Building A Customer-Centric S&OP Plan for 2017

From talks of an autonomous supply chain and the era of the robots to the internet of all things revolution, supply chain management in 2016 required businesses to commit to a continuous innovative improvement process with customers at the forefront of all initiatives. To this end, creating a more customer-centric supply chain in 2017 will continue to follow the growing need for a more interactive supply chain that cultivates communication between end users and manufacturers. 

As technology enhances the way consumers interact with businesses, the need for a more customer-centric supply chain is becoming evident. Companies looking to differentiate and gain a competitive advantage, are committed to increased service levels that delight customers and enhance repeat purchases. The consumer today has a heightened expectation of service level quality while technology advancement makes the omnichannel supply chain inevitable. An effective supply chain planning strategy is optimal in building a customer-centric supply chain.

It is important to note that planning, while essential, always comes with uncertainty. This uncertainty means there needs to be room for quick and efficient changes as business and market demands evolve. Manufacturing businesses without effective supply chain planning strategies are often riddled with one or more of the following supply chain challenges:

  • Missed customer deliveries
  • Loss of credibility with customers
  • Customer churn
  • Higher manufacturing costs
  • Excess overtime
  • Reduced flexibility and responsiveness
  • Reduced financial performance

Key Elements of a Customer-Centric S&OP Plan

Image courtesy: Arkieva

Image courtesy: Arkieva

To really add value to the supply chain, sales and operations planning (S&OP) technology must deliver a variety of capabilities. In 2017, the must have list of capabilities includes:

Real-time demand sensing

In 2017, businesses would need to have access to real-time demand data to respond accurately to market changes. A Customer-Centric S&OP plan would have to include access to forecasting data based on real-time demand changes and market signals to meet changing customer needs.

Collaborative planning process

Collaboration in demand planning process in 2017 would have to be both upstream and downstream, and within cross-functional teams; sales and marketing, finance and operations – all fueled with customer feedback across the entire supply chain. To create true collaborative processes businesses would have to integrate front-end and back-office systems to promote bidirectional flow of information.

Multi-echelon inventory optimization

In addition to reducing inventory costs thus freeing up working capital, multi-echelon inventory optimization also improves customer service levels – contributing to a more customer-centric supply chain. Multi-echelon inventory optimization encourages a centralized inventory storage plan of balancing stocks across different echelons (business units) with the goal of improving or keeping a higher customer service level. Companies that implement multi-echelon inventory optimization in addition to reducing costs are also able to create an inventory optimization strategy that is geared towards preventing stock-outs and dissatisfied customers.

Granular data segmentation and analysis

In building a customer-centric S&OP process in 2017, businesses would need to have the tools to quickly and easily segment and analyze their data at a very granular level. Ensuring customer satisfaction and retention would stem from asking and answering very detailed questions about customer interaction, including new digital channels that need to be incorporated into the omnichannel supply chain.

End-to-end linked supply chain

Finally, businesses would have to be more invested in creating visibility across the entire supply chain process all the way to the customer level. Creating the ability to identify changing consumer behaviors quickly, stops in processes, and swiftly implement a continuous process improvement strategy geared towards customer satisfaction. 

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