A Customer Centric Approach To Supply Chain: Supply Chain Journey Mapping (SCJM)
By Paul Homchick-Oracle on May 07, 2014
By Vikram Singla, Business Development Director, Oracle
Customers are on a journey. Their experiences on this journey will strongly influence their attitudes; their attitudes will, in turn, help form their behaviors, and their behaviors will ultimately drive outcomes. This is why Customer Experience (CX) has become so critical in modern commerce. At its simplest, CX is the set of perceptions a customer has with a company throughout their buying and owning interactions. It is obvious that positive customer experiences enable businesses to attract and retain more customers, sell more products, sell to more customers, and do more business.
How does this relate to supply chain? Well if, for example, a customer had a delivery or quality issue with a previous purchase from your company (experience), they might be reluctant to buy from you again (attitude), so will therefore look for an alternative supplier (behavior), resulting in lower levels or repeat business and reduced sales (outcome).
Historically, CX has been focused on sales, customer service, and marketing. But with the integration of supply chain into end-to-end business processes, it is apparent that the supply chain itself can have a significant impact on CX, both in a business to business (B2B) and a business to consumer (B2C) environment.
But don’t just take our word for it. According to a report from KPMG (“Demand Driven Supply Chains”, 2013), a Demand Driven supply chain approach can result in a 1-4% improvement in sales, a 5-10% reduction in operating expenses and a 20-30% reduction in inventory. Consumers are driving experiences at a much quicker pace and with much higher impact on both the top and bottom line. With the growth of the time-sensitive, always-mobile and always-connected consumer, supply chains have to be both agile and customized to exceed, rather than just meet, the customers’ expectations. Consumers have the power to access social media site and to voice brand concerns within seconds of them occurring. Therefore, An issue with the supply chain will have a far quicker, and more severe, impact on the overall brand/company than in the past. At the same time, as brand promise has strengthened, consumer loyalty and the willingness to suffer a poor experience have weakened. So doing the “same old, same old” isn’t going to cut it for supply chains. Instead we need to look at supply chains from a different perspective – and we believe Supply Chain Journey Mapping may be the answer.
What is Supply Chain Journey Mapping?
All customers interact, both directly and indirectly, with people and things (such as products, processes and technology) over the course of their interaction with a company/organization/brand, and supply chains have a major influence here. For example:
- When innovating new products, companies might work with focus groups or listen to social media. During subsequent design changes they might seek feedback from consumers.
- When consumers start searching for a new product, they find information on features and functions, driven by R&D, through sales and marketing.
- When they are considering buying the product, the trade promotions run as part of supply chain planning, can influence or decide the consumers’ purchasing transaction.
- Once the consumer has made a purchasing decision, the execution parts of the supply chain fulfill the order to ensure that the product is available, on the shelf or delivered on time.
- During the use of the product, the product quality element of the supply chain ensures that the product lives up to the expectations set during brand promise and sorts out any issues that arise regarding reliability, recall, servicing, etc
The customers’ interactions with the supply chain, twinned with external trends and influencers, can help shape their attitudes. The challenge for businesses is to ensure that as customers move from purchasing to using and maintaining the product, they are provided with an experience through supply chains that exceeds their needs and expectations, thus preventing the customer from looking for other providers next time there is a need to buy similar products. If, on the other hand, the customer is not happy with the product or service over their lifecycle of interaction, irrespective of the initial promises made during the sales stage, there’s the very real risk that the customers will look elsewhere next time there is a need. So Supply Chain Journey Mapping is the process whereby we map where, when and how the customer interacts with the supply chain during the course of their relationship with a company.
This lifecycle of interaction is shown graphically in the infinity loop below:
How does Supply Chain Journey Mapping Work?
Supply Chain Journey Mapping (SCJM) is a methodology that we have designed that is based upon the very successful Customer Experience Journey Mapping methodology (CXJM).
We use SCJM to better understand specific customer journeys involving the supply chain that may, or may not, be generating the outcomes we desire or we believe we can improve. For instance, we may end up losing more customers than we acquire if the supply chain is not involved in a trade promotion process, and fails to deliver the goods to the right place, at the right time, and in the right quantities to ensure product availability. To try and understand why this is happening, we map out both the people and the things the customer interacts with during the purchase, receive and recommend phases. We also map the emotions and attitudes these experiences generate, and the behaviors and outcomes that result. Based upon this mapping exercise, we identify one or more “moments that matter” in the customer’s journey, where we believe that if we change the experience we could have most influence on their attitudes to ultimately drive the outcome we desire.
Oracle has recently initiated a series of client SCJM workshops, where we explain in detail the methodology and map a generic customer’s supply chain journey that we’ve pre-prepared. The objective of the workshop is to share the methodology and provide the opportunity to evaluate how it would add value to your organization. The workshops are highly interactive and last a morning or an afternoon. Most of this time will be spent on your feet, so make sure you wear comfortable shoes!
Our first SCJM workshop took place in London on 27th March 2014, and the feedback from the clients that attended has been hugely positive. The photos below show the interactive nature of the workshops – apart from being educational, we really had a lot of fun!
We will be running more SCJM workshops in the coming months. We will update the Oracle Events Calendar as the events are scheduled so check back regularly and use “Supply Chain” in the search feature to find a location near you.
Supply Chain Journey Mapping turns the traditional “inside-out” perspective of our supply chains on its head. When you look at your supply chain from the end customer’s viewpoint, and take an “outside-in” perspective, you start to realize how many parts of the process are geared around delivering the experience that we are interested in, not that our customers are interested in. We predict that this approach can drive innovation in supply chains and deliver business advantage, but what do you think?