Verizon Connect: Delivering unmatched ecommerce customer experience through supply chain innovation
Derek Bryan, VP EMEA at Verizon Connect discusses the ways in which the supply chain can be harnessed to create value through customer experience enhancement.
The ecommerce industry continues to grow at a rapid rate, with the latest figures from the ONS showing that more than 18 percent of overall retail spending in Q1 2019 took place online, representing a 70 percent increase over the past five years. This revolution in purchasing habits has not only transformed the retail landscape, but also had an equally transformative impact on supply chains.
Not only are more deliveries required to unite consumers with their latest purchases, but business’ growing appreciation of customer experience as a potential competitive edge has led certain companies to consider new and innovative ways to create value-added services to complement existing delivery experiences.
These innovations have largely focused on empowering customers to take control of their own delivery experience. For example, in some areas, a customer making an order in the morning can now receive the product in a matter of hours through same-day delivery services offered by certain retailers. Likewise, missed deliveries were previously a bugbear for consumers when shopping online, subsequently driving demand for elected delivery slots and more sophisticated order tracking systems. In a climate characterised by rising expectations of customer service, lower tolerance of the failure to meet these expectations and the use of social media as a platform to voice customer complaints in the public forum, it’s more important now than ever for businesses to deliver upon their promises.
Demystifying digital supply chains
While new service offerings have greatly empowered the end-user, the supply chains they rely on have become increasingly intricate. Drivers are now taking more complex routes while operating within narrower time frames, and this has driven demand for intelligent fleet management tools that help retailers meet growing customer expectations around delivery. Using these tools, the fleets of delivery vehicles can similarly be empowered to deliver competitive services in a sustainable way.
Most fleets already have the tools required to ensure deliveries are completed on time (or at least, to inform customers of any delays in good time), such as route-planning, GPS tracking and live traffic updates. However, a single platform to join-up all these individual tools is required to bring them all together and channel their value back to the end-user. With an integrated software platform at the heart of fleet operations, organisations can enhance both the quantity and quality of customer touchpoints either online or via mobile applications – literally putting delivery information in the palm of the customer’s hand.
A platform for accelerating workflows
Certain online retailers have long maintained a competitive edge by reducing the time elapsed between order and delivery. As in any industry, processing speed relies on the overall efficiency of operations, keeping workflows constant even in the face of unexpected spikes in volume.
A single integrated platform can notify managers when mobile workers have completed a job, validate the condition of their cargo, and create/re-assign jobs in near real-time, based on which worker is most suitable for each delivery. As this software runs through a smart device, rather than in-built hardware fitted to their vehicles, workers are able to complete every aspect of their job without disruption, and operations managers are given a clear view of whether their mobile workforce is delivering effectively, and on time.
Using flexible workforces to consistently meet demand
In order to meet the demand for rapid delivery services, organisations must ensure drivers are consistently available to get products out on the road in good time, regardless of fluctuation in delivery volumes. As a result, organisations can rely on flexible workforces to adapt to changes in demand. However, when it comes to owned vehicles being used for commercial purposes, drivers and businesses can find valuable hours are being lost going through trip logbooks every month to check which trips were private and which were for business.
Again, the antidote lies in software, and specifically an accompanying smartphone app, the principal channel of work for gig economy workers. Most modern platform-based fleet management systems come with intuitive and user-friendly mobile applications that can automate the process of recording mileage and fuel expenses in an HMRC-compliant format, and make switching between business and private use as easy as swiping either left or right. As a result, reaping the benefits of flexible workers becomes as easy as pushing a button.
The soft touch
In the current climate, customers demand instant gratification as soon as they make a purchase – they want to get their hands on their product as soon as possible. Delivery is the first and most integral step in their customer experience, and organisations which don’t take the requisite steps to ensure they can enable an effective and reliable same day delivery service will get left behind.
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.”