Customer experience is driving the next wave of supply chain innovation, according to a new report, but market leaders are also giving short shrift to emerging technologies like blockchain and drones.
The research, ‘Competing on Customer Experience: The Driving Force Behind Supply Chain Innovation,’ explores the links between supply chain management innovation, customer experience, technology adoption, and company performance.
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Released by supply chain software and services specialist BluJay Solutions, and research firm Adelante SCM, the research is based on interviews with supply chain executives from across industries including manufacturing, retail, and logistic service providers (LSPs).
“The most important lesson learned from companies that have been disrupted is the danger of becoming too complacent with the status quo,” said Doug Surrett, chief product strategist at BluJay Solutions.
“As we move into the next evolution of supply chain logistics, it’s not just about getting goods from point A to point B at the lowest cost, it’s about innovating with a clear objective to optimize the overall customer experience. This requires an approach that considers the entire supply chain ecosystem.”
Market leaders place customer experience at the centre of supply chain design
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By GlobalDataThe report uncovers the close affinity between above-average performers and innovators, who both measure customer experience and rank it as the top factor in supply chain innovation. Conversely, average or below performers and laggards measure customer experience much less and identify cost reduction as the driving factor in supply chain innovation.
The data indicates that logistics service providers (LSPs) are champions of enhanced customer experience as they look for ways to differentiate themselves, focusing less on competing on cost, which often leads to commoditization.
Cost is a top factor among shippers (manufacturer, retailers and distributors), where cost reduction or competitiveness is still a key indicator for success.
Innovators place greater emphasis on looking beyond internal systems to improving the entire supply chain
Innovators/early adopters seem to have matured to the point where they are less concerned about their existing systems and are now looking at outwardly focused needs – such as supply chain flexibility/innovation, and working with other functional groups. Additionally, they have adopted an integrated solution for managing their supply chain.
In contrast, laggards are still focusing on updating their antiquated systems and are trailing on adopting integrated solutions. A majority of laggards are still relying on Excel spreadsheets to manage their supply chain.
These findings suggest that in order to drive faster and more efficient supply chain innovation, leaders need to find flexible, future-proof solutions (like cloud infrastructure, open architecture) to continue to innovate; while laggards must leapfrog ahead by replacing their outdated IT systems with modern ones that eliminate the silos that still exist between their systems and processes.
Transportation, visibility, mobility, and automation will occupy greatest mindshare as companies look to the future
In terms of the future, the five supply chain investment priorities that received the greatest percent of overall top rank votes were: Transportation, Supply Chain Visibility, Warehousing, BI/Analytics, and Trading Partner Connectivity.
The results are not too surprising considering that many of the respondents are involved with transportation, and that many of these investment areas, especially Supply Chain Visibility, will continue to be of key importance as more companies look to optimise their operations, decrease costs, and improve the overall customer experience.
Despite all the hype surrounding blockchain, drones, and driverless trucks, those technologies ranked near the bottom of the list in terms of which technologies will deliver the most innovative benefits to the supply chain in the next five years. Instead, companies believe technologies such as Mobile Devices and Apps, Control Tower Visibility, and Warehouse Automation/Robots will lead the way.
In general, the top three technologies are all further along the maturity curve and have more established records of delivering benefits than the technologies lower on the list. The findings suggest that perhaps there’s still a level of scepticism or a “wait and see” attitude among supply chain executives when it comes to some emerging technologies.
