Chris_Jones-executive-headshot-photography-0008Last
October, I wrote a post introducing the concept of the Customer Facing Supply
Chain and how it expands the value of the supply chain in the enterprise. There
has been a lot of interest in understanding how to create a customer-facing
supply chain. The following is such an example for retailers and their home
delivery operations.
Enhance
the Entire Shipping Experience
Let’s
start with the customer-facing supply chain fundamentals for home delivery. The
most important concept is that Customer-Facing Supply Chains enhance the entire
shopping experience. Check out the commercial from Australian retail giant,
Woolworths, to get a good idea of the kind of shopping vision that can be
empowered by a supply chain.
For
this kind of vision to become reality, the supply chain needs to become a
valued part of the “front office” by directly engaging the customer. Figure 1,
below, covers the important tenets of the Customer-Facing Supply Chain.
Figure
1: Customer Facing Tenets
Impact
your Organization’s Performance
Customer-Facing
Supply Chains go beyond cost management and meeting customer service targets to
have a greater impact on the overall organization’s performance. Impacting
revenue growth by increasing sales of products and value-added services are an
important part of the Customer-Facing Supply Chain. In addition,
Customer-Facing Supply Chains increase customer engagement, provide
differentiated services and even the brand proposition. Cost reduction is an
important part of Customer-Facing Supply Chains, but that impact happens beyond
the supply chain organization in areas like call center operations.
To
understand the potential business value of Customer-Facing Supply Chains in
home delivery, the potential impact across the customer order life cycle must
be examined. Rather than seeing home delivery as the “get it done” part of the
selling process, Customer-Facing Supply Chains engage the customer and the
retailer’s other organizations at multiple points. Equally, the associated
business value comes in a number of areas that go beyond the supply chain
organization. Figure 2 shows the stages of the customer order lifecycle on the
left and the associated business value on the right.
Figure
2: Home Delivery Customer Facing Supply Chain Business Value
Leverage
Available Technology Solutions
Enabling
technology is an important part of Customer Facing Supply Chains. Figure 3 maps
the key customer order lifecycle steps for home delivery to the type of
technology that benefits them. Dynamic Booking provides customers with greater
delivery choices and retailers with the ability to sell value added services
cost effectively. Delivery Orchestration optimizes and coordinates the customer
order to meet services commitments for the lowest cost and enable fast
delivery. Dispatch & Tracking helps ensure successful delivery and manage
exceptions as well as closing the loop on the commercial agreement with the
customer. Mobile applications enable the delivery agent to be more productive
and offer the customer greater service. Notifications leverages supply chain
information and processes to better engage the customer for delivery success
and better overall experience.
Figure
3: Home Delivery Enabling Technologies
Gather
and Improve Key Performance Metrics
Retailers
that implement Customer-Facing Supply Chains think differently about home
delivery metrics. They evaluate home delivery’s impact on revenue generation,
including increased sales of products, value-added services and premium
delivery windows, as well as reduced buyer shopping cart abandonment. Supplier
participation in home delivery programs is a key metric as leading retailers
see their most advanced suppliers move marketing funds from adds to subsidized
delivery programs. Customer service and brand perception are important metrics,
going beyond delivery performance to include Net Promoter Score, buying
experience, returns process and social ratings. Cost metrics are still
important, but better aligned with value creation such as cost per minute as
opposed to cost per mile or cost per delivery. In addition, cost impacts in
other organizations are tracked and include call center productivity, fraud and
loss prevention, failed delivery reduction, dispute/returns processing and
days-sales-outstanding.
The
most asked question I receive is “How do I get the Customer Facing Supply Chain
transformation started?” There are 4 key
points for success:
Enlist
the commercial organization. They own the customer and revenue. Nothing
significant will happen without their support.
Move
the supply chain value discussion from “get it done” to “get more”. Supply
chain executives need to become part of the revenue, differentiated service and
brand enhancement discussions. At a minimum, the supply chain needs to be
portrayed as adding value across the end-to-end shopping experience.
Link
home delivery to a broader and more relevant set of business metrics. Customer
Facing Supply Chains drive revenue and competitive differentiation, so track
them. Metrics like cost need to be tied to business value drivers.
Engage
the customer. They know best how your supply chain is impacting them and will
tell you if they bought because of how your supply engaged them during the
buying process. Remember, the last mile is the last word and what customers
remember last about your brand.
How
is your supply chain making the transition to customer facing? Let me know.
http://logisticsviewpoints.com/2015/06/09/creating-the-customer-facing-supply-chain-in-home-delivery/