Customer Fulfillment Leaders: Be Ready for Disruption

Editor’s Note: Beth Coppinger, is Senior Director Analyst, Gartner

Incomplete information is a common part of running a business. CEOs make decisions with the information available. Planners work with data they receive from their forecast. Customer fulfillment leaders must evaluate how to deliver consistent service excellence as they adapt to changes in customer expectations.

This is a challenge for customer fulfillment leaders at any time. But these decisions become increasingly challenging during times of disruption or in a “turn” – think of recessions, uncertainty, trade disputes, new regulations, and most recently pandemics.
Those turns happen — there's nothing you can do about it. What you can do is foresee the turn and prepare to exit it with maximum speed before your competitors do.

The goal can't be to just survive the turn. Instead, organizations should, like a speed skater going into a sharp turn, use the turn to gain momentum and stability. Customer fulfillment leaders must push their teams now to ensure they are prepared later.

Strategy

To identify turns, leaders must have a deep understanding of customer behaviors, wants and needs. They must define strategies for how to listen and respond to varying customer needs. At a tactical level, cash flow issues and changes in order patterns are good indicators that a turn might be on the horizon. The order-to-cash team is often the first to notice those kinds of changes and can act as the canary in the coal mine — provided they have the necessary analytics and reporting tools.

More advanced companies expand the scope of customer fulfillment beyond transactions and partner with customers to deliver joint value creation. Examples include the alignment of base transactional data, establishing joint forecasting processes, optimizing ‘route to market', and designing products that are ‘fit for use' in your customer's supply chain. Knowledge is critical during turns when companies face pressure to reduce costs. Those top customer partnerships are a source of value creation and innovation worth protecting. Well-developed partnerships come with improvements in service, costs, cash and sustainability.

During any disruption, it's also important to have a clear communication strategy. Keep communication lines open with regular updates on impacts to both your supply chain and your customer's. For top customers, discuss ways to partner that will help mitigate the impact of the disruption. For example, can you extend payment terms, or possibly share resources in a constrained environment. Your customers depend on you to keep them informed and be responsive to changing needs.

Cost

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.

Reliable master data management is crucial to effectively reduce manual intervention. Otherwise, false or insufficient data will always require manual adjustments. In today's data driven world, data accuracy has to be paramount.

Talent

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.

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.

Disruptions will come and go. Leaders not only adapt to the disruption in real time, they are continuously revising their strategy, optimizing costs, and refreshing talent to also meet the needs of tomorrow.

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