Enhancing Supply Chain Success Through Customer Focus

What's the missing link in your supply chain success? Could it be a shift in focus towards the customer? In this intriguing episode, we question the trend of overlooking the crucial aspect of customer focus in supply chain management. We highlight the numerous advantages of placing your customer at the heart of your supply chain operations, discussing topics such as managing disruptions, analytics, global management, cost optimization, and sustainability. 

Ever felt like you're hitting a brick wall when trying to contact a company? Or received a defective product after what seems like forever? We've all been there. Join us as we delve into the common issues that customers face and how to drastically improve these experiences within your supply chain operations. We shed light on effective strategies like inventory management, self-service, responsive customer service, and how marketing activities can impact the supply chain. We wrap up the session emphasizing the enormous benefits of breaking down departmental silos for a unified business view. You won't want to miss this insightful discussion!

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Transcript

Speaker 1: 0:00

Hello, I'm Tony Hines and you're listening to the Chain Reaction Podcast all about supply chain advantage. Thanks for dropping by today, and we've got a great topic on the show. It's called Walk on my Mille in my Shoes and it's all about the customer focus supply chain. So let's get started how to make a supply chain advantage. Now, interestingly, this week I did some research and I simply asked the question of various sources that I engaged with during the week to name the top five topics of interest for supply chain professionals today. And then I asked exactly the same question name me the top five topics for supply chains of interest to CEOs. And guess what? Did the customer feature anywhere? No, customers did not come up in any of the top five topics. Now can you explain that to me? Why should that be the case? Surely the customer is at the center of everything, and surely without the customer you don't need supply chains. So you have to be customer centric, you have to be focused on the customer. What does this list tell me? It tells me that we've still got a lot of work to do when it comes to supply chains focusing on customers. So stay tuned. I'm going to tell you more Now. Interestingly, in the first list that I've compiled, some of the topics that popped up of interest to supply chain professionals. You'd expect to find on a list, but I'd also expect to see somewhere something about the customer. After all, it's the customer who adds value. It's the customer that pays for the goods and services that supply chains actually deliver. So why isn't the customer listed?

Speaker 1: 1:52

These top five topics are managing supply chain disruption, agile supply chains to better respond to ongoing supply chain disruptions. But where's the customer in that? Surely it's not to respond to ongoing supply chain disruptions. If you manage supply chain disruption, you're managing that on behalf of the customer. You're managing it with purpose to satisfy customers. So why don't we just say that that's what we're doing? We're managing the supply chain for customers. And then we've got supply chain analytics. That always pops up because people are focused on analytics and we can understand that too. We want to develop effective strategies. We want to build strong analytics that tell us what's going on in the supply chain, and we want to develop competence as an organization to have our supply chains focused on guess what customers. Shouldn't that be the case? And if it is, why don't we say it? And then we talk about global supply chain management and we think about mitigating risk and finding growth opportunities in times of rapid change. And of course, yes, we do. But why are we doing that? Why are we mitigating risk? We're mitigating risk so that we can have supply chains that are resilient, that are agile, and actually guess what? Yep, you've got it now Satisfy the customer. And if you're looking for growth, who do you have to satisfy? Yep, you have to satisfy the customer.

Speaker 1: 3:22

Optimizing supply chain cost was another issue that people talk to me about Identifying spend reductions, looking for opportunities to benchmark current supply chain costs and planning for unforeseen events and we know that that, too, is important and, of course, supply chain sustainability. But what was absent in all of the feedback was any mention of customers, and that might tell you something about why supply chains need to become more focused on what the customer wants. When it came to asking the same question of CEOs, well, you know what CEOs are going to say, because CEOs are focused on the investor community, and what they should really be focused on, of course, are the customers, but they have so much to do. If you're a public company and your capital comes from the market, they are more focused and more interested on actually satisfying the investor community as the major stakeholder, rather than the customers. More focus on customers, of course, would give growth. It would provide more investment, because everybody loves a company that satisfies customers. And guess what? So do investors, because they want to invest in companies that make returns.

Speaker 1: 4:42

But the CEOs were focused on things like building resilience, leaning into change, creating change, technology the foundation of growth, and that's because it's everywhere. I mean. We talk about technology every day. There isn't a day goes by now without listening about artificial intelligence and how it's going to change the world, and of course that is true. It probably will and is doing right now. But guess who changes the world the most? For supply chains? The customer, because if the customer buys goods and they buy more because they think you're a good company to deal with, you'll get growth.

Speaker 1: 5:19

Ceos also interested in sustainability, and they were looking to embed sustainable practices in organizations, and of course that's a good thing. And then they talk about talent development and how to rethink and compete in the talent market, and that's good too. But where's the customer? Because unless you've got customers, no good thinking about investing in talent, because you won't have customers. And if you haven't got customers, you won't need a supply chain and you won't need the talent. So focus on the customer.

