Five tips for a competitive service supply chain
For many organisations the perception of the reverse service supply chains primary role has shifted fr...
For many organisations the perception of the reverse service supply chain’s primary role has shifted from a functional necessity to one which is increasingly being recognised as an essential tool for competitive differentiation and a key part of customer satisfaction. One place this is particularly relevant is in the electronics sector, where products often have long working lives and uptime is critical to end-customer happiness and retention.
But just how do businesses ensure that their service supply chains are hitting tight turnaround times and maintaining product reliability to really maximize on the opportunities available? At Teleplan we believe there are five key things which help organizations achieve a competitive service supply chain.
Keeping devices out of the supply chain
When considering customer satisfaction, often the best kind of service is one that doesn’t need to take place to begin with. Consumers, particularly millennials, increasingly expect to be able to resolve technical issues with their electronic devices themselves.
Here, businesses need to ensure that they have best practice guidelines, or live technical support services available. The convenience of these self-help portals mean individuals can try to find a fault and find early resolution in many cases. Our own experience shows us that over 30% of smartphone related queries can be resolved within minutes through live technical support, preventing unnecessary returns and reducing no fault found (NFF) rates by a factor of four. In fact, this service can help increase customer satisfaction rates to more than 85%. So in short, everyone is happy!
Convenient, simple and transparent process
Where physical returns are deemed necessary, the simplicity and convenience of the process is crucial. Consumers are demanding a process that fits to their lifestyle and schedule. No longer can we rely on a one-size fits all approach to returns. Gone are the days when it was enough to ask consumers to drop off and pick up items at a central depot. Nor will consumers expect to stand in line and wait. Manufacturers must have access to strong logistics partner networks to service consumers in a place, and at a time that suits them.
Moreover, when dealing with electronic goods that users rely on so heavily, such as smartphones and connected devices, enabling visibility of the device’s progress through the repair cycle is an essential supply chain consideration. Providing updates on the estimated time of return is critical in order to give users the reassurance that they are being properly looked after.
Fast screening and diagnostics
A quick and accurate diagnostic process not only improves the overall efficiency of the service supply chain, it also reduces the likelihood of your customers getting back a misdiagnosed faulty product. This is particularly important when sales of smartphones to end users totaled 1.2 billion units in 2014, from our own experience we estimate 150 million smartphones are now being returned for service and repair every year across the globe. Fully automated testing capability can reduce the testing and diagnosis time by up to five minutes per device, a significant saving to be able to pass on to customers.
Once a fault has been identified, an efficient, high quality repair is essential. From software related issues to highly technical board and “cleanroom” repairs, manufacturers need to be sure that their devices are being restored to a usable state by subject matter experts.
Not only do repairs require specialists, but they should be carried out in accordance with the defined functional repair standards of manufacturers, in order to ensure brand reputation is maintained. It is imperative to deliver them back a device that is up to brand standard.
Return to sender
The final stage of the supply chain process is often the least considered. It mustn’t be forgotten that it matters how a customer receives their product once it has been repaired. For example, does one return the product packaged as new, or return it in the packaging it arrived in to demonstrate environmental responsibility? By focusing on returns as an important part of the service supply chain solution, manufacturers can really benefit from a simple, but important differentiator.
The service supply chain is increasingly dealing with products that consumers rely on for their daily lives and as a result, having a process that works quickly, efficiently and with visibility can make the crucial differentiator between you and your competitors. It’s time businesses embraced the opportunities at hand, to streamline logistics, save time to meet tight turnaround times and deliver ultimate customer satisfaction. All of this can be achieved by working with a partner who can deliver and control all aspects of the service supply chain enabling you to unlock more value.
By Sven Boddington Vice President Global Marketing & Client Solutions at Teleplan International.
NTT DATA Services, Remodelling Supply Chains for Resilience
Joey Dean, the man with the coolest name ever and Managing Director in the healthcare consulting practice for NTT DATA and is focused on delivering workplace transformation and enabling the future workforce for healthcare providers. Dean also leads client innovation programs to enhance service delivery and business outcomes for clients.
The pandemic has shifted priorities and created opportunities to do things differently, and companies are now looking to build more resilient supply chains, none needed more urgently than those within the healthcare system. Dean shares with us how he feels they can get there.
A Multi-Vendor Sourcing Approach
“Healthcare systems cannot afford delays in the supply chain when there are lives at stake. Healthcare procurement teams are looking at multi-vendor sourcing strategies, stockpiling more inventory, and ways to use data and AI to have a predictive view into the future and drive greater efficiency.
“The priority should be to shore up procurement channels and re-evaluate inventory management norms, i.e. stockpiling for assurance. Health systems should take the opportunity to renegotiate with their current vendors and broaden the supplier channel. Through those efforts, work with suppliers that have greater geographic diversity and transparency around manufacturing data, process, and continuity plans,” says Dean.
But here ensues the never-ending battle of domestic vs global supply chains. As I see it, domestic sourcing limits the high-risk exposure related to offshore sourcing— Canada’s issue with importing the vaccine is a good example of that. So, of course, I had to ask, for lifesaving products, is building domestic capabilities an option that is being considered?
