Customer Centricity The FOCAL Agenda of CSCOs

Customer Experience and Supply Chain have become a symbiotic relationship. A Gartner study has also reflected the same notion and emphasized that supply chain is increasingly focused on customer service and offering differentiated services and fulfilment options, all in alignment with the enterprise agenda. Customer fulfilment can optimize profitability, operational efficiency, customer satisfaction and customer loyalty. Our recently held panel discussion, ‘Customer Centric Supply Chains’ during the 5th edition of Celerity Supply Chain Tribe Awards, deciphered on the parameters that supply chain managers need to re-invent for improving customer experience, highlighted the best practices being adopted by leading companies in the customer enablement journey and most importantly, discussed the do’s and don’ts towards achieving a truly customer centric supply chain. An excerpt…

ACCORDING to research conducted by Accenture, the top 90 supply chains have achieved 13% higher growth, three times higher contribution to total revenue. One of the differentiation points of top supply chain players compared to their peers is to start thinking with customers in mind. In other words, they build a supply chain strategy based on customer values. They are aware that meeting these changing customer expectations can make a significant difference, so they focus on the most important value propositions when investing in the supply chain. To establish growth, they adopt customer-centric supply chain strategies.

Customer-centric supply chains focus on the experiences of their customers in all supply chain operations to meet their demands. In other words, manufacturers focus on how they present their goods and services to the ever-changing market in addition to operational efficiency. They must be able to timely obtain, correlate and act upon demand requests to make decisions in planning, routing, and scheduling activities throughout the supply chain. This, in return, leads to an increase in customer lifetime value, customer satisfaction, and profitability while reducing churn.

Becoming a customer-centric organization can be a complex and timeconsuming process. However, if adopted, companies are empowered to focus on their customers and quickly adapt to meet changing customer needs, which makes them gain adaptability and resiliency. One of the reasons why companies need adaptability is because the volatility, both on the demand and supply sides, is high. This requires companies to be more agile or, in other words, to increase their capability to change. In order to do so, companies need to gain visibility and understanding of the affected parts of their supply chains to be able to respond effectively and keep satisfying their customers.

In addition to customer satisfaction and increased responsiveness, a customer-centric supply chain offers an operational environment where every decision maker within the organization has a clear comprehension of the impact of every decision on every single customer’s service level and holds the pulse of endto-end operational dependencies among different levels of the supply chain.

With this as the background, we asked supply chain industry experts about their journey towards customer centricity. Here’s what they said…

What are the prominent changes in the supply chain you have witnessed as far as consumer behaviour is concerned? How are you addressing them?

Sreenivas Rao Nandigam, Global Head - Supply Chain, Sun Pharma: Customer centricity provides pharma companies with a blueprint for engaging all parties by focusing on their needs and priorities, highlighting product value, and delivering quality products and services. As healthcare delivery shifts from consumer awareness to decision management, pharma companies must analyze and act on data about patients, physicians, payers, and other stakeholders to engage decisionmakers at every level. Over the past few years, the ensuing global changes have accentuated the importance of customer centricity in pharmaceutical industry. For us at Sun Pharmaceuticals, customer centricity is not just about looking at the distributors’ supply chain or only the end consumer, we need to place greater emphasis on the people who are actually influencing the demand. For pharmaceutical companies, our ultimate customers are medical professionals because they are the ones who influence and prescribe the medicines to the end consumer. It’s important for us to look at the overall ecosystem. Imagine if the doctor prescribes a particular medicine and that medicine is not available on the shelf, the entire chain continues of going back to the doctor and getting an alternate medicine prescribed. We started monitoring the availability to start with at our CFA/Depot location and improved that metric from a very low number to more than 94% for CFA-SKU combinations across the country, the next step was to look at the availability at the key distributors. OSA at chemist level is perhaps the next step in the next 2-3 years.

Sukanta Das, President and Chief Logistics Officer, Hindalco Industries: To answer this question let’s first try to see how much we as consumers have changed when we look for any specific product or a manufacturer. All of us are consumers in one way or other and when we look at the changing behaviour, it now goes beyond the product, we now look at fulfilment capabilities of the company, origin of the product, reviews in the market, etc. In this regard, I recently came across an interesting survey where it was stated that 95% of consumers monitor their order life cycle throughout its journey on the digital platforms. 30% of consumers drop-off or empty their cart due to unavailability next-day or 1 day delivery. If that’s true in the B2C space, let me add that there is also a huge shift in consumers’ behaviour in the B2B sector where everybody is looking at the delivery timelines, post purchase serviceability and the transparency. And I think time has come for B2B players to provide end-to-end traceability and transparency in supply chains to our customers. Additionally, with sustainability gaining importance, customers are also focusing on greener mode of transportation and environment friendly packaging. At

Hindalco, we lay immense thrust on each and every process before dispatching the final product to our customers in order to cater to their requirements and we are continuously evolving to serve our customers with the most sophisticated and reliable supply chain practices.

Rajat Sharma, Head – SCM, Hamilton Housewares Pvt. Ltd.: Supply chains are facing constantly changing demands as consumer behaviour changes, especially as new channels claim and attempt benchmark terms and lead times on deliveries as well as purchase experience. Today’s supply chains have started to eye deliveries within hours of purchase transactions, whether through partnered Omni-channel supplies or dark stores or piggy backing on conventional channels etc.

We’re also servicing demands of quicker deliveries with the ability to cancel orders or return goods within a certain period if the products do not match the customer’s expectation in any way. This is being managed by engaging with Modern retail chains and ecommerce partners apart from the conventional walk-in channels. To effect this, we invest in shelf availability in offline and online formats and entering into last-mile logistics relationships with specialized agencies. This also requires inventories to be stored, processed and dispatched at a pc level. This is also being managed by supply chains maturing to set up and run a much larger number of FCs compared to the conventional chain of distributors, wholesalers, dealers and retailers. Thus, we invest in Technology, People and Infrastructure that optimizes such networks and processes.

Sreenivas Rao Nandigam, Global Head - Supply Chain, Sun Pharma

For us at Sun Pharmaceuticals, customer centricity is not just about looking at the distributors’ supply chain or only the end consumer, we need to place greater emphasis on the people who are actually influencing the demand. Customer centricity provides pharma companies with a blueprint for engaging all parties by focusing on their needs and priorities, highlighting product value, and delivering quality products and services. As healthcare delivery shifts from consumer awareness to decision management, pharma companies must analyze and act on data about patients, physicians, payers, and other stakeholders to engage decision-makers at every level.

TS Venketram, Co-founder, UNPAUSE

Consulting: Over the course of 5-6 months, we are trying to help companies with their supply chain management journey. During the exercise, we have observed key three things –

Companies have started talking about Agility and Responsiveness. A lot of discussion has been happening across the boardrooms of organizations on the basic process adherence, changes that need to be incorporated particularly around sales & operations planning and integrating business planning processes. In short, they are attempting to ensure there is a smooth operational flow within the organization. In order to achieve that, companies are focusing a lot on the cultural shift of leadership to own the processes so that it can have trickle down effect.

Second most important change we have witnessed is Resilience. Having faced umpteen global disruptions lately, companies are looking to shield themselves from such unforeseen eventualities. Companies are focusing on strategic supply chain planning to achieve resiliency as it synchronises all components of the supply chain and drives greater visibility and agility. This connected, forward-looking approach helps businesses better anticipate issues, limit the impact of supply chain disruptions, and improve overall operations.

Third and most critical change is about companies driving these changes in a Sustainable fashion. These changes have been completely driven by an aware end consumer. They are reading labels