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The Importance of Customer Service in Supply Chain Management

Supply chain management (SCM) is about more than just making sure there’s a regular flow of materials and product availability. Without a strong focus on customer service in supply chain management, you can hurt your reputation, customer satisfaction, and loyalty. Meeting customers’ expectations and consistently providing a positive experience must be crucial parts of your supply chain strategy.

Key Components of Customer Service in Supply Chain Management

Here’s an example of the disconnect customers often feel with supply chains: 76% of customers expect consistent interactions across sales, service, and marketing, yet more than half say this just doesn’t happen.

Developing a customer-centric mindset across your entire supply chain entails:

  • Effective communication to keep customers informed about supply chain operations, order and delivery statuses, and delays
  • Responsive problem-solving to promptly and effectively resolve customers’ inquiries and concerns
  • Agility to adapt to changing circumstances or supply chain disruptions and find alternative solutions
  • Building trust and confidence with customers to alleviate their concerns and foster loyalty
  • Collaborating with your supply chain partners to strengthen your relationships

To live up to these goals, you need a centralized database with real-time data on your operations and supply chain management process.

Connected SCM systems that are accessible to everyone throughout the supply chain are the only way to provide the consistent and accurate information that customers demand. This requires detailed information about supply chain production, accurate inventory counts, up-to-the-minute information on supply chain management and logistics, and realistic delivery dates. In other words, you need an end-to-end solution that ties together information from your suppliers, manufacturers, warehouses, and logistics partners.

The Impact of Customer Service on Supply Chain Efficiency

Customers expect personalized, connected, and timely communication. They demand transparent supply chain processes with visibility into fulfillment and delivery times. They expect to be notified immediately of any potential delays, and they want knowledgeable customer service representatives to handle their concerns.

It’s a lot. 

But it’s essential. 

According to PwC, three out of four customers say the experience they have with a brand is a “deciding factor” when choosing among competing brands.

McKinsey puts it this way: “Customer care leaders are facing their greatest challenge in decades.” Amid rising call volumes, high levels of employee turnover, and persistent talent shortages, customers’ demands are going unmet — despite significant efforts to cultivate happy customers.

When you get it right, though, it provides significant benefits.

Enhances Brand Reputation and Trust

When you can meet — or exceed — customers’ expectations, you build trust. Accurate, consistent, and reliable customer service has always been a hallmark of top-performing companies. Providing this level of care across all touchpoints in the supply chain demonstrates that you truly value your customers.

Trust may be your single biggest asset or weakness: 81% of customers say they need to trust the brand they buy from. A single poor customer service experience can undermine even the top brands.

Contributes to Customer Loyalty and Retention

Inmar Intelligence’s survey data revealed that 89% of customers have purchased from alternative brands in the last year. Whether they were looking for lower prices or better customer service, that’s a lot of churn. Since it’s always less expensive to retain customers than to acquire new ones, your supply chain strategy must foster loyalty and retention.

Driving loyalty goes beyond just satisfying customers. A Gartner study found that one in five customers who said they were satisfied with their provider still planned to shift their business elsewhere. You’ve got to deliver an exceptional experience to drive repeat business and mitigate attrition.

For companies that are willing to invest in SCM systems and build a customer-centric culture, there’s a significant upside. For example, accurate inventory counts and demand forecasting can help avoid stockouts. Stockouts are more than just speed bumps for companies; they often drive customers directly to your competitors, and those customers may never return.

Improves Operational Efficiency and Reduces Costs

By proactively addressing customers’ concerns and quickly resolving their issues, organizations can streamline their supply chain operations — minimizing the need for costly rework or expensive reverse logistics. Efficient communication and proactive problem-solving can reduce the burden on your customer service team, empowering it to spend more time enhancing the customer experience and participating in revenue-generating activities like upselling and cross-selling.

This has become increasingly important with today’s omnichannel supply chains. Disjointed systems, fragmented data, and — worse — inaccurate inventory counts can hinder your operational efficiency and drive up your fulfillment costs.

How to Enhance Customer Service in Supply Chain Management

Here are three keys to enhancing customer service in supply chain management.

Improve Supply Chain Visibility

Without accurate, real-time data, you simply can’t provide the level of customer service that today’s customers demand. From suppliers to warehouses, localization and lane assignments, yard management, supply chain logistics, and last-mile deliveries, you must have complete visibility into your inventory, asset management, and overall supply chain. IoT sensors, scanners, and other types of hardware — coupled with the right SCM platform — can facilitate the real-time visibility you need.

Develop KPIs

You can’t manage what you can’t measure. Establishing key performance indicators (KPIs) across your supply chain can help you:

  • Analyze patterns over time to identify trends, bottlenecks, and areas that need improvement
  • Measure your progress on initiatives to improve your customer service
  • Track your supply chain health and resiliency to mitigate risk
  • Make adjustments to your supply chain strategy based on leading indicators

These KPIs can help your operations and customer service teams make more informed, data-driven decisions about your supply chain and customer experience.

Solicit Customer Feedback

Don’t wait for customers to tell you there’s a problem. By the time that happens, you’re already losing sales. Proactively soliciting customer feedback at each stage of the supply chain and fulfillment process can yield insights into areas where you need to make improvements.

Get Real-Time Visibility Into Your Supply Chain Operations and Assets

Supply chain disruptions happen, but knowing about them in a timely manner can help you offer better customer service. Keeping your customers informed at every step, with up-to-date information, is critical to delivering on your customer service goals.

Surgere’s IoT supply chain solutions provide real-time intelligence, 99.9% data accuracy, and actionable insights to power leading businesses. Contact Surgere today to see how we can help your business solve its supply chain challenges and grow. 

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