Over the next ten years we are going to see incredible changes that will refocus supply chains on a new mission, with new people and technology. The driving force behind these dramatic changes will be the New Customer.
The New Customer doesn’t mean getting a different company or person to buy what you sell. It means that the individuals and companies that you sell to have a new set of demands, expectations and requirements. The New Customer did not exist, in sufficient numbers, five years ago. But the New Customer is dominating markets today and demanding companies rewrite their supply chain strategy to meet their needs.
We have entered the New Customer Decade. A decade where the Digital Supply Chain will be a key instrument companies use to make customers happy and grow revenue. Without a Digital Supply Chain, forget about competing in the demand-side economy. (Demand side economy is defined as an economy driven by end-consumer demand.)
One of the most common and clear examples of this shift to a Digital Supply Chain is ride-hailing services. For example, the taxi industry everywhere from Chile to Hong Kong to Paris has been changed such that customers now expect and require knowledge of where the car inventory is, how long it will take to arrive, how long the trip will last, direct billing and how much the fare will run. They also expect substantially lower costs even though benefits are greater.
What will It take to capture the New Customer? Here are the five essential things for CEOs to consider that cut across industry and geography:
- New Metrics. You get what you measure. CEOs must include a set of revenue and customer happiness metrics. Metrics that measure demand.
- New people, new skills. Supply chain functions will need a major infusion of data scientists and data stewards. That’s because data will be drawn from new parts of your organization, as well as from new equipment like sensors in products. Your people will have to know how to work with the data and make decisions. Indeed, people will make decisions based more on data than intuition.
- New technology. I mentioned that people will work on new data. That means that technology you use must collect, clean and interpret data rapidly. Artificial Intelligence/Machine Learning (AI/ML) will be scaled up, big time. Algorithms will be supported by technology that makes the answers get better every day.
- New approach to risk. Let’s face it. Cyber risks, already at all-time highs, will not decrease this decade. And add in new legislation being passed in the EU (GDPR) and the United States (CA) that protects data privacy. Somehow you have to play defense against all the bad people in the world while at the same time making valuable things happen with customer data. Customers will appreciate a company that keeps their data safe and manages their information well.
- New urgency. Marshall your forces, get the transformation team working and don’t rest until your Digital Supply Chain is making customers happy, driving revenue while keeping costs low.