The Customer Centric Supply Chain
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This document discusses the shift in power from manufacturers to retailers to consumers in the retail industry. It emphasizes that fulfillment excellence, which focuses on consistent service delivery and meeting consumer expectations, has become a strategic priority. It also outlines characteristics of leading companies that have adopted a service-centric supply chain model with customer service as the top principle.
The Customer Centric Supply Chain
- 1. All IDC research is © 2013 by IDC. All rights reserved. All IDC materials are licensed with IDC's permission and in no way does the use or publication of IDC research indicate IDC's endorsement of SAP’s products/or strategies. FULFILLMENT EXCELLENCE What do I stand for? An IDC Infographic, Sponsored by SAP Service The Power Shift The Customer-centric Supply Chain Fullfillment Excellence... Or Not! CustomerCentricityDrives Cost Product Quality Cost Product Quality Service But Service Excellence Becomes a Strategic Priority All important... The Empowered Consumer Manufacturer • Innovative • Brand Loyalty • Performance - differentiation • Value • Margin • Retail Differentiation • Price • Availability • Shopping - Experience Retailer Shopper THE‘OMNI’ STORE The seat of power has shifted in the industry from manufacturers (1980 and early 1990s) to retailers (late 1990s and 2000s) and now sits firmly with the consumer who has ubiquitous access to information to make more informed decisions and purchases The empowered consumer means: Focus on consistent service delivery Service trumps cost. Meeting and Exceeding Consumer and retailer expectations in: On time, in full deliveries Rapid replenishment On-time-in-full On Shelf Availability Perfect Order Time to Recovery Service Centricity Fulfillment Excellence Board-Level Metrics Short order lead-times Flexible transportation modes Integrated execution … including transportation spend management and carrier contract adherence Fulfillment Excellence Is An Enabler for Real Business Requirements Like Delivering Superior On-Shelf Performance Or Meeting Compressing Lead-Time Requirements. Long Lead Times Global Complexity SRM Risk Management Profitable Proximity Big Data/ Analytics Mass Customization Lead-time Compression Smart Fulfillment Segmentation Modern Postponement Big Data/ Analytics SUPPLY DEMAND The Resilient Supply Chain SUPPLY CHAIN EXECUTION IMPLICATIONS Flexible Supply Responsive Factory Networks Visibility and Transparency What I need, When I Need It, In the Right Form Integrated Business Planning & Executions Agile Inventory ON DEMAND SIDE OF SUPPLY CHAIN, RECOGNIZING NEED FOR BETTER SERVICE LEVELS AND MASS CUSTOMIZATION 19901980 2000 TODAY Consumer Focused Manufacturer Focused Retailer Focused Recognized As Way To Differentiate Products, Bolster Customer Satisfaction And Loyalty, While Improving Revenue And Profits. SERVICE EXCELLENCE SERVICE-CENTRIC SUPPLY CHAINS, WITH SERVICE AS A FIRST PRINCIPLE Manufacturers Look Again to Final Product Definition Postponement Techniques and Data Analytics to Drive More Effective Customer Insights and‘Smarter’Fulfillment. Leader (Best in Class) Service-Centric Supply Chain Cost-Centric Supply Chain Quality-Centric Supply Chain Fast Follower Laggard NOT APPLICABLE • Customer service as a first principle • Board-level metrics • Clear organizational focus and business processes • Customer service as a first principle • Board-level metrics • Clear organizational focus and business processes • Customer service as a first principle • Board-level metrics • Clear organizational focus and business processes • Customer service as a first principle • Board-level metrics • Clear organizational focus and business processes • Customer service as a first principle • Board-level metrics • Clear organizational focus and business processes • Customer service as a first principle • Board-level metrics • Clear organizational focus and business processes • Comprehensive and cutting edge use of enabling technology • Inconsistent balancing of innovation delivery • Organizational focus • Limited business processes and largely manual or spreadsheet adoption. • Inconsistent balancing of customer service • Organizational focus, • Limited business processes and largely manual or spreadsheet adoption • Measured use of enabling technology • Technology investment prioritized for efficiency and elimination of internal waste. • Very focused use of technology where cost savings are readily apparent. • Technology investment prioritized for “flawless”innovation implementation. • Very focused use of technology where innovation implementation opportunities are readily apparent. Fulfillment excellence is likely to be adopted by the leaders and fast followers that feel service centricity is most appropriate for the success of their business, along with leaders that adopt either a cost-centric or a quality-centric approach.