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Customer-Centricity Takes Top Spot for High-Tech Supply Chain Principles

While it's not surprising that high-tech companies are focused on customer service — especially given today's consumer-driven and highly connected world — what is interesting is the degree of importance now placed on the customer experience in the high-tech supply chain.

This is our second post in a series based on our annual 2013 UPS Change in the (Supply) Chain survey findings. The topic of this post: the shift in high-tech supply chains to prioritize customer service.

It was apparent from both the EBN Live Chat about our survey findings and your comments that providing an excellent customer experience is top-of-mind at many companies. As a refresher, in the last post introducing the survey findings, we ended by asking the following questions: What role does customer service play in your supply chain decisions today? Is it a top priority? Do other factors outweigh it? The verdict: It is a growing priority, but is still being balanced by focusing on cost and product quality, similar to what our survey found this year.

According to the 2013 UPS Change in the (Supply) Chain survey, 39% of those surveyed consider customer service as a top supply chain principle today, which is up from 37% in 2011, and increases to 44% when asked about 2015. Of course, product quality and cost are still important priorities in 2015, at 39% and 17%, respectively, but decision-makers are gradually shifting toward customer-centricity as the number one supply chain principle.

We took a deeper dive to understand this shift better and asked executives what their motivations were for making customer service a top supply chain priority. Of those surveyed, 72% said that more intense global competition and the need to differentiate themselves through customer service was a top driver, while 69% (each) highlighted an increased focus on customers and belief that better service drives improved sales and profits. Finally, 53% cited the growing influence of the end consumer. Based on our own experiences with customers in the industry, we anticipate that these drivers will only continue to increase as more products come to market and demand grows from new, emerging markets.

We also asked about specific changes that high-tech decision makers plan to make to their supply chains. Globally, of those surveyed, 71% said they planned to reduce lead times, a possible indication that these decision-makers are taking advantage of near-shoring opportunities. Another 71% said they plan to improve their planning capabilities. Executives want to improve their fulfillment and post-sales capabilities at 68% and 66%, respectively.

Is your supply chain ready to deliver in a more customer-centric industry landscape? We recommend a supply chain analysis to see where you stand based on your own current and future supply chain principles.

20 comments on “Customer-Centricity Takes Top Spot for High-Tech Supply Chain Principles

  1. Daniel
    March 5, 2014

    “According to the 2013 UPS Change in the (Supply) Chain survey, 39% of those surveyed consider customer service as a top supply chain principle today, which is up from 37% in 2011, and increases to 44% when asked about 2015.”

    Ken, there won't be any doubt that customer support is going to be a key factor. Most of the customers are looking for support as an add on package with components/devices; when and where required.

  2. SP
    March 7, 2014

    If you want to be away from the crowd, you got to be customer centric. Its getting proven day by day that customer experience goes a long way in building trust and spreading word of mouth. In this world when we are talking of connecting everything, it got to be customer centric.

  3. FLYINGSCOT
    March 7, 2014

    Everyone would love to give and be given a wonderful customer experience but the trick will be how to deliver that experience at an exceptionally low cost.  In the consumer market cost still seems to be the overriding factor and to hit low cost it is difficult sometimes to provide the resource for exceptional customer experiences.

  4. Hailey Lynne McKeefry
    March 9, 2014

    @Jacob, you are right…but i'd be interested to talk about what you (and others) think is behind this incrreas? It's pretty substantial and a definite curve. Are end customers feeling more empowered? Is it that there are more choices? What do you think?

  5. Hailey Lynne McKeefry
    March 9, 2014

    @Flyingscott, you are right. I think, in part, organizations are realizing that they need to take a more holistic view of the cost of customer service. It costs money to hire and train customer service reps, and it costs money sometimes to do the right thing (like replace the product in question or whatever to address customer concerns). At the same time, poor customer services is a brand killer. The advent of the Internet has given consumers a way to tell the whole world about a poor customer service experience, in addition to giving them lots more buying options.

