The Key To Customer Centricity: Creating A Touchless Supply Chain

Martin Barkman and Markus Rosemann

Part 6 of the “Digital Supply Chain of One” series

You typically ignore electricity in your house – until it goes out, of course. That’s because it’s touchless, meaning it runs on its own.

Imagine managing a touchless supply chain – one where your digital systems automate your planning and logistics processes and employees intervene only when absolutely necessary.

Sounds impossible, right? It’s not.

Innovative technologies, such as the Internet of Things (IoT) and machine learning, present opportunities for companies to create a touchless supply chain. And by optimizing planning and logistics through automation, businesses can focus on their ultimate goal: satisfying customers.

Get to know your customers better than ever

The first step to delighting your customers involves gaining an accurate picture of demand.

In my blog “Four Supply Chain Strategies To Drive Digital Transformation,” I mentioned that predicting demand through forecasting models often results in medium- and long-term plans. But with customer expectations rising and planning cycles shrinking, it’s become more crucial than ever to develop short-term plans.

How can you manage that?

The trick is running your organization – no matter its size – like a small business.

Picture owning a small-town mom-and-pop grocery store. You know all your customers personally. When they visit, you can greet them by name and even pick out the items they usually buy.

Large organizations with hundreds or thousands of customers may find this difficult. But it’s still possible – even with the broadest spectrum of products available on the Internet.

By analyzing structured and unstructured data in a digital business planning platform, you can create sophisticated customer segments that allow you to sense and anticipate short-term demand.

Every data point – point-of-sale information, IoT sensor data, social media trends, weather, and purchasing patterns – can help you better understand the needs of your individual customers and give them that proverbial personal touch.

Take planning to the next level with machine learning

By leveraging machine learning capabilities in your digital business planning platform, you can capitalize on your historical demand data, increase forecasting accuracy, and fine-tune your operations over time.

The end result? Automation.

When your enterprise can automate its planning processes, you can deliver superior customer experiences in the most profitable way.

Say you’re a television manufacturer. You need to determine how and where – geographically – your new 65-inch HDTV is going to sell best. Based on historical data, you can accurately predict sales in the medium and long term. But what about the near term?

A digital business planning platform enables you to assess data, anticipate demand, and develop short-term plans.

Your data may reveal a link between TV sales and home sales or new home construction, for instance. With this insight, you can better position your inventory or modify your manufacturing plans. You can monitor new home construction in different regions to determine which areas require extra stock. Or you can ramp up production when homebuying season starts in the spring.

Machine learning tools empower you to automate this process. They absorb insights from past experiences to help you improve future planning processes.

Your historical product-launch data reveals that when the 55-inch HDTV you released last year experienced a three-week sales spike, sales continued to rise the following eight weeks. Based on this information, you can develop plans that will help you better react if your new 65-inch HDTV begins selling in a similar fashion. Machine learning tools can help you identify patterns and automatically increase near-term forecasts in regions where sales growth is more likely.

Streamline logistics with IoT

Customers expect the right product, the right quantity, and the right quality delivered to the right location. Generally, that’s not a problem. Your challenge lies in giving customers what they want immediately – even when products, quantities, and locations change.

Automation can help you accelerate order fulfillment and delivery. But how can you achieve logistics-specific automation? By seamlessly connecting your physical logistics flow with your digital logistics flow using IoT sensor data.

Innovative transportation and warehouse management systems, along with track and trace software, allow you to view data from IoT-enabled devices to execute supply chain activities with minimal manual involvement.

These innovative tools enable you to:

  • Check on inventory immediately to achieve higher service levels for fast customer response without relying on warehouse staff.
  • Schedule more accurate delivery times, even in the face of severe weather or traffic jams, by gaining in-the-moment access to your vehicles’ locations without contacting your driver for status updates.
  • Identify precisely why a delivery vehicle broke down on its way to a destination without involving a mechanic.
  • Share real-time data with your entire network of supply chain partners so you can better collaborate with suppliers, manufacturers, service providers, and others without e-mailing reports or discussing issues over the phone.

When everything – and everyone – is connected, you can streamline your logistics processes and give your customers exactly what they want, when they want it – in a simple, efficient, and profitable way.

Achieve your dream of customer centricity

Supply chains are growing more complex by the second. Rising data volumes make it increasingly difficult for organizations to develop accurate plans that cater to their customers’ needs. And sky-high customer expectations place further strains on companies to deliver products in a timely fashion.

Cutting-edge tools like IoT and machine learning hold the key to creating a touchless supply chain. By automating your planning and logistics processes with these innovative technologies, you can achieve your dream of customer centricity.

Download this IDC Infobrief to learn more about predictive business and the digital supply chain of one.

Martin Barkman

About Martin Barkman

Martin Barkman is Senior Vice President and Global Head of Solution Management for Digital Supply Chain at SAP. In this role, he leads the strategy and go-to-market for the SAP Digital Supply Chain solution portfolio, which encompasses software for R&D, engineering, supply chain planning, manufacturing, logistics, and asset management. Martin joined SAP in 2013 following SAP’s acquisition of SmartOps Corporation, where he served as Executive Vice President of Global Operations and then the Chief Executive Officer. Martin earned his B.S. in Chemical Engineering with Distinction from Cornell University and later an MBA in Finance as a Palmer Scholar from the Wharton School at The University of Pennsylvania.

Markus Rosemann

About Markus Rosemann

Markus Rosemann is Global Vice President for Digital Logistics and Order Fulfillment at SAP SE, based in Walldorf, Germany. Markus is responsible for the global solution strategy and go-to-market of SAP’s logistics solutions, an important building block of SAP’s Digital Supply Chain solutions. He works with customers, thought leaders and partners on building solutions for the line of business logistics, covering transportation, warehousing, and the logistics network including track & trace. Markus joined SAP in 1997 and successfully introduced solutions to the market for Supply Chain Execution as well as for Project, Portfolio and Innovation Management.