Enabling Customer-Driven Supply Chains: Start with Customer Order Viewpoint

Regardless of what industry you’re in, it’s clear that the pace of change is accelerating. Customer expectations regarding cost, delivery time, and reliability are becoming more demanding, while at the same time the competitive, regulatory, and technological landscapes continue to shift and evolve at a rapid pace. What impact is this having on companies and their supply chain requirements?

“Our customers have elevated expectations, and so do our customers’ customers,” said Eric St. Amand, VP Americas Supply Chain Optimization at Geodis in a recent episode of Talking Logistics. “The biggest shift we’ve seen is that instead of focusing solely on cost, companies are viewing their supply chains as competitive weapons. The table stakes are still there — delivering on-time, in full, and being cost competitive — but you also have a [stronger] requirement for end-to-end supply chain visibility and having better data so that you can be more predictive and proactive.”

Martin Verwijmeren, CEO at MP Objects (a Talking Logistics sponsor), added that they are seeing “the quickly emerging need for customer-driven supply chains,” not just in the consumer realm, but across all industries. “It’s not just about providing the lowest cost anymore; it’s also about providing personalized service…We also see that more and more companies are recognizing that they are part of an ecosystem and that they need to work [more intelligently and efficiently] with multiple parties to achieve superior customer performance.”

It’s this trend toward customer-driven supply chains that is making flexibility and agility critical attributes for success. What impact is this having on technology requirements? Verwijmeren shares his perspective in the short clip below, where he discusses the importance of customization, orchestration, and innovation.

Verwijmeren also offered these words of advice:

Our philosophy, which has been proven successful with the companies we serve, is to start from the perspective of the customer order. Forget about individual functional thinking– like warehousing, transportation, production, etc. — and take a customer order viewpoint and see where the gaps are in terms of agility (your service offerings and delivery options), in terms of speed to market, in terms of cost efficiency, and in terms of compliance and accepted risk levels. Then determine the flows that are the highest priority today and execute those first.

In short, Verwijmeren echoed a key takeaway from “Staple Yourself to an Order,” a famous Harvard Business Review article by Benson P. Shapiro, V. Kasturi Rangan, and John Sviokla published way back in 1992:

Managers who “staple themselves to an order” will not only move horizontally across their own organization, charting gaps and building information bridges, but will also see the company from the customer’s perspective. There’s no better way to alter that perspective, improve interdepartmental relations, and—over the long haul—improve financial performance.

What’s different today compared to 1992 is that the flow of a customer order, thanks to globalization, outsourcing, and e-commerce, involves many more external trading partners and many more potential flow paths than in the past, which makes communication and collaboration between all internal and external stakeholders more important than ever.

I encourage you to watch the rest of my conversation with Martin and Eric for additional insights and advice on this topic, including the role a 4PL can play in enabling supply chain flexibility and agility. Then post a question or comment and keep the conversation going!