What’s the path to building customer centric supply chains?


According to a Gartner survey of supply chain leaders in the second half of 2021, 62 percent are investing in capabilities to capture, analyze and leverage supply chain specific customer satisfaction data to help drive commercial growth instead of focusing on cost-cutting innovations.
In a study last year, Deloitte likewise said the seemingly boundless customer data accessible online is enabling supply chains to react more quickly to market shifts and proactively address consumer needs to drive revenues and loyalty rather than their past dual focus on cost and speed.
Many supply chain organizations, however, are still believed to lack clarity on how to transform to be more customer centric.
In a study released last fall, KPMG concluded that, “A customer-centric supply chain 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.”
Gartner said c-level buy-in, goal alignment across the organization and clearly-defined metrics are required to drive customer centricity in the supply chain. Also seen as critical is listening at multiple interaction points and examining product use and/or satisfaction data to gain a better understanding of the customer at critical touchpoints. Gartner’s survey showed more than 60 percent of supply chain leaders investing in developing and maintaining access to voice of the customer (VoC) data.
Beth Coppinger, an analyst at Gartner’s supply chain practice, said in a press release, “CSCOs (chief supply chain officers) can use VoC data to identify problematic touchpoints — or the key drivers of customer satisfaction and dissatisfaction. It is crucial that data isn’t just collected, but also analyzed and acted upon.”
Deloitte said a broader challenge is building trust with consumers to gain better access to their data. Another core challenge is the “vast scope and volume” of data now being generated, along with the rising costs of shifting to new operating models. Deloitte wrote in its study, “As companies shift to digital-first and customer-centric supply chains, they will need to actively manage costs to maintain profitable growth.”
- Gartner Says CSCOs Must Take 3 Actions to Improve Supply Chain Customer Experience – Gartner
- Reinventing Supply Chain for the Future – Gartner
- Consumer connectivity: Creating customer-centric supply chains – Deloitte
- Customer-centric supply chains: Shaping your customer experience – KPMG
DISCUSSION QUESTIONS: What are the obvious and less obvious challenges to leveraging customer data to create a more responsive supply chain? What advice overall would you have about creating a customer centric supply chain?
Join the Discussion!
14 Comments on "What’s the path to building customer centric supply chains?"
You must be logged in to post a comment.
You must be logged in to post a comment.
Director, Retail Strategy, CI&T
I’m happy there’s a motion to center the customer in supply chain transformation because the reality is that assumptions are made inaccurately about what the customer wants. Most consumers don’t need overnight delivery- they just need an item to arrive when they need it. The tricky part in leveraging customer data will be separating self-reported, idealistic desires from actual feelings customers have about product acquisition. Any customer will tell you they want an item immediately, but data will have to go a level deeper to determine how serious that expectation actually is.
Lead, Kearney Consumer Institute
Yes to all of this!
Managing Partner, Advanced Simulations
You might think we solved this problem 20 years ago, wouldn’t you? At the moment, it’s not a data problem, it’s a materiel and manpower problem facing the supply chain. Throw all the data you want at it and make it customer-centric (whatever that means to supply chains), we need more stuff, more people to process the stuff, more people to deliver the stuff, and more people to stock the stuff.
Managing Partner Cambridge Retail Advisors
I would start by understanding the customer experience and leveraging technology that reflects that journey. Thinking about the voice of the customer (VoC), we must understand that the loudest voice of the customer isn’t always an accurate reflection of reality. Many of the voices are angry. I would spend a great deal of energy on focus groups and direct quantitative and qualitative research. The technology side requires inventory accuracy, and I would suggest the best way to do this is via RFID and realtime data in order to create a sense-and-respond supply chain nervous system. This is the way to react to the verities of today’s disruptive environment.
VoC data is important. But NPS and satisfaction charts are only management crutches. They track customer satisfaction (sort of) after the fact. But retailers actually need to give customers a direct line to a helpful human when things go wrong. When it comes to customer satisfaction, data is good; dialogue is better.
Principal, Retail Technology Group
Assuming that retailers have 100 percent of the data they need, they would still not be able to get available inventory right more that 90 percent of the time. This is because pinpointing the exact time at which a retailer should have a unit of an SKU for sale in a specific store is possible but not probable. It should be easier to achieve customer satisfaction within the only sales channel because in that case, the available inventory is a fulfillment center stocking many more units of a SKU than a store should. But getting it right 98 percent of the time is extremely difficult, and the incremental cost of sales is probably not worth the effort. The law of diminishing returns.
Strategy & Operations Delivery Leader
A customer-first and agile supply chain is a critical value proposition to drive outstanding experiences. We have seen the emergence of a more prescriptive approach to supply chain planning that requires a data and analytics first strategy to get ahead of the demand curve and anticipate the impacts of the global supply chain disruptions.
Agile supply chain planning includes streamlining the sourcing, procurement, manufacturing, shipping, and fulfillment processes. In addition, assortment and inventory optimization strategies will help retailers always have their key items in stock. Most importantly, retailers and brands have to take a more transparent and open approach with customers to set proper expectations on when the goods will be available and enable personalized tracking capabilities along the shipping journey.
The winners in this supply chain disruptive phase we are experiencing are those retailers who have a diversification strategy of leveraging their stores as micro fulfillment centers, driving a distribution center hub model, and even considering a vendor drop-ship model.
SVP Global Marketing, Fluent Commerce
Customer data can be fragmented and siloed. It’s not enough to have the data, you need someone to interpret it using a supply chain lens. That way you can use it to enable:
But to do this you need true inventory visibility and lead times across the supply chain so you can promise against inbound inventory when it will still meet the needs of your customer.
Consulting Partner, TCS
Retail Industry Strategy, Esri
The consistent thread across all the advisory firms quoted here is access to customer data. Customer-centricity relies on the retailers understanding their customers. It requires “listening at multiple interaction points” and “maintaining access to the voice of the customer.”
The most obvious challenge to using this data is getting access to this data. Over time that means they are also using it responsibly and in a way so that the customer perceives value from the relationship. This means being good stewards of their data — from a security standpoint, but also from a usage perspective. Creep factor is a big deal for consumers.
I think the most important thing for retailers to remember here is that relationships go two ways. Listen and react responsibly, and give the customer value from sharing their data.
Founding Partner, Merchandising Metrics
Lead, Kearney Consumer Institute
As others have noted, there’s some risk to supply chain teams trying to interpret the voice of the customer – especially when other teams are doing that as well. Where the supply chain can win with the consumer is through improving processes and experiences that make things better for the consumer.
One great example is the returns process – consumers expect large companies to have good return policies and yet it doesn’t seem that anyone has truly tried to figure this out yet – from letting consumers just keep products rather than process the return, to stringent return policies that upset the consumer.
Returns are a monster supply chain problem that would benefit the consumer.
Chairman Emeritus, Relex Solutions
Sr. Director Retail Innovation at Revionics, an Aptos Company
Founder & CEO, HotWax Commerce