Flash back to the world before COVID-19. It feels like a lifetime ago, doesn’t it? Back then, customer centricity was important, accelerated with the epic success of Amazon. The company raised the bar with a powerful recommendation engine and responsive supply chain that gets products from its massive inventory to individuals within a day—or less. And in the digital age, customers became more informed, which drove high expectations of the products and services they chose to purchase.

Much more than a buzz word  

These things are still true today. But here’s what’s different. Excelling at customer centricity has gotten very complicated, very fast.  During the pandemic, customer fails had extraordinary consequences. There were frontline healthcare workers going without personal protective equipment, supply shortages slowing down vaccine researchers, and families unable to find vital supplies to protect themselves from the virus.

With all the uncertainty around future potential disruptions – and even the future of the economy itself – customers’ attitudes, behaviors and expectations are a moving target.  So as organizations reinvent their supply chains for resilience, they must emphasize the customer.  Because there’s no resilience—and there’s no outmaneuvering uncertainty—without customer centricity.

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From cost focus to value driver

This is a mindset shift for many organizations. Historically, the supply chain function was viewed as a cost center. Cost efficiency is still critical, of course, but a transparent, predictive and resilient supply chain is a value driver. It can drive sustained growth at a time when companies are scrambling for new sources of growth as the global economy hurdles toward a recession.

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of the supply chain executives who we surveyed see it as a growth enabler.

Source: Accenture Supply Chain Pulse Research, 2018

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A relentless customer focus—right products, right price, right place and right time —is key to this shift from cost focus to value driver. All this must be done in a multi-channel environment with customers placing orders through various methods expecting to get their order fulfilled in whatever way is convenient for them, whether that be collection from store or delivery to a location of choice. There is significant upside for the business. Our analysis based on a $10 billion company shows that a customer-centric supply chain can increase sales by $50 to $100 million, in addition to dramatic cost efficiency. 

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A customer-centric supply chain can increase sales by $50 to $100 million, in addition to dramatic cost efficiency. 

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Everything hinges on data

It takes transformation to build a customer-centric supply chain that drives performance improvements like this. The most important part is to start the transformation from the customer’s perspective—keeping in mind just how changeable this can be in today’s environment. However, it goes without saying that data insight—and the intelligent supply chain I discussed in my last blog—makes or breaks success.

Having real-time data across the supply chain can drive real-time visibility and enhance decision making. But it also provides the rich customer insights necessary to drive true customer centricity. It’s how companies learn who customers are, predict what products and services they need, and enhance those services for them to drive a richer customer experience. In the today’s extreme circumstances, this insight is more important than ever.

Customer centricity in action

There are tremendous opportunities to use digital technology enablers to anchor every phase of the supply chain around the customer. Let’s explore two areas that I’m most excited about.

Consider demand planning. Using data, artificial intelligence (AI) and machine learning to predict customer demand—accounting for factors like seasonality, weather, promotions, and even social media trends—companies can take inventory management to the next level, reducing working capital and driving customer satisfaction. Just think how essential this capability is when so many of the assumptions that companies have held onto for years about demand patterns essentially no longer apply.

Before COVID-19, we worked with a leading North American retailer to reinvent demand planning related to promotions. We designed specific algorithms and used machine-learning to more accurately project future demand, driving up forecast accuracy.

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of customers in search of an item on promotion are able to buy it.

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Not only does this drive higher revenues, it improves customer trust. Today, these same machine learning models can help retailers like this one make sense of swings in demand related to events like COVID-19 or the economic climate.

Logistics is another important area for customer centricity. Using real-time data and IoT to track products, companies can confirm that the right products are delivered on time. AI and machine learning make it possible to analyze supply and demand patterns and build flexibility into distribution processes to increase the likelihood customers have good experiences.

Customer centricity is born in the supply chain

At the end of the day, a company’s investment in customer centricity means nothing unless they get it right in the supply chain. If customers can’t get what they want, when and where they want it, does anything else really matter? This is why the one thing that every supply chain needs is customer centricity—an undeniable part of the shift to recovery and renewal.

Please connect with me directly if you have more questions about building a customer-centered supply chain.

Chris Karney

Managing Director, Global Supply Chain /Industry X Offering Lead – Accenture Operations

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