What the best are doing to achieve Supply Chain excellence
Why is supply chain excellence such a big deal – surely the essence of good business is to get sales? Let’s just focus on building excellent marketing capability and sales teams and worry about delivery later.
Sure, that’s important and you may be successful in getting your customer to trial your product. But that’s all it is – a trial!
Just like any other trial, the intent from customer’s point of view is to decide on whether, firstly, they like the product, whether the price seems reasonable and if the supplier can be trusted. These are all equally important.
A successful trial by a new customer or of a new product will help to get you over the first barrier. The customer will ask: do I like it? Does it align with my needs? Does it do what I want it to do? Will I be better off having it in my home, in my repertoire, in my life?
What the first trial will not do, though, is to answer the question of trust. Will it carry on working effectively? Will it deliver against its promises over time? Will it prove to be as economical as it claims? Is it really environmentally friendly, sustainable? Will further purchases be of the same quality and at the same price? If there is a problem, is there someone to talk to?
This is quite a list and customers or consumers may not consciously and deliberately go through that list of questions, but they will certainly be at the back of their minds. They will weigh up the seeming advantage of the purchase vs the risk of losing the money spent on an unacceptable product. They will want to know if they can really believe the marketing hype and the sales pitch.
Why not check out your mental processes next time you buy in a store or on-line, whether it’s a consumable, a substantial piece of equipment, an item of furniture or a new house! It’s always the same process with only the time spent and level of deliberation varying.
The best companies have the consistency, quality and reliability all sorted before the item leaves the factory. They don’t release it if it doesn’t match up to those questions, knowing that the sooner a defect is spotted and corrected, the lower the cost to the producer. Even better is to ensure that defects don’t arise in the first place!
Only then are they comfortable that their marketing claims and sales pitch are justified.
All this applies only to the product but what about the customer’s other questions? The customer will ask if it will it arrive when they say it will? Will it be damaged? Will it work? If it doesn’t, is there somebody to talk to? Will there be a refund if it doesn’t do what it’s supposed to do?
We’ve all been confronted with being told delivery in 4 – 14 days! But suppose it’s needed as a birthday gift, so 4 days is fine but 14 is not? Or we see that the item costs £4 but delivery is a further £5. Why is delivery so much – that’s unacceptable. Also, it’s essential that it works first time as other work may be held up waiting for it. Even better, is there someone to phone to ask for special delivery, even if it costs a little more?
So, although the customer may be comfortable with the product and the price, can delivery be trusted?
The best companies have all that sorted also. They focus on building trust in all respects. They focus on satisfying and hopefully exceeding expectations concerning product performance, quality, cost and, just as importantly, delivery on time and in good order.
The world leading producers and marketers use a measure of customer delivery effectiveness called OTIF – On Time, In Full – in their drive to ensure customer satisfaction. They focus on driving up their OTIF performance towards 100%, as one of the key and overriding contributors to customer satisfaction.
Suppliers embarking on improving supply chain effectiveness and efficiency start by honestly and transparently measuring their OTIF, the percentage of deliveries that arrive both when promised and in perfect condition. Then they work to improve it!
We’ll talk more about the issue of customer and consumer trust in future articles. We’ll also discuss how this drive to improve customer on-time, in-full, delivery leads to huge benefits to you as the supplier through improved quality, flexibility, reliability and efficiency. These benefits arise throughout the end to end supply chain of procurement, planning, manufacturing, delivery and customer service.
On top of all this, we’ll show how this OTIF focus leads to reducing cost and working capital, enabling a lower selling price. This is surely a win-win-win for you as the supplier, for your customers and for the end consumer.
I’d love to hear your views.
Sure, that’s important and you may be successful in getting your customer to trial your product. But that’s all it is – a trial!
Just like any other trial, the intent from customer’s point of view is to decide on whether, firstly, they like the product, whether the price seems reasonable and if the supplier can be trusted. These are all equally important.
A successful trial by a new customer or of a new product will help to get you over the first barrier. The customer will ask: do I like it? Does it align with my needs? Does it do what I want it to do? Will I be better off having it in my home, in my repertoire, in my life?
What the first trial will not do, though, is to answer the question of trust. Will it carry on working effectively? Will it deliver against its promises over time? Will it prove to be as economical as it claims? Is it really environmentally friendly, sustainable? Will further purchases be of the same quality and at the same price? If there is a problem, is there someone to talk to?
This is quite a list and customers or consumers may not consciously and deliberately go through that list of questions, but they will certainly be at the back of their minds. They will weigh up the seeming advantage of the purchase vs the risk of losing the money spent on an unacceptable product. They will want to know if they can really believe the marketing hype and the sales pitch.
Why not check out your mental processes next time you buy in a store or on-line, whether it’s a consumable, a substantial piece of equipment, an item of furniture or a new house! It’s always the same process with only the time spent and level of deliberation varying.
The best companies have the consistency, quality and reliability all sorted before the item leaves the factory. They don’t release it if it doesn’t match up to those questions, knowing that the sooner a defect is spotted and corrected, the lower the cost to the producer. Even better is to ensure that defects don’t arise in the first place!
Only then are they comfortable that their marketing claims and sales pitch are justified.
All this applies only to the product but what about the customer’s other questions? The customer will ask if it will it arrive when they say it will? Will it be damaged? Will it work? If it doesn’t, is there somebody to talk to? Will there be a refund if it doesn’t do what it’s supposed to do?
We’ve all been confronted with being told delivery in 4 – 14 days! But suppose it’s needed as a birthday gift, so 4 days is fine but 14 is not? Or we see that the item costs £4 but delivery is a further £5. Why is delivery so much – that’s unacceptable. Also, it’s essential that it works first time as other work may be held up waiting for it. Even better, is there someone to phone to ask for special delivery, even if it costs a little more?
So, although the customer may be comfortable with the product and the price, can delivery be trusted?
The best companies have all that sorted also. They focus on building trust in all respects. They focus on satisfying and hopefully exceeding expectations concerning product performance, quality, cost and, just as importantly, delivery on time and in good order.
The world leading producers and marketers use a measure of customer delivery effectiveness called OTIF – On Time, In Full – in their drive to ensure customer satisfaction. They focus on driving up their OTIF performance towards 100%, as one of the key and overriding contributors to customer satisfaction.
Suppliers embarking on improving supply chain effectiveness and efficiency start by honestly and transparently measuring their OTIF, the percentage of deliveries that arrive both when promised and in perfect condition. Then they work to improve it!
We’ll talk more about the issue of customer and consumer trust in future articles. We’ll also discuss how this drive to improve customer on-time, in-full, delivery leads to huge benefits to you as the supplier through improved quality, flexibility, reliability and efficiency. These benefits arise throughout the end to end supply chain of procurement, planning, manufacturing, delivery and customer service.
On top of all this, we’ll show how this OTIF focus leads to reducing cost and working capital, enabling a lower selling price. This is surely a win-win-win for you as the supplier, for your customers and for the end consumer.
I’d love to hear your views.
