Segment the customer base and identify which customers are the most valuable partners. This knowledge is critical during turns when companies face pressure to reduce costs.
“Top customer partnerships are a resource of value creation and innovation worth protecting,” says Coppinger. “Well-developed partnerships come with improvements in service, costs, cash and sustainability. There is no better foundation when exiting a turn.”
During turns, companies often stop discretionary spending, lay off staff, reduce training and cut capital investment. Organizations that aim to win in the turns, however, think long term and forecast for the upturn. These companies have ongoing cost management discipline and practice cost optimization as opposed to cost cutting.
One of the most effective ways that organizations can approach cost optimization in customer fulfillment is to optimize the order-to-cash process and migrate from an isolated functional approach to a cross-functional, process-driven approach. One key goal is the pursuit of zero-touch orders where no manual adjustment is required to fulfill the order. Costs and order cycle times decrease, cash flow improves and, most importantly, resources are freed to provide value-added services to customers.
Read more: 4 Factors That Will Impact the Future Supply Chain
Reliable master data management is crucial to effectively reduce manual intervention. Otherwise, false or insufficient data will always require manual adjustments. Data accuracy has to be paramount.
Migrating the organization from a product-centric to a customer-centric approach requires changes in culture, organization design and talent. It’s very easy for companies to only focus on cutting costs and mitigating risks during a turn. Ironically, this behavior increases risk if it fails to recognize changing behaviors and trends in the market. To adapt to new circumstances, new talent must be hired and existing staff must be trained.
Modern customer fulfillment requires leadership that fosters collaboration and drives a deep understanding of customer behaviors and needs. This is essential to implement advanced techniques such as zero-touch orders and to build strong partnerships with selected key customers.
“ Ramp up digital dexterity — the cognitive ability and social practice needed to leverage and employ various types of media, information and technology”
On the technological side, customer fulfillment is becoming more automated and augmented. Employees need to understand the benefits of and learn to work with new technologies such as robotic process automation (RPA), chatbots and artificial intelligence (AI).
New digital technologies require leaders to ramp up digital dexterity — the cognitive ability and social practice needed to leverage and employ various types of media, information and technology. This means targeted recruitment and improved training and mentoring.
Learn more: Building an Agile Supply Chain