The role of tech in building intel. (customer-centric) SC

The role of technology in building intelligent (customer-centric) supply chains

Since the pandemic, the manufacturing industry has been forced to reinvent its business model with the disruption in the supply chain due to several macro factors. The supply chain is most of the time the network of weakest links. Supply chain design from efficient to collaborative to autonomous has been forced to evolve be it demand forecasting, inter-business unit planning or supply streamlining. 

Digital disruption enables significant improvement in supply chain excellence, and we look at it from a new lens today, the customer’s lens a CRM lens, and see how that’s even more impactful. The emergence of a ‘Ship with CRM’ trend is ensuring businesses to think with a digital-first mindset, particularly in the manufacturing and automotive industries.

In the face of unprecedented volatile demand, business-as-usual calendars for forecasting, budgeting, and planning won’t do. Companies that adhere rigidly to unrealistic plans may find themselves sitting on piles of inventory or fighting price wars. We discuss today how that delivers an end-to-end customer experience with on time in full OTIF delivery and higher customer satisfaction. 

We Are All Moving Forward..

Long ago, in our village communities, we purchased goods directly from the weaver, the cobbler or the blacksmith. Then, as new modes of transportation were introduced, we could reach suppliers in other cities or countries, even across the ocean. When computers came along, basic digital use started. EDI has lowered operating expenditure by at least 35% by eliminating a variety of costs. Today, the majority of Travel & Logistics companies use EDI and paper, while very few still use only paper. 

Today, 75% of Travel & Logistics companies use EDI and paper, while 6% still use only paper.

Shift From Shipment-Centric to Customer-Centric

As we slowly emerge from the pandemic, McKinsey stated: “Companies will need to ensure that their digital channels are on par with or better than those of their competition to succeed in this new environment”

One of the things that emerged very clearly from 2020 was that we are now ALL digital-first customers. Not digital-only. Digital-first. All of our lives were completely upended by the pandemic—our work lives, our home lives, our family lives, etc—so we had to completely change and adapt the way that we did everything. 

The digital-first customer can be summed up in these four ways:

● She is always on, whether at home in her home office, on the road picking up her kids, or staying up late to get more work or household items done.

● She uses multiple channels and devices to get things done—working, shopping, to stay in touch with friends and family, you name it. She relies on her digital devices, as well as in-person channels, as the world begins to reopen. In fact, our recent research shows that almost 70% of customers want companies to offer new ways to get existing products and services. And it’s closer to 80% for Millennials and Gen Z.

● She expects digital everywhere. Even when she goes to a restaurant in-person, she expects to be able to scan a QR code to bring up the dinner menu on her phone. It’s touchless, more convenient, and better for the environment.

● Finally, as she moves throughout her day and moves seamlessly across all of these channels, she expects a completely connected experience across her entire customer journey. 

From a manufacturing perspective, B2B with a B2C delivery promise integrated to cater to the digital-first customer is the need of the hour. Being closer to customers and industries is ever more important.

B2B with a B2C Delivery Promise 

B2B and B2C expectations are increasingly converging. They both want fast, connected, personalized experiences. We continue to see B2B and B2C customer expectations converging. 

Now we learnt that 70% of the respondents feel that connected processes and data are very important—this is what can provide a single pane of glass to review disparate systems and processes. We encourage our customers to focus on thinking bigger and to solve for a true end-to-end experience.

The Bullwhip Effect - Panic and Hoarding

Those of you familiar with the concept let me peel the onion further—The “bullwhip effect” means that distortions in data cascade through a company’s suppliers. Businesses must remain flexible to protect themselves. 

Companies had already been changing their supply chains because of the coronavirus pandemic, moving away from single suppliers and rethinking their dependence on just-in-time supply chains—where parts and components are delivered to manufacturing and assembly plants exactly when required. Instead, companies are increasingly embracing just-in-case supply chains, keeping much higher levels of inventory to avoid being caught short by disruptions.

Efficient Supply Chain and anticipation of the demand and fulfillment at speed is a competitive advantage. Some companies are establishing supply chain “war rooms” to make fast decisions across functions. Populated by leaders from production, procurement, logistics, and sales—and furnished with the latest data on purchasing, production, orders, and deliveries—these teams meet weekly or even daily to devise near-term operational plans. Service, cost and inventory / capital are the main levers of any supply chain. Network provides required speed and flexibility. Planning and order management enable having the right inventory at the right place at the right time and ability to access it anytime.

Supply Chain = network of the weakest links

Manufacturers typically have to grapple with this maze of legacy systems, disparate point solutions, and data locked within the ERP. 

Sales, operations, finance, analytics teams, and business leaders don’t have a single source of data and thus cannot easily make quick, agile decisions. Channel partners cannot effectively collaborate and are forced to make reactionary decisions, instead of nurturing a collaborative, engaged business relationship. To solve this problem, manufacturers must leverage an “engagement layer” that unlocks data from legacy systems and allows every customer function to communicate and collaborate using a single source of truth.

Technology at manufacturing companies has advanced so quickly the traditional path to purchase is gone. We now live in an omni-channel environment and need to be able to influence the sale wherever and whenever the consumer is interested. With people working remotely, there had to be an efficient way to collaborate on projects. 

It is no longer possible to get away with operating in silos.

A guest column at CIOL, the supply chain encompassing the e-commerce and delivery ecosystem within the Indian economy. Here, the author envisions and shares his views on digital and advanced distribution systems overall developing the networks.

Author: Kuldeep Kumar Upadhyay, Director—Industry Advisor Manufacturing, Salesforce India