Let Your Customer Be Your Guide: Creating Tomorrow’s Digital Supply Networks

BY ON JUN 1, 2016

The performance of supply chains is increasingly critical to the success of organizations. When Starbucks CEO Howard Schultz was asked about the success of the global coffee brand, he remarked that “the supply chain is the primary co-author of the strategy of our business.” But perhaps the greatest test of a supply chain is in saving lives, as hwas recently discovered by one of the world’s leading non-governmental organizations (NGOs).

A U.S. non-profit was supporting healthcare services in vulnerable communities in Africa. It found that medical providers on the ground, and those that maintained pharmaceuticals and medical devices had no way of telling the full quantity and whereabouts of everything from bandages, needles and latex gloves to diagnostic agents and drugs. That is not good in a perilous and unpredictable environment in which some supplies need to be maintained and transported in special conditions. When a virus outbreak struck, medical professionals did not know how to locate extra supplies.

Today, the organization is ready to replace its fragile and fragmented supply chain with a blueprint for a digital supply network. Harnessing analytics, cloud and mobility technologies, perhaps even social media, the new supply chain network will not only give a clear picture of inventories in storage or en route, but will also help the NGO and its medical practitioner partners predict future demand and plan for it with greater precision.

Many private-sector organizations have much to learn from this experience. Few companies have a supply chain that is fit for purpose. Reliable and cost-effective, perhaps. But traditional supply chains lack the intelligence and flexibility companies need to win in today’s digital revolution, let alone navigate volatile markets.

Visionaries see the creation of plug-and-play digital supply networks as an opportunity to disrupt markets and please customers. Winners will look first at their customers—their needs, expectations, and buying preferences and behaviors—and use those observations to inform what shape their supply chain takes.

Although many companies leap on Big Data to get real-time customer information, many have yet to invest the same way in supply chain analytics to gain much needed visibility. It is no wonder then that nearly three out of four (72 percent) supply chain executives are under pressure to replace their supply chains.

But as executives consider what shape their new supply chain takes, they would do well to study the 10 percent of companies that reported the most growth and profitability as a result of their efforts. They say they were able to lower the cost of serving their customers, increase their revenue and gain new market share as a result of their modern supply chain.

Frankly, customers expect the companies they patronize to recognize the business is all about them. So supply chain design begins with the customers. To put it simply: Customers want what they want, the way the want it when they want it. The notion that any company would not be able to peer into its organization to schedule a service, get the status of an order or confirm product inventory is anathema to them.

So how are companies leveraging digital supply networks?

Dell invites its digital customers to collaborate with the company to improve service experiences via its Idea Storm platform, a sophisticated interactive website that leverages the power of social media to incorporate diverse sources of customer service know-how. It blurs the line between employees and customers as customers can even take leadership roles, shaping and managing the forum.

A purveyor of athletic clothing established a seamless, time-saving process for stocking shirts in stores with a popular player’s number the Monday after a big game. It is underpinned by a sophisticated analytics process that provides insights about what will be in demand, fly off the shelves and ring up sales.

Bud Light customers in Washington, D.C. now have the ability to order the Anheuser-Busch product with a tap on an app. Consumers connect directly and digitally with the company’s supply chain to place beer orders. Adding sizzle to the service, the company promises to add a little something extra to some deliveries and once in a while over-the-top experiences expected to “turn a gathering of friends into an amazing event.”

Suffice it to say, any company with a supply chain designed without the customers in mind is no longer fit for purpose. Job one is a supply chain design that creates a customer-pleasing experience and visibility across operations, beginning with the customer.