Schneider Electric, which has built a long history in the electronics industry, has, in recent years, put its focus on a customer centric approach—a decision that has forced its supply chain to evolve drastically.
“Our chairman and CEO decided that we needed to be more outwardly focused, listening to the voice of the customer,” Stuart Whiting, senior vice president, logistics and network design, global supply chain, at Schneider Electric told EBN in an interview. “Research and development and product quality were top concerns for almost every vertical and from those standpoints we were considered leaders.”
At the time, it was an audacious goal. “To shift from a supply-driven model to a demand-driven one is no trivial task,” said Roddy Martin, vice president, SCM Product Marketing, at Oracle. “To be successful you need people, process, and technology. It’s a fundamental pivot.”
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In 2011, Annette Clayton took the helm as chief supply chain officer (CSCO) and executive vice president of global supply chain for the company. (Today, she is the company’s CEO and president in addition to her CSCO role.) The company began the task of tailoring its supply chain to consider the customer. “With scale, we forgot who the customer was and what we were doing,” Whiting explained. “We had to ask ourselves how to drive customer centricity through demand.”
During the first stage of the journey, which lasted from 2011 to 2014, Schneider worked to create awareness of customers throughout the supply chain, rationalize its supply base and implement digital technology. “We realized that a one-size-fits all attitude doesn’t work; it covers only a certain percentage of the market,” he said.
The watch words for the new initiative were lean, agile, project, collaborative and fullly flexible. Digital technology was a critical part of the shift to minimize errors and maximize efficiency. The company also began to work differently with its wholesalers and distributors, asking them to collaborate on inventory to extract unnecessary touchpoints and meet customer demands quickly.
“We were moving to a platform of trust and true collaboration,” said Whiting. “Relationships are king and a fully flexible supply chain was necessary.” With collaboration, Schneider is able to work with customers for both planned for shifts, such as holidays, and unforeseen disruptions, such as natural disasters or labor strikes. “Visibility and analytics allow you to predictively and proactively inform what’s in the supply,” Whiting explained. “We can work with anything that is in transit to the plant and even what has been delivered.”
During the second stage, the company built strategies for responding to certain common types of customer demands. “We put personas behind the drivers we wanted to encourage,” Whiting said. “We had to continue to enrich the knowledge around customer behavior and build capabilities to fill in the gaps in the customer experience.”
Finally, the company identified best-of-breed technology tools to manage specific supply chain domains. The company identified a variety of platforms (Kinaxis for planning, Oracle/Manhattan for logistics, and Llamasoft for network design, and Tools Group for multi echelon inventory optimization for optimal supply chain management) with the plan to eventually integrate the various capabilities, Whiting said.
Today, in its latest phase of development the company is exploring a cloud-based approach that will support and drive collaboration across tthe supply chain. “Traditionally, he or she with the most information wins,” said Whiting. Now, we are on the side of the one who shares the most information wins. That couldn’t be further apart from where we started.”
Having a centralized source of truth dramatically shifts the capabilities of the system. “What’s different in the cloud is you pull business data in earlier and make it more meaningful with the system,” Martin said. “You can use data in ways that make sense to the business.
A cloud-based platform offers a variety of other benefits as well. “We chose this approach because of the agility and speed at which we can get up and running, as well as for better cost and mobility in terms of remote access,” Whiting said. “It also is easily updated, and updates don’t cost a fortune.”
The company remains conservative in terms of security. “We look at the cloud as a collaborative platform and we keep more sensitive information like research and development, human resources and pricing on on-premise equipment,” Whiting said.
The biggest change has perhaps been in attitude. The company uses enterprise resource management (ERP) technology to run the business but leverages a variety of information to inform its direction and decision. “We are always asking how we can interpret the available data to do business in a way to differentiate ourselves at point of sale and with customer experience,” Whiting said.
Success has come in small victories, as the company worked to change its corporate DNA. By creating good processes and supporting it with the right technology, the company made doing things in the new optimized way simple to encourage everyone to adopt the new methods, he said.
In the next 18 to 24 months, Schneider plans to continue its quest of creating an end-to-end connected system. In the meantime, customers are reporting that they’ve noticed the change in the company. “We’ve trebled our net satisfaction score with customers,” Whiting said.
— Hailey Lynne McKeefry, Editor in Chief, EBN