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The Supply Chain Management Blog covers the latest in SCM strategy, technology, and innovation.

Oracle CEO Mark Hurd: Tomorrow’s Supply Chains Will Put Customers First

Guest Author

By Jim D'Addario, Director of SCM Product Marketing

Most people don’t think about customers when they hear the term “supply chain,” but modern supply chain professionals know customers are an increasingly important component of the equation. The rise of ecommerce has made the supply chain integral to today’s customer experience. Today, 96 percent of Americans shop online, and ecommerce is expected to generate $4.9 trillion in sales worldwide by 2021.

Oracle CEO Mark Hurd understands the criticality of efficient supply chain practices. He wrote a book called The Value Factor15 years ago, clearly anticipating the importance of the supply chain to customer satisfaction and brand loyalty. Since joining Oracle in 2010, Hurd has continued to emphasize the importance of supply chain efficiency.

At last year’s Modern Supply Chain Experience conference, he said “immediate gratification is now core to everything we do... If you can’t make what I need available to me now, I’m buying from somebody else.” At the 2016 Oracle Leaders Circle event in Mexico City, Hurd noted, “The customer has all sets of new tools, new applications, new services, new devices. They can get information anytime, anywhere. They can cross shop you anytime they want.”

These two statements are well-supported by the available data. A 2017 survey by eFulfillment Service(link opens PDF) found that half of consumers value shipping speed more than shipping price. The same survey found that only 42 percent of consumers consider a fairly “standard” shipping time of three to four days to be fast. It’s only once you get shipment times down to two days or less that wide majorities are satisfied with shipment speed, as 89 percent of eFulfillment’s surveyed consumers thought two-day shipping was legitimately fast.

In 2016, another survey found 66 percent of consumers would switch to another retailer if they had a poor delivery experience. But, to make it that far into the buyer’s journey, retailers have to earn business by offering economical and fast shipping options. Not only do your customers want fast shipping, they want to know exactly how fast their orders will arrive via real-time order tracking. A 2018 survey by Dropoff found 88 percent of American consumers want to be able to track their shipments in real time.

Speed, cost, availability, and reliability. Your customers want it all, and you can’t deliver on the promise of a great customer experience if you can’t get them what they want when they want it. This can be difficult enough for a business with centralized operations. Once you’ve expanded to the point where your orders ship from multiple locations, efficient supply chain management and effective customer service are intrinsically connected. That’s why it’s so important to have SCM systems and customer experience (CX) systems that work together and support each other, with modern functionalities and automations.

Oracle SCM Cloud and Oracle CX can work together to keep your customers happy from the time they visit your website to the time their order arrives. And, despite their differing operational functions, Oracle SCM Cloud and Oracle CX can provide employees with highly useful tools built from the same foundation. For example, chatbots have become a hot tech topic for customer service, but did you know they can be deployed to help supply chain professionals work more efficiently as well? Check out Evelyn Mei’s Supply Chain Management Blog post from last year to learn more about how chatbots can be used in the supply chain.

Eventually, these chatbots will be largely automated, whether you’re using one to interact with customers or to make your life easier as a supply chain professional. At Oracle OpenWorld 2018, Mark Hurd predicted that “85 percent of interactions with customers will be automated” with AI.

And it won’t just be chatbots that’ll be automated in the SCM and CX systems of tomorrow. Hurd also noted the effort currently required to manually track goods as they move through the supply chain, saying, “65 percent of managers spend their time manually tracking the shipment of goods,” and proposing automated, blockchain-based tracking as a way to take such tedious work off of their hands. Further into the future, autonomous delivery vehicles could also transform the supply chain by providing truly intelligently, optimized, and always-on transport and logistics services. Same-day delivery might be obtainable when everything that works to get orders to your customers is plugged into the same system and never needs to sleep or seldom needs a break.

Today’s best supply chains already keep the customer in mind throughout a product’s journey, from the facility to the buyer’s front door. Tomorrow’s supply chains will have to build on the concept that customer demands will dictate strategy and logistics.

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