Speaker 1: 5:49

So I'm not going to bother delving too much into the psyche of why CEOs or why supply chain professionals come up with those sort of answers right now. That's for another episode or for another research project, but I'm going to focus on why the customer is so important in the supply chain. Now I shouldn't be rate supply chain professionals too much for coming up with the lists that they did, because obviously they're focused on improving the overall efficiency and effectiveness of the supply chain. And, of course, having resilient supply chains is important and it can lead to better customer satisfaction. As we know, disruption to and optimizing supply chain cost is also important and that's why they've mentioned it, because they know that if they can lower cost and optimize the cost in the supply chain and reduce those disruptions, they can deliver goods on time and they can compete on price so they can offer their customers better service at a more affordable price if they can keep cost under control and control disruption.

Speaker 1: 7:09

Resilience, of course, is something that's occupying the minds of CEOs In challenging times such as COVID-19 and, of course, in disruptive times when supply chains are suffering failures to deliver, it's important to have strategies in place that can cope with that. So, while they may not have explicitly mentioned customers as a priority, underneath the surface, I'm guessing if we did a brain scan and we looked at the ideas and we were able to delve deeper into the thinking, we'd probably find somewhere the customers are present in the thinking of the people we talk to. So I'll be a little bit less harsh, but not too less harsh, because if that's the case, we ought to really put the customers as the top priority and everything else that follows is organized to satisfy their demand. So, although we might be focused on strategy and operations which is important to achieve our strategies and to improve our operations we have to have customers and we have to focus on what the customers want. For example, if we manage supply chain disruption, it's about ensuring products and services reach customers on time, without delay, without problem, without issues, and we increase customer satisfaction when we build resilience.

Speaker 1: 8:33

Ceos have to focus on setbacks so that they can provide value to the customers, and that's important. So the customer is the driving force behind the efforts of organization. Any profit organization is clearly focused on customers. If it's not, it won't be in business very long. The goal might be to build robust systems that can cater for customers and to have those systems like working like a well-oiled machine, very efficient and effective, and that is a priority. But it's the customer that we focus on. The customers pay for the goods. They add the value, they create the return on investment. And if we focus on those three things, if we're looking for improved performance, we have to focus on the customer.

Speaker 1: 9:22

Now I'm going to tell you why you should be focused on the customer, and I'm going to use Elvis Presley to help me. There was a great song that Elvis Presley recorded and it was called Walk A Mile In my Shoes. If I could be you, if you could be me for just one hour, if we could find a way to get inside each other's mind, if you could see you through my eyes, instead your own ego, I believe you'd be. I believe you'd be surprised to see that you've been blind. Walk a mile in my shoes, just walk a mile in my shoes Before you abuse, criticise and accuse. Walk a mile in my shoes Well, I haven't flipped my lid or anything, but it's important to understand your supply chain through the eyes of the customer, and that song tells you why To improve things in your organisation, to create better strategies, to improve operations, to make things better, to encourage the right people to join the organisation, to have the right talent around you all important things but to do those things, you need to focus attention on the customer.

Speaker 1: 10:33

You need to see your organisation as your customer sees you, and so let's look at some of the issues that customers might tell you, and it might be hard listening. What do customers dislike when they deal with organisations? Well, the things they really dislike are slow response times, delayed responses from companies, delayed feedback, delayed replies, a lack of information, no clarity about their orders or where things are up to. They also seriously dislike long or complicated checkout processes, whether in person or online, and, of course, that leads to lost business because customers will at some point say enough's enough and they'll walk away. They also dislike rude and impolite employees, and so staff have to be focused on the customer and understand everything about the supply from the customer's point of view. They expect service and they expect a positive response from the supply and company, and if your reputation as a brand, as an organisation, is to be maintained, then it's about the impression that that customer has about the first point of contact that they have with your organisation again, be that in person or through the digital contact points that they have. So in the Omni Channel organisation we've got lots of touch points. It's important to make sure that all those touch points are responding consistently to the requests of customers and that all of them are providing the level of service that the customer expects, and it's not just what the customer expects. You want to give some surprise to customers by making that experience much better, and so it's important not just to focus on the lost sales. You might want to know why you lost those sales, but you want to take steps to improve those in some way, to improve the operations, to develop better strategies, then actually focus on what the customer wants from your organisation.

Speaker 1: 12:39

The other thing that most customers dislike is websites that are cluttered and difficult to find their way around, so that's problematic. Poorly designed websites can make it hard for customers to search and find products and services that they want to buy, so the better and smoother and the easier you can do, then that's important too. The other thing that customers hate that's on the list this is what they tell me is product unavailability. So when stock ads occur, that's a difficult time. It's a difficult point, that's an inflection point. It's a point at which customers could be leaving your organization, and so that's why inventory management is key to maintaining customers. But of course, it's not only supply chain professionals that need to understand that. It's everyone in the organization that needs to understand that, and they need to understand why supply chains are so central and so important to the business and its profitability and return on investment.

Speaker 1: 13:40

Customers also like some element of self-service. When they come into contact with an organization, they like to feel that they're doing something, that they're participating in the purchase in a positive way, and so the easier you can make that contact with the customer to help them navigate the website or to contact the right person in your organization. That's important. How many times these days do you go onto a website and you can't find a contact number? You can't find an email address for the right person that you want to get in touch with about some aspect of service that's problematic for you as a customer? Well, it happens to me quite a lot. I go onto all kinds of large organizations websites and it's very difficult to find the exact person to contact unless you've dealt with them before.

