Supply Chain Commentary: Five Challenges to Embrace and Channel into Business Advantages
Disruption can be daunting, especially coupled with pressure from increasing competitive forces and shrinking margins. However, strategic navigation and preparation can lead to positive outcomes. In the supply chain, challenges can lead to improvements in key areas such as inventory management and order fulfilment. Technology innovation can help. A PwC study found that companies with digitized supply chains experience efficiency gains of 4.1 percent annually, with revenue boosts of 2.9 percent a year.
To gain an edge in the “adapt or lose” landscape, decision makers need to examine the sources of disruption for opportunities to add value. Here are the most pressing challenges which, if managed correctly, can improve supply chain efficiency:
- Managing key customer transactions: If we assume 80 percent of profits come from 20 percent of customers, retention of large accounts hinges on the successful management of customer equity. To minimize risk of customer switch, decision makers should refocus on empowering the inside sales team to manage the daily aspects of these transactions. Automating mundane, administrative tasks for sales reps can allow them to invest time in providing high-quality service and resolving customer issues, in turn increasing customer loyalty.
- Competing with new e-markets: New distribution sales channels like Amazon Business promise customers hard-to-beat fulfillment, customer service, and price. In order to compete, decision makers should consider solutions that also enable similar levels of purchase experience. For example, automating manual data entry enables fast and accurate order processing. This greatly reduces time to fulfill orders, meaning customers receive their orders faster, ultimately retaining customer loyalty and increasing satisfaction.
- Understanding unstructured data: The majority of businesses monitor data solely from digital order platform transactions like e-commerce sites. Often, they do not have the resources to derive insights from other channels. However, with 74 percent of wholesale distribution customers submitting orders via email, there lies a substantial amount of data that can inform decision-making. Analyzing digital data as well as unstructured data from emails provides businesses holistic and accurate insight into key trends. For example, knowledge of the quantity of products typically purchased by a customer in a specific timeframe can help decision makers manage inventory more efficiently.
- True cost to serve: An often-overlooked area of operations is true time spent on customer support. It’s an area that businesses should examine as it can greatly affect margins. Comprehensive insight into processing orders from each account can help executives identify which customers are within margin expectations and which are outside of profit forecast. Based on this data, solutions can be developed to target the specific accounts that require improvement.
- Juggling digitization and its impact on customer satisfaction: As organizations race to digitally transform in the name of cost reduction and productivity boosts, potential repercussions to customer satisfaction are often discounted. Decision makers should not only carefully evaluate digital transformation goals, but also make sure to minimize the risk to customer loyalty. Document data entry is one process that is primed for digital transformation with the benefit of enhanced customer satisfaction. Automating manual entry not only maximizes productivity, it also provides sales reps more time to focus on value-added tasks.
Disruption poses as many challenges as it does opportunities. To compete effectively, businesses need to take advantage of change and look for new ways to adapt and grow.