Supply Chain Leaders Can Bring Value to Customer Experience Strategies

Editor’s Note: Thomas O’Connor, is Senior Director, Analyst, Gartner Supply Chain

For far too long, many supply chain leaders have deferred the strategy and operations of customer experience (CX) to commercial and marketing teams. A meaningful opportunity exists though for supply chain leaders to work more closely with these teams and have a voice in the planning and execution of CX-related business strategies.

This can include active engagement on CX design and operations, from aligning on strategic product and service options that address customer needs and preferences, to weighing in on how to reliably and seamlessly deliver products, services and experiences that meet customer expectations.

CX Strategies Impact Business Outcomes

Increasingly, leading supply chains from the Gartner Supply Chain Top 25 and beyond recognize that CX investments aren’t just altruistic — they can drive measurable business outcomes. According to a Gartner survey of 400 supply chain participants, the most common outcome expected from CX investments are: Optimized costs (57%), improved service metrics (55%) and revenue growth (46%).

However, many supply chain leaders grapple with proving that supply-chain-driven CX investments impact business outcomes. It can be accomplished though by taking a data-driven approach. For example, materials science giant Dow was able to showcase results by identifying a mathematical correlation between its supply chain performance, the CX, and financial performance. By turning an on-time, in-full (OTIF) percentage into CX impact, and CX impact back into margin and growth, they were able to demonstrate the power of CX for the supply chain.

Establishing a Voice for Supply Chain on CX

It is often unclear within organizations who owns CX, especially when there is no formal CX executive leader or group. Without some type of central coordination, leaders of functions and business units are often unaware of completed CX projects, and the value that they create for the business more broadly and their function more specifically.

To make the shift towards customer centricity, organizations should start by creating cross-functional leadership councils or steering teams focused on the CX. Supply chain is not typically the lead — more often it is marketing, sales or a designated CX leader for the enterprise. But the supply chain needs to be a core member of the CX steering team. In lower maturity organizations, where this leadership may not be easily identified, this may mean that the supply chain must work to convene a cross-functional group focused, initially, on driving the CX for top accounts.

Success Lies in Consistent Adoption of CX Principles

While the framework for governance varies across companies, effectiveness comes from having consistent and efficient CX principles in place that business partners adopt into their decision making. Without consistent execution and operational standards, end-to-end management of CX across the enterprise is almost impossible. At minimum, a supply chain should have its own working group focused on the CX, if one does not exist at the enterprise level.

This top-level leadership and alignment must be reinforced by bottom-up initiatives that clearly connect what people do in their jobs to how it impacts the customer. Employees must see a direct connection to their “role in the goal” while being provided with sufficient information and insight that will enable them to execute.

For example, Lenovo is “democratizing” their customer insights by giving broad access to employees across an extensive set of data points. This includes individual customer, consumer and channel partner insight communities, customer surveys and analysis of indirect and inferred customer sentiment from social media. The objective of these sensing activities is to identify an opportunity or root cause of a problem, then enable employees to take action.

For the supply chain, this more empowering, collaborative approach to delivering the CX has led to material improvements in service levels such as a 6% year-over-year improvement in products delivered on, or before, the delivery promise date. Lenovo even recognizes the importance of incentives and ensures that employees have skin in the game when it comes to CX performance. Between 10% and 20% of employee bonuses are explicitly tied to CX metrics.

The time has come to make the case for supply chains to have a voice at the CX leadership table. The first step is recognizing and building awareness that supply chain is more than a cost center. By connecting supply-chain-driven CX enhancements to business outcomes and leveraging data to more deeply listen to, understand and deliver on customers’ wants, needs and preferences, supply chains can demonstrate how they drive value to customers and organizational growth.

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