Customer-Centric Supply Chain In A Digital Age: How Leaders Are Different [Webinar Recap]

Warren Miller

Every day, more and more devices are connected to the Internet. In fact, according to Cisco, the number of these devices exceeded the number of people on Earth in 2010. By 2020, Cisco predicts that there will be more than 60 billion Internet-connected devices in use.

This shift demonstrates how much – and how quickly – the world is changing. The digital economy is unyielding, and this revolution will impact us all.

Richard Howells, global vice president of Extended Supply Chain at SAP, recently moderated an online panel discussion featuring Kevin O’Marah, chief content officer at SCM World, and Hals Thalbauer, senior vice president of Extended Supply Chain at SAP, on how supply chain organizations can succeed in today’s digital age.

Today’s customer-centric supply chain enterprises need data to succeed

Kevin kicked off the conversation by discussing SCM World’s recent research on how digital technology is affecting the way businesses approach customer-centricity, a critical driver of strategic change in supply chain.

In order for the supply chain to continue delivering customer value, companies must be able to extract and capitalize on data. However, according to SCM World research, many organizations lack the capabilities to access this valuable information.

Kevin says a majority of survey responders “see [customer insight] as must-have information and yet pretty difficult to get.”

In fact, only 16% of those surveyed believe that data is easy to access.

Arguably, the most alarming statistic from SCM World’s research regarding data access involves insight around indirect customers: A whopping 34% of supply chain organizations say they don’t have any data at all. Furthermore, they don’t seem to care, as they deem data “not valuable.”

Obviously, today’s digital leaders don’t see things that way. During the presentation, Kevin listed several successful companies that are gaining valuable information in creative ways. Xerox, for example, is using connected devices to identify how often printers, fax machines, and other products need new ink cartridges. This helps the company to better deliver on its fulfillment promises.

A strategic approach to customer-centricity

Two of the most effective strategies in enabling customer-centricity revolve around:

  1. Customer segmentation: This provides clarity on what customers value.
  1. Customer profitability analysis: This captures data on order frequency, order quantity, and order channels, as well as how orders impact distribution.

Those that concentrate on customer segmentation and customer profitability analysis – also known as cost to serve or buy-behavior analysis – say they have fresher, better, and more valuable data, which, no doubt, helps them in their efforts to become more customer-centric.

As an example, Kevin talked about Schneider Electric, which performs customer segmentation to deliver various value props.

“Segmentation forces Schneider to think differently about what demand and supply data it needs to profitably answer questions and process different order requests,” he says.

Hans agrees that segmentation is critical in today’s increasingly digital world:

“In order to succeed,” he says, “segmentation is key.”

Putting the right processes and/or technology in place is critical

Of the 155 executives who participated in SCM World’s research study, 20% say they have “good” omnichannel sales processes and/or technology in place.

This number is relatively robust compared with those who say they have “good” omnichannel return capabilities; only 12% of survey responders could claim that. Worse yet, 55% say they have “weak” omnichannel return processes and technology.

Needless to say, organizations with better omnichannel processes and/or technology possess more valuable customer insight – so they’re better equipped to succeed in a digital world where supply chain organizations must be customer-centric.

That’s why it’s so important for companies to invest in, or at least experiment in investing in, omnichannel processes and/or technology. Failure to do so could be a big mistake.

Begin your customer-centric supply chain journey with these four tips

Companies without visibility into valuable customer data risk falling behind.

After all, as Kevin put it, “They’re running around in the dark.”

Fortunately, SCM World developed some tips, based on its research, on how to go from a mere supply chain organization to an innovative, customer-centric supply chain enterprise in four easy steps:

  1. Digitize your supply chain: Through digital transformation, you can automate processes, enable more accurate reporting, and identify untapped sources of value generation. These added capabilities would have a tremendous impact on your customers – and your bottom line.
  1. Make use of imperfect data: No data is bad data. While “perfect” data would be ideal, even “imperfect” data can be useful.
  1. Collaborate with your customer care group: Your customer care group possesses valuable insight on buyer satisfaction, product quality, service, and delivery. By collaborating with your customer care group, you can improve your existing supply chain operations, so returns decline and customer satisfaction rates rise.
  1. Create a menu of supply chain services: Data analysis on order frequency, order quantity, and order channels can provide your business with a clear direction on what type of supply chain and distribution services you should be offering your customers.

Begin your transformation today. Learn more about becoming a customer-centric supply chain in today’s digital age by listening to the full webinar now or read the SCM World White Paper, Customer-Centric Supply Chain, to under how live data can improve all aspects of business performance and adapting to the unexpected to serve omnichannel customers better.

About Warren Miller

Warren Miller is a senior writer with more than 10 years of experience. He has written extensively on the topics of marketing, customer engagement, commerce, sales, HR, and supply chain.