Speaker 1: 14:30

Receiving defective products is another problem. If you get a product after waiting and you've had a difficult time getting that product delivered in the first place, when it arrives, the last thing you want is for that product to have a defect, because that means more delay, it means more cost, it could disrupt your business if it's a business-to-business purchase and if it's a business-to-consumer purchase it could severely affect what you can do because you haven't got the product or the service that you expected at the time you wanted it. So defective products. We need to have things like Sigma 6, which is what we have in supply chains. It's there for a purpose. It's not there just to drive efficiency. It's there to satisfy customers. When we talk about Sigma 6, we should be talking about the customer, because that's why it's there.

Speaker 1: 15:19

And the other thing we seriously dislike when you walk a mile in the customer's shoes is when issues can't be resolved at a first call or at least soon after that first call. You don't want lots of forms to have to complete and then have delays of 10 days before somebody responds. Fill in this form, make a complaint and in 10 days' time we'll respond to you. Well, that's not good enough, is it? We need better customer service. There are lots of organisations out there and recently I've been thinking about this quite seriously and the what I call zombie organisations and by zombie organisations I mean they have procedures and processes in place, but they don't respond quickly enough to the customer. When it comes to customer contact, they're dead, they don't respond, and those are the companies that will go out of business, because eventually enough people will reach a point at which they don't want to do business with that company because there are better options for them elsewhere. If I could be you and you could be me just for one hour, then you'd see what it's like to work in supply chains or what it's like to work in marketing. So let's take it away.

Speaker 1: 16:43

Well, let's begin by talking about marketing, and marketing is about meeting customer needs, satisfying demand, and so it's the other side of the coin to the supply chain. Marketing involves planning, it involves sales, selling the product, selling the service to customers and making the promise, on behalf of the organisation, to deliver and fulfil an order at a determined price which is agreed. And problems occur in marketing when customers don't get information on their goods or services and when they're going to arrive, or if there's a delay to a product or service which is heading their way, because that might put pressure on their own supply chains to meet their customers' needs as and when required. So that's the first thing we need to understand about marketing and how it interlinks with supply chains. Marketing, to be done properly, also needs information, so there needs to be a good information system, and that needs to be transparent and visible. So, for example, if there's a problem in the supply chain, marketers need to know about it so as they don't overpromise. Marketers also need to be aware of what would happen if they suddenly decide to do a promotional activity. What kind of pressure is that likely to put on the supply chain and the people who work in it? They need to know the impact of any promotional activity or advertising on the throughput of the products or services that they plan to promote, and so there needs to be communication as well as information that's both effective and informative, so that they understand just what they need to do to manage that demand process.

Speaker 1: 18:39

In the past, of course, this wasn't always as easy as it should be, and even today it's perhaps more difficult than it could be. Organisations need to ensure that they're making the necessary investment in their information systems and in the technologies that provide real-time data about goods and services within the chain. In the past, silos and organisations were a common feature, so the marketing department did what they did and the supply chain department did what they did, and that wasn't helpful. And often there was rivalry between different departments in the organisation such that you wouldn't think they were both working for the same organisation. So that needed to be resolved. If you still have silos in your organisation, well it's about time you dismantled them, and it's about time that different departments talk to each other effectively. It's about having a view for the organisation on the business and the success of that business, and working together effectively is part of that. Get that silo gone.

Speaker 1: 19:58

And I'm here to tell you about a series of specials we've got coming up which take a look at the front end of supply chains, and so I'm taking a look at the demand side, and at that demand side, the very starting point for any demand process for businesses or for other organisations from that point of view is often an advertising project, and so we've got three special programmes, all taking a look at advertising and how it impacts the supply chain. So, in particular, I'm exploring the change that's happened in the advertising market in the first episode. In the second episode I'm taking a look at the demise of the third party cookie and what that means for advertising and, of course, for privacy and privacy concerns. And in the third programme I'm taking a detailed look at programmatic advertising and how that is very similar to some of the transformation programmes going on in supply chains With the digital marketplace and, of course, how supply chains fit in with the front end. So I hope you find those programmes of interest and I look forward to seeing you on the Chain Reaction podcast, joining me, tony Hines, to find out more.

Speaker 1: 21:17

Well, I'm signing off right now, but I hope to see you in the podcast. Bye for now. Now I should also remind you that there is a programme picking up on some of the ideas that were discussed in this programme about the customer focus supply chain, and that's focused on what marketers should know about supply chains and what supply chain professionals need to know about marketing, and you might want to pick that one up too when it comes along. So look out for that. That's it for this episode. I hope you've enjoyed it and I hope you've learned something about why it's important and essential to have the customer at the centre of everything that you do in supply chains. So tell everybody that they must focus on the customer. Get that customer focus supply chain working to your advantage. Now, thanks for listening. I'm Tony Hines. I'm signing off and I'll see you next time in the Chain Reaction podcast. Bye, for now. You've been listening to the Chain Reaction podcast. Written, presented and produced by