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What is a customer-centric supply chain?

What is a customer-centric supply chain?

A customer centric supply chain is quite self-explanatory. As the name suggests, it focuses on the customer’s feedback, reviews, and suggestions. Customer-centric supply chains make constant changes to enhance the customer experience, the products and services provided by the company are altered and redesigned to fit the customer’s criteria as accurately as possible. This assists the company in reaching a higher satisfaction rate as they continue to innovate the products, and offer customers what they are looking for!  

 

The crucial point in running successful customer-centric operations is data analysis. Understanding your product or service’s market is vital, data analysis provides you a firm base for making a decision and shaping the product’s direction. Along with data analysis, general customer reviews and social opinions are also brought into the discussion, the idea is to exceed customer expectations by providing them with the product they want before they even ask for it.  

 

HOW IS A CUSTOMER-CENTRIC SUPPLY CHAIN DIFFERENT FROM A TRADITIONAL SUPPLY CHAIN? 

In a traditional supply chain, the customer is placed at the end of the cycle. It starts with the collection of raw materials, then its delivery to the supplier, followed by its transfer to the manufacturing department, and then finally distribution to the customer. Notice how this cycle involves customers only at the end? And they have no say in the entire process, they only get to see the final product. Then they make their decision of purchase based upon that.  

 

A report shows that:

  • More than 90% of customers actively track their orders online  
  • 81% of customers aren’t willing to pay a fee of $5 for same-day delivery 
  • 27% of customers have canceled their order because the same-day delivery was unavailable 

These are some of the recurring issues faced by the traditional supply chain. However, in a customer-centric supply chain, the customer’s input is put forward and taken into consideration at each step.  

 

Customer data and background, buying patterns, purchasing conditions, and required changes, all are a central part of this supply chain. Bringing change from a very early stage of raw material and manufacturing, as per the customer requirements only required and a limited amount of material is bought. Stocks for manufacturing are divided based upon customer demand in multiple locations rather than equal distribution and maintenance of inventory at all warehouses. This reduces the risk of losing unwanted material and expedites the manufacturing process. 

 

Once the product is ready, it is distributed through quick routes and multiple channels to ensure that customers acquire delivers in no time, and through the nearest pick-up points. In the case of shipping and delivery, customers are provided with the access to track their orders, which builds a sense of security that assists in building the trust of the customer.  

 

This strategy has done exceptionally well, the number of recurring customers has increased significantly, and the customer satisfaction rate has improved as well. Factors that matter the most in the customer-centric supply chain are; 

 

  • Customization  
  • Agility  
  • Building Trust for your brand  
  • Innovation  

Customization allows you to separate your brand from others, and form a unique identity. Brands such as apple have formed their fan base of users that are sold on the idea of customization.  Along with customization and tailored products, agility is very crucial.  Availability of your product in the market at a convenient time provides you with an edge over your competition. All things go in vain if you fail to build trust with your customers, Trust is the most important factor in customer-centric supply chains. Business often doesn’t make huge profits in the early stages and they rely on building a long-term relationship with their customers which prove to be more lucrative in the long run. And last but not the least, innovation! No one can sell the same product again and again and again! Innovation is necessary for brand building and customer retention. Companies that innovate their products at the right time are always successful in the market.

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