Customer centricity unachievable without a customer-value focused supply chain

To be truly customer-focused, an organisation must reach and sustain a high level of intimacy with its customers, understand their needs and be fully engaged in delivering in line with their requirements.

Supply chains play a strategic role in driving such a customer-centric business strategy, said respondents to the Barloworld SupplyChainForesight 2014 survey.

Over 70 per cent of respondents indicated the importance of supply chains in achieving customer centricity and 92 per cent agreed that customer centricity cannot be achieved without a supply chain strategy focused on delivering customer value.

Furthermore, the majority of respondents held the perception that competitive advantage is generated through a customer-centric supply chain, which “can better understand customer needs and respond to such needs.”

The survey indicates that the understanding of customer centricity as a concept in South Africa goes far deeper than simply offering good service, with 44 per cent of respondents taking a view that customer centricity is a ‘long-term relationship aimed at driving customer delight at every interaction’ and 23 per cent seeing it as ‘thinking deeply about customers’ aims and objectives in both business and personal lives to drive more value before the client asks for it’.

“Respondents consistently reflect a strong desire to become more customer-centric and show an appreciation of the valuable returns of customer centricity to a business,” notes the survey report.

As many as 90 per cent of respondents agreed that ‘customer-centric companies enjoy better returns than those which are not customer-centric’. A further 71 per cent agreed that ‘the human relationship with the customer is far more important that processes and systems’.

However, despite acknowledging the benefits and importance of customer centricity, 67 per cent of respondents felt that not many South African companies are getting it right.

“This critical view of South African businesses points to a disconnect between understanding what is good for business and being able to deliver on it,” notes the survey report.

This disconnect is further illustrated in an interesting disparity in the survey findings; 68 per cent of respondents indicated they deliver sufficient customer centricity to their clients, but only 10 per cent felt that their suppliers addressed their needs.

Therefore, it appears that South African businesses are in a period of transition and that there are many hurdles to achieving customer centricity.

The top four supply chain hurdles that respondents felt needed improved focus to deliver better customer centricity are improved market intelligence, collaborating with supplier and customer, integrating systems and processes, and supply chain visibility and technologies.

Discussing the importance of the fourth hurdle, the report notes that “supply chain visibility increases the agility, flexibility, reliability and responsiveness of a company to operate more effectively in unpredictable and ever-changing environments. Readily available data across the supply chain improves the speed of decision making, assists in foreseeing potential challenges and generally assists with identifying process improvements and leveraging growth opportunities. Ultimately, greater visibility across the supply chain enables customer centricity.”

Respondents’ strategic business objectives

The top ranking strategic business objective for all respondents is growth and expansion into new markets, which has moved up from fifth place last year, said the report. The second top ranking objective is financial returns, which is a new entrant into the top five.

‘Increasing margins and market share’ and ‘enhancing the flexibility, agility and responsiveness in my business’ were ranked third and fourth respectively, and are fundamental benefits of supply chain optimisation, which was the fifth objective of respondents who reported ‘looking to use their supply chain as more of a competitive advantage’.