Action and adaptability, said speaker and author Garrison Wynn, create opportunity. After years of experiencing the former, it’s surely the time for the latter.
With pandemic-related disruptions and reactive solutions increasingly in the rearview mirror, has there ever been a better season for re-evaluating overall supply chain strategies and business models? Supply chain practitioners are keenly aware of the need to move forward and think ahead—even if they’re not sure exactly how.
Industry consultants, solution providers, researchers and academics have been touting the importance of customer-centricity. With supply chain, that means keeping the customer at the center throughout manufacturing, transportation, storage and distribution. But in times that continue to rapidly shift, what does that look like? And is it still the best option?
“Building a customer-centric supply chain is all about removing friction for customers,” said John Jackson, account executive at MHI member Exotec. “Generally speaking, end customers seldom think about your supply chain if nothing goes wrong and products arrive without delays. As a brand, you should strive for your supply chain to be practically invisible to your customers. From an operational perspective, this means that you need to fulfill orders as close to real time as possible and maintain high uptime, regardless of any disruptions.”
Jackson, whose company’s Skypod robotic goods-to-person system is touted as providing the “highest level of performance across the broadest range of throughput and storage requirements,” brings the presentation “How Warehouse Robotics Can Increase Customer Satisfaction” to ProMat 2023.
“Amazon and the age of e-commerce have completely redefined customer expectations about fast delivery,” he said. “This tectonic shift forced everyone from large retailers to small and mid-sized merchants into a race to offer delivery promises at no additional cost to the customer. But the reality is that few, if any, can match Amazon’s scale and place fulfillment centers in close proximity to all urban areas in order to guarantee fast delivery everywhere.”
Increasingly, retailers and e-commerce players need to do more with less, he said, and “that’s where robotics can play a key role.” Companies of all sizes can leverage robotics to drive performance and help keep up with evolving customer expectations, he said. This is especially the case as labor shortages continue to plague the industry. The traditional “just throw people at the problem” approach is no longer tenable. Considering that 80% of today’s warehouses have no automation, Jackson said, “it’s clear that the industry as a whole has a lot of room to improve operations by leveraging robotics.”
The industry also can grow in preparing its people for greater customer-centricity.
“The idea of customer-centricity needs to permeate the entire organization,” Jackson said. “That starts with your people. I think the most important thing to communicate to your employees is that their actions directly impact the end customer, even if they aren’t customer-facing. For instance, it might be easy for a warehouse operator to focus on their day-to-day without thinking about how their operations affect customers downstream, because they are not the ones getting complaints about late delivery. It’s important that customer-centricity is established as a key value, and that every employee understands how they can support it.”
‘Seamless and convenient’
Over at DispatchTrack, meanwhile, the conversation about customer-centricity is about providing a customer delivery experience that’s “as seamless and convenient as possible,” said Shailu Satish, co-founder and COO. That means strategic focus on last mile delivery solutions. DispatchTrack optimizes all aspects of last-mile operations to “maximize cost efficiency and ensure a superior customer experience,” she said.
“Cost increases, fuel price volatility and supply chain chaos in recent months have all made it clear that it’s the companies that are able to stay adaptable and optimize their processes that are poised to succeed—and that’s virtually impossible without the right solution.”
Many businesses have solutions in place, she said, but there’s still work to be done. A recent DispatchTrack research report revealed that companies see opportunities for improvement for last mile efficiency in delivery execution (42%); customer communication (41%); routing (40%); return management (37%); and inventory management (35%).
Data has had a massive impact on last mile delivery, Satish continued, especially when it comes to AI and optimization.
“Simply put, the more information you have when you’re making and executing supply chain plans, the smoother your deliveries run,” she said. “This can include both data on past deliveries (how long a particular appliance typically takes to install once the driver is on-site, e.g.) as well as live data being gathered during the delivery run (i.e., order statuses, rejected or failed deliveries, etc.) The challenge is making sure you have the right data in the right place at the right time to facilitate smarter planning and execution.”
Jackson, too, touched on the increasingly widespread and sophisticated use of data in recent years.
“It is increasingly being used to inform and optimize supply chain decisions,” he said. “As the supply chain becomes more digitized, companies will get better access to real-time data that allows for quicker decision-making. In the long run, I can see more companies investing in tools that provide them with end-to-end visibility throughout their entire supply chain to quickly identify bottlenecks and ensure that goods get delivered to customers in the most effective way possible.”
Deloitte, in its 2021 report “Consumer Connectivity: Using Consumer Data to Enable Breakthrough Products, Services and Business Models,” notes that the idea of using consumer data to improve supply chain planning has been around for decades. “But as consumers become increasingly connected, the volume and depth of data about them is growing exponentially. By capitalizing on that wealth of data, supply chains can significantly improve their operational performance. But more importantly, they can use those new insights to enable breakthrough products, drive organic revenue growth and create sustainable competitive advantages.”
Gartner, in the report “Four Steps to Becoming a Customer-Centric Supply Chain,” delineates a number of ways that supply chains could play a key role in customer experience (CX), including design and operations. Design represents knowing and aligning strategy, operating model, measures, product and service options to address customer needs and preferences. Operations, meanwhile, means reliable and seamless delivery of products, services and experiences to meet customer expectations.
“Increasingly,” the 2021 report states, “supply chain leaders are recognizing the impact supply chains can have on CX: 83% of supply chain practitioners we surveyed say they are being asked to improve CX as part of their organization’s digital business strategy.” The most common area of priority when it comes to CX is shifting the supply chain culture toward a more customer-centric footing, and the four steps mentioned in the report title including leveraging CX mindset, outcomes, insights and actions.
Then there’s KPMG, deeming customer-centricity “the new battleground” in its 2021 “Future of Supply Chain” report. Delivering a winning customer experience, according to the report, means satisfying three goals: connecting to customers with compelling value propositions and interactions; empowering employees to deliver on the brand promise; and connecting front, middle and back offices behind customer growth.
Future supply chains, KPMG reports, are likely to address challenges including customization and speed-to-market; micro-segments; accelerated innovation; trust and authenticity; and channel consistency.
“A customer-centric supply chain,” KPMG reports, “is driven by visibility, insightful data and a shared commitment to customers. It also looks to balance customer expectations with profitability by delivering the desired customer experience without under- or over-investing in capabilities.”