    In that vein, dear readers, let us know of wonderful or awful customer service experiences  you've had. What has worked in terms of building a good feeling for you about a brand? What has eroded it for you?

  6. _hm
    March 9, 2014

    Customer centric service is good for all customers. Why give special treatment to hi-tech only? Will this be done at expense of others? If this is true, other should move away from this supply chain.

    I suggest cutomer-centric equal top spot for all types of cutomers.

  7. Daniel
    March 9, 2014

    “but i'd be interested to talk about what you (and others) think is behind this incrreas? It's pretty substantial and a definite curve. Are end customers feeling more empowered? Is it that there are more choices? What do you think?”

    Hailey as a part of business competitions, vendors are offer more services including onsite support as a bundle to attract more customers.  They need the status as a 'preferred vendor' and don't want customers to approach other vendor for support.

  8. Daniel
    March 10, 2014

    “If you want to be away from the crowd, you got to be customer centric. Its getting proven day by day that customer experience goes a long way in building trust and spreading word of mouth. In this world when we are talking of connecting everything, it got to be customer centric.”

    You are right SP. Business are happening at customer side and feel them happy and comfortable is important for a long term relation.

  9. SP
    March 10, 2014

    People would be happy to have a preferred vendor as long as vendors dont misuse it. There must be a clause to get out out of the commitment both for the vendor and the customer.

  10. Daniel
    March 10, 2014

    “People would be happy to have a preferred vendor as long as vendors dont misuse it. There must be a clause to get out out of the commitment both for the vendor and the customer.”

    Sp, misuse means?

  11. t.alex
    March 11, 2014

    I totally agree with this. When selecting certain components via distributors, we really put emphasis on the capability of supporting us  from development process till production.

  12. Hailey Lynne McKeefry
    March 13, 2014

    @_HM, we're talking about high-tech specifically not because it's more imporant than any other, but becuase its' our niche. From what i've seen customer service is becoming more important across the board in all industries.

  13. Hailey Lynne McKeefry
    March 13, 2014

    I just read this post abouit Amazon's Prime service: Amazon plans Prime fee hike by $20, risks consumer wrath. Do you think this price hike is against customer centricity or do you think it will fly with consumers?

     

     

  14. Hailey Lynne McKeefry
    March 13, 2014

    I just read this post abouit Amazon's Prime service: Amazon plans Prime fee hike by $20, risks consumer wrath. Do you think this price hike is against customer centricity or do you think it will fly with consumers?

     

     

  15. _hm
    March 13, 2014

    @Hailey: This model of preferrential treatment to hi-tech, presumed by other as at their expense, may boomrang. Also, in long run, all business ar equally improtant!

  16. Daniel
    March 16, 2014

    “I totally agree with this. When selecting certain components via distributors, we really put emphasis on the capability of supporting us  from development process till production.”

    Alex, support is a critical factor, especially when development team is stuck with certain issues. Only experts can resolve such issues.

  17. t.alex
    March 21, 2014

    Jacob, yes. And I realize nowadays a number of distributors still do not try to build up their technical support base. All they want is just sales. 

  18. Hailey Lynne McKeefry
    March 25, 2014

    @Jacob, I've heard good examples lately of distributors providing design expertise and guidance, especially around energy savings and other environmental design issues. It's a positive trend for sure.

  19. Daniel
    March 25, 2014

    “I realize nowadays a number of distributors still do not try to build up their technical support base. All they want is just sales. “

    Alex, for them it all business. If  customers need support, they may offer at a variable price based on type of support (Email, onsite, over phone, 24*7 etc) requirement.

  20. Daniel
    March 26, 2014

    “I've heard good examples lately of distributors providing design expertise and guidance, especially around energy savings and other environmental design issues. It's a positive trend for sure.”

    Hailey, different form of support starting from design to final marketing.

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