuating customer requirements. All too often, manufacturing is based upon forecasted demand, while purchasing and inventory replenishment is driven by current, rather than future consumption patterns.
Not surprisingly, more than a third of CEOs say their supply chains lack the speed and agility to effectively compete with new entrants.
Another 2016 KPMG global survey of 360 senior manufacturing executives reveals that one of the biggest threats to growth is a supply chain that fails to deliver. The growing need for omnichannel strategies will make supply chains considerably more complex, as companies seek to satisfy customers online, by phone and via retail and other physical locations. This can add to unpredictability, as online shoppers, in particular, expect fast service.
US athletic retailer Finish Line Inc, was a victim of this new complexity, as a surge of online orders over the busy 2015 Christmas period overwhelmed its new warehouse management system, which was unable to process orders fast enough. The company lost an estimated 32 million United States dollars’ (US$) worth of sales, which has subsequently led to an announcement that 600 stores are to close – approximately a quarter of its total.
Growth is back in focus for CEOs, but the capability of the supply chain enables them to cash the check
Growth has re-emerged as a major strategic imperative. KPMG’s Global CEO Outlook found that companies’ single biggest strategic objective is to develop new growth strategies. Top-line growth is also, by some distance, the number one priority for consumer executives, yet supply chain and operations are ranked lower down the list, suggesting that organizations may not have the supply chains to keep pace with their ambitions – and, therefore, risk missing out on opportunities to ‘cash the check.’