The global pandemic created many business strategy shifts. Some may endure and others, well, the jury is still out. One of the enduring shifts is the need for a strong customer service and support (CSS) capability — whether you’re in the B2B or B2C category.?
According to PwC’s 2022 Customer Loyalty Survey, a bad CSS experience (at 32%) was next only to a bad product experience (at 37%) for why customers left a brand. What was super interesting to me, an avowed techie, is that for the tech industry, it was flipped — 47% (CSS) to 34% (products).
An often overlooked component of CSS strategy is the humble service supply chain (SSC). My team and I have been helping a number of clients address that oversight, and we are seeing the benefits: improved customer, partner and employee satisfaction; increased agility; better ROI; and higher sustainability. In this series of blogs, we’ll discuss our approach to a digital, connected service supply chain — Service@Core — and hope you benefit from our insights.?
Let’s kick off this series by talking about the five follies of service supply chain strategy:
- Ignoring the SSC: Companies pay a lot of attention to aligning product, support centers and field strategies to their overall revenue and CX strategy. Yet they continue to commit the folly of treating supply chain (SC) and especially service supply chain as a back-office rather than a customer-facing or revenue generating function. Differentiated SCs can bump revenue up to 40% over the long term*. With pandemic-era supply chain challenges still continuing, resilience and digitization are a key C-suite priority. About time! We’re still not seeing a strong CX component to those SC and SSC operational strategies though, as we believe it should be.
- Over rotating on cost: What matters most to your customers: Service speed? Delivery predictability? Commitment fidelity, i.e., stuff happens when they were told it would? Price? Ease of returns? Sustainable packaging? Yet companies continue to commit the folly of designing and measuring SSCs primarily on cost. This creates a critical disconnect reflected in one or more of underwhelming Customer Satisfaction (CSAT), subpar operational performance and demoralizing employee experience.?
- Underestimating the complexity: Per our analysis*, SSCs deal with as many as 3x Stock Keeping Units (SKUs), 2-3x the time horizon, 4-7x the distribution nodes and up to 50% more demand variability vis-a-vis forward supply chains. Net result: an exponentially higher level of complexity versus forward supply chain. Folly that we see: to gain perceived leverage, companies try to force-fit the processes, objectives and key results, key performance indicators and skill requirements between SCs and SSCs without adequate customization. There are commonalities for sure, but SSC excellence comes from identifying, measuring and improving the nuances.
- Underinvesting in technology: The good news: Many of our clients are investing in tech upgrades. The not so good news: not urgently enough and/or not effectively. Areas to consider: real-time or near-real-time visibility (performance and cost), multi-echelon inventory planning, network and master data governance. An important callout: Please, please, please lead with the end state in mind, i.e., the business, CX and EX requirements and the associated processes upgrades. We cannot emphasize this enough: Technology is a means to an end. It is critical. It is essential. But you need to look Beyond Digital. As Aristotle would say: Tech and tools alone do not a great business make!
- Underinvesting in the ecosystem: If you want a class leading service supply chain, you have to work with a network of partners. Your suppliers need to prioritize your tasks. Your chatbots should be able to tell your customers when your logistics partner intends to deliver their replacement products. Your agents need to be able to give the updated status to your irate customers. Your field agents need to have the right part available at the right time. All this takes building strong relationships (57% of COOs* agree), thoughtful investment and diligent execution, beyond your company borders. And yet more than 60% of companies* are still focusing only on internal process improvements, technology and skills upgrades.?
Service@Core addresses these elements by elevating SSC strategy to be a critical core of the CSS strategy. This then links the desired Customer Experience (CX) and Employee Experience (EX) to the appropriate cost to deliver those experiences. Service@Core covers people, process, tech and tools, and the operating model, thoughtfully creates linkages across your ecosystem and finally, measures success / progress / ROI by using the right objectives and key Results (OKRs) / key performance indicators (KPIs). We can’t wait to tell you more about our approach, philosophy and outcomes in the next blog.
In the meantime, if you or your organization has veered into committing one or more of the five follies, we would love to hear about your experience and your solution(s). Let’s connect, and stay tuned!?
Nisha Bhatia
, Connected Supply Chain |
Tiago Leal
, Internet of Things Platform |
Vinay Kumar
, Supply Chain Operations also contributed to this perspective
*Source: Unless otherwise referenced, all data is from PwC / Strategy& research and experience
