Improving the Supply Chain for Customers

Improving the Supply Chain for Customers

Can your supply chain deliver what your customer actually wants? The answer for anyone who remembers crazy toilet paper shortages is clearly: Not always. Although panic buying-related shortages are hardly the result of a lack of effort or intelligence on the part of suppliers, retailers, or distributors, they are a symptom of a bigger problem: Supply chain challenges that make the experience less than ideal for customers.

The role customers play in the supply chain

Without customers, there would be no need for a supply chain. It’s as simple as that. It’s often easy to set aside customers’ critical role, assuming they will always be there. However, organizations who have let customers down on delivery, price, quality, or value soon learn that customers are fickle: Unless they’re given a good reason not to be.  

“We see that the customer is more and more in the driver’s seat,” says Paul Greenberg writing in ZDNet. That’s why customer experience (CX) plays a crucial role in supply chain management (SCM). “The objective of enabling a positive customer experience is to increase customer loyalty and satisfaction, which can help generate sustainable growth,” he reminds us.

How the supply chain has evolved for customers

Customers expect speed, flexibility, and individual value regardless of whether you're selling directly to consumers or businesses. A traditional measure of success has been volume and growth. But these metrics don’t give us a complete picture. Paul says, “With the technology available to us, and the willingness of people to communicate their thinking via social channels, we have such a great chance to listen and understand the user/customer through the data we can collect online.”

A customer-centric supply chain aims to meet and exceed customer expectations. Only once customer needs are understood can this be translated into supply chain processes. In the past, processes have often hindered effective SCM because they have been designed or evolved entirely independently of customers. The alternative is to re-imagine any processes that touch the customer – including streamlining order management processes, building quality targets into supplier and manufacturer agreements, and managing the demand chain appropriately. The Enable CEO, Andrew Butt, summarizes this challenge in an article in SupplyChainBrain.

“Manufacturers and distributors can no longer afford to view the supply chain as a strictly internal function that stands apart from customers. Instead, they need to focus on interconnected, data-driven demand chains, which can streamline processes while improving the customer experience.”

– Andrew Butt, CEO, Enable

  • Improved understanding of the demand chain

Focusing on the demand chain can enhance organization-wide customer relationships. By integrating customer knowledge across sales, marketing, and customer service, a true picture of customer purchasing behavior and satisfaction emerges.

But it’s not easy to generate, track and fulfill customer demand when elements of the customer relationship are disjointed. Writing in Inbound Logistics Magazine, Andrew Butt recommends a solution to improve customer-related information sharing. “Suppliers and distributors can build sustainable relationships by sharing information across all segments of the supply chain, bringing goals and strategies into alignment, and accounting for changing consumer demand and economic circumstances with a robust rebate management platform.”

  • Addressing e-commerce opportunities

No article on improving the supply chain for customers would be complete without acknowledging the paradigm-shifting role of e-commerce in purchasing behavior and customer expectations. In another article about how distributors can evolve in a disrupted world, Andrew suggests several core principles that can help distributors navigate this new economic landscape:

  • They must be capable of aligning partners on goals and strategies, which means facilitating data visibility, implementing an effective rebate strategy, and developing an e-commerce platform that provides a seamless customer experience.
  • Digitization should underpin all of these initiatives, as it enables effective communication and collaboration while providing a single source of information for all stakeholders.

These principles apply to anyone seeking better, more rewarding customer relationships, which ultimately improve loyalty and sales.

  • A focus on customer experience

Customer expectations have increased dramatically. Customers expect staff to be knowledgeable, dependable, and empathetic when they contact customer service. One way of improving the customer experience is by training customer service reps well, ensuring that systems allow visibility of customer service related to orders and “create a cohesive experience across subsidiaries,” as Wesley Burger explains in SDC. In rebate management contexts, ensuring consistency has historically been a significant challenge.

How to tailor the supply chain to be more customer-centric

Is it time to evolve the supply chain to serve customers more effectively? McKinsey suggests that in a far more complex business environment, consumer companies can rethink—and potentially redesign—their supply-chain operating models for the resiliency and agility they need.

While successful retailers (both online and in traditional stores) have navigated the crises better than others, McKinsey says, “we find that most companies’ supply-chain operating models have evolved largely through inertia.” The lack of a deliberate, systematic process of evolution tends to result in disjointed and well-intended but isolated exemplars of best practice.  

At Enable, we see this all the time with the management of B2B customer rebates. With the best intentions, the number of deals intended to incentivize purchasing behavior proliferates over time. Unfortunately, most companies’ ability to manage these effectively does not increase proportionally. As a result, this tactic which could be a revenue driver, languishes behind other customer-serving activities like the shy bridesmaid at a wedding.

The alternative to leaving rebate money on the table is adopting a rebate management system that can save you time and effort. More importantly, however, putting together deals that actually serve customers can improve the supply chain for all concerned.  

Rebate management tools help improve consistency

Before Plumbing and HVAC supplier R.E. Michel started using Enable, Beau Michel, their Director of Purchasing & Distribution, explains how challenging it was to apply rebates consistently.  

[Before using Enable, we had a lot of challenges…] Firstly, getting everybody to have the same level of involvement in managing their lines and their rebates. Some people are very good at that and can keep accurate records, and other people are not. So that was the biggest problem. There was no consistent level of attention to the rebate programs.

- Beau Michel, their Director of Purchasing & Distribution, R.E. Michel

Rebate management tools help service customers better

When rebates flow seamlessly, everyone wins. Bob Gay, Manager of customer profitability and rebates at Advance Auto Parts, explains how information from their rebate management platform enhances their ability to serve customers.

“By centralizing our information and making it available to partners in easy-to-digest reports, we can drive decisions [about] where customers obtain products, how quickly they obtain them, and the assurance they are paid both timely and accurately.”  

- Bob Gay, Manager of customer profitability and rebates, Advance Auto Parts.

He explains, “Now we're not spending all our time worrying about rebates, but looking at them as a way to engage with our customers.”

Managing rebates more effectively can improve the supply chain for customers

At Enable, we support the entire supply chain ecosystem. Our goal is to make the supply chain better for all concerned:

  • We want to enable manufacturers to build a strong ecosystem of distribution partners who can help them serve customers' needs better.
  • We want to make life better for wholesalers and distributors by enabling them to work more closely with manufacturers to craft go-to-market strategies that deliver mutual growth.
  • And we aim to make the supply chain better for dealers and end customers by supporting expert local dealerships to deliver products to their customers at the right price.

While the supply chain is an intricately interwoven network of participants, the customer should ultimately remain our focus. The right tools to identify, interpret and satisfy customer needs make the supply chain better for all parties.  

Enable’s cloud-based rebate management software helps drive profitable growth by making it easy to create, execute, track and collaborate on trading programs. Sign up for a free trial and discover how to spend less time on manual rebate management and more time building stronger customer relationships.

Elizabeth Lavelle

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