“Domestic supply chains are sparse or have a high dependence on overseas centres for parts and raw materials. There are measures being discussed from a legislative perspective to drive more domestic sourcing, and there will need to be a concerted effort by Western countries through a mix of investments and financial incentives,” Dean explains.
Wielding Big Tech for Better Outcomes
So, that’s a long way off. In the meantime, leveraging technology is another way to mitigate the risks that lie within global supply chains while decreasing costs and improving quality. Dean expands on the potential of blockchain and AI in the industry.
“Blockchain is particularly interesting in creating more transparency and visibility across all supply chain activities. Organisations can create a decentralised record of all transactions to track assets from production to delivery or use by end-user. This increased supply chain transparency provides more visibility to both buyers and suppliers to resolve disputes and build more trusting relationships. Another benefit is that the validation of data is more efficient to prioritise time on the delivery of goods and services to reduce cost and improve quality.
“Artificial Intelligence and Machine Learning (AI/ML) is another area where there’s incredible value in processing massive amounts of data to aggregate and normalise the data to produce proactive recommendations on actions to improve the speed and cost-efficiency of the supply chain.”
Evolving Procurement Models
From asking more of suppliers to beefing up stocks, Dean believes procurement models should be remodelled to favour resilience, mitigate risk and ensure the needs of the customer are kept in view.
“The bottom line is that healthcare systems are expecting more from their suppliers. While transactional approaches focused solely on price and transactions have been the norm, collaborative relationships, where the buyer and supplier establish mutual objectives and outcomes, drives a trusting and transparent relationship. Healthcare systems are also looking to multi-vendor strategies to mitigate risk, so it is imperative for suppliers to stand out and embrace evolving procurement models.
“Healthcare systems are looking at partners that can establish domestic centres for supplies to mitigate the risks of having ‘all of their eggs’ in overseas locations. Suppliers should look to perform a strategic evaluation review that includes a distribution network analysis and distribution footprint review to understand cost, service, flexibility, and risks. Included in that strategy should be a “voice of the customer” assessment to understand current pain points and needs of customers.”
“Healthcare supply chain leaders are re-evaluating the Just In Time (JIT) model with supplies delivered on a regular basis. The approach does not require an investment in infrastructure but leaves organisations open to risk of disruption. Having domestic centres and warehousing from suppliers gives healthcare systems the ability to have inventory on hand without having to invest in their own infrastructure. Also, in the spirit of transparency, having predictive views into inventory levels can help enable better decision making from both sides.”
But, again, I had to ask, what about the risks and associated costs that come with higher inventory levels, such as expired product if there isn’t fast enough turnover, tying up cash flow, warehousing and inventory management costs?
“In the current supply chain environment, it is advisable for buyers to carry an in-house inventory on a just-in-time basis, while suppliers take a just-in-case approach, preserving capacity for surges, retaining safety stock, and building rapid replenishment channels for restock. But the risk of expired product is very real. This could be curbed with better data intelligence and improved technology that could forecast surges and predictively automate future supply needs. In this way, ordering would be more data-driven and rationalised to align with anticipated surges. Further adoption of data and intelligence and will be crucial for modernised buying in the new normal.
These are tough tasks, so I asked Dean to speak to some of the challenges. Luckily, he’s a patient guy with a lot to say.
On managing stakeholders and ensuring alignment on priorities and objectives, Dean says, “In order for managing stakeholders to stay aligned on priorities, they’ll need more transparency and collaborative win-win business relationships in which both healthcare systems and medical device manufacturers are equally committed to each other’s success. On the healthcare side, they need to understand where parts and products are manufactured to perform more predictive data and analytics for forecasting and planning efforts. And the manufacturers should offer more data transparency which will result in better planning and forecasting to navigate the ebbs and flows and enable better decision-making by healthcare systems.
Due to the sensitive nature of the information being requested, the effort to increase visibility is typically met with a lot of reluctance and push back. Dean essentially puts the onus back on suppliers to get with the times. “Traditionally, the relationships between buyers and suppliers are transactional, based only on the transaction between the two parties: what is the supplier providing, at what cost, and for what length of time. The relationship begins and ends there. The tide is shifting, and buyers expect more from their suppliers, especially given what the pandemic exposed around the fragility of the supply chain. The suppliers that get ahead of this will not only reap the benefits of improved relationships, but they will be able to take action on insights derived from greater visibility to manage risks more effectively.”
He offers a final tip. “A first step in enabling a supply chain data exchange is to make sure partners and buyers are aware of the conditions throughout the supply chain based on real-time data to enable predictive views into delays and disruptions. With well understand data sets, both parties can respond more effectively and work together when disruptions occur.”
As for where supply chain is heading, Dean says, “Moving forward, we’ll continue to see a shift toward Robotic Process Automation (RPA), Artificial Intelligence (AI), and advanced analytics to optimise the supply chain. The pandemic, as it has done in many other industries, will accelerate the move to digital, with the benefits of improving efficiency, visibility, and error rate. AI can consume enormous amounts of data to drive real-time pattern detection and mitigate risk from global disruptive events.”