Glance into Customer Centricity: Transforming Supply Chain Management

Abuzar Talibov
Jul 7, 2023
2 min read

Updated: Oct 29, 2023

In the previous post - Potential Supply Chain Risks and Mitigation Approaches, we had a chance to touch on the risks in the supply chain and the possible mitigation methods. In this post, we will focus more on the way of building a customer-centric supply chain. In today's ever-changing landscape, the global supply chain is undergoing a revolution characterized by uncertainty and resilience. It has become essential for businesses to assess risks, implement strategies that enhance customer satisfaction, and mitigate the rising costs associated with disruptions.

Even before the pandemic, various events had already caused temporary production disruptions, but the COVID-19 pandemic and challenges like the chip shortage have further accelerated these disruptions. Consequently, in this era of unprecedented uncertainty, embracing a customer-centric approach has become crucial for building resilient supply chains.

According to the research conducted by KPMG, in the present day, customers are more knowledgeable, connected, and demanding than ever before. Meaning that they, on the one hand, require to have their needs be fulfilled on time and at the same time demand that companies be more transparent and efficient in their supply chain processes.

What about figures, does it even profitable to be customer-centric for companies?

Deloitte defines that customer centricity comes with consumer connectivity, it refers to the supply chain's capacity to digitally perceive, engage, and serve customers by delivering precisely what they desire, regardless of time or location.

Consumer connectivity relies on three categories of consumer data:

Sentiment: This entails capturing what consumers express they intend to do. Examples include statements like "I would love to have product X," "I desire a specific feature," "I'm seeking a product within this price range," or "I prefer shopping through this particular channel."

Behaviour: This involves observing the actual actions consumer take. It encompasses shopping patterns, impressions, brand interactions, return rates, and purchase prices.

Social: This encompasses how consumers respond to and share their experiences. It includes factors like reviews, ratings, referrals, personal conversations, and comments made on social media platforms.

Proper obtaining and analysing this data, companies can create a competitive advantage in the market.

How to build Customer-Centric Supply Chain?

Basically, it should be a shift from a traditional supply chain to a more agile approach, or in other words from Push Strategy to a Pull strategy:

In the traditional supply chain approach, companies aim to focus on low-cost production areas, which eventually leads to more profit margins. But nowadays, customers are prone to have more customized products, which is a huge challenge for traditional supply chains. Because, reflecting this fast-paced demand require having agile planning, scheduling and production activities by putting the customer in the centre of the supply chain.