CUSTOMER CENTRIC SUPPLY CHAINS

Building the casefor change

Customer Centric Supply Chains • Building the case for changeOLIVER WIGHT • ORACLE

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Summary

This document summarises the findings of an event that drew together a number of

Supply Chain Practitioners and experts from Oliver Wight and Oracle, to brainstorm what

is needed to help build the case for change within the Supply Chain.

It aims to help Supply Chain Practitioners

build the case for Customer Centric

Supply Chains at all levels. It is important

these Customer Centric Supply Chains

are viewed from the outside-in; examining

the supply chain from the customer’s

perspective means outcomes that matter

most to customers are delivered. Focusing

on these initiatives allows for maximum

business impact, including dramatic

improvements in revenue and overall

profi t, in the shortest time possible.

The following information outlines the

discussions and key points at the

recent Supply Chain Inspiration Day,

held jointly by Oracle and Oliver Wight

in London on 2nd December 2014.

BUILDING THE CASE

Customer Centric Supply Chains • Building the case for changeOLIVER WIGHT • ORACLE

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KPIs (Key Performance Indicators)

It was recognised that KPIs need to be defi ned in

terms that relate to the customer and parameters that

matter to the board, rather than in classical supply

chain language, such as OTIF. The following points

were identifi ed as the top three KPIs:

• Customer retention

• Customer margin

• Customer service/satisfaction

Customer Centric Supply Chains • Building the case for changeOLIVER WIGHT • ORACLE

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Board level (Making the Case)

More communication is required between the supply

chain and team of senior executives in order to

highlight the value supply chain transformation brings

to the business as a whole. The following three were

identifi ed as the best ways of articulating this:

• Costs tied into the supply chain

o Illustrate the cost, both fi xed and

variable, as a percentage of overall

revenue, and how changes impact the

bottom-line.

• Benefi ts from transformation - growth, cash

fl ow, cost control, customer retention

o Illustrate the revenue growth potential

and customer retention along with

working capital reduction.

• Roadmap – create a prioritised roadmap with

clear timelines and milestones

o Paint a clear picture of the roadmap,

delivering benefi ts at regular intervals

whilst remaining focused on future

targets and plans.

Customer Centric Supply Chains • Building the case for changeOLIVER WIGHT • ORACLE

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Making the case through the organisation

The value of the supply chain can be felt within the wider organisation. Along with

senior executives, the rest of the business needs to understand and support any supply

chain initiatives for the overall good of the organisation, and to ensure the survival and

growth of each entity. The following three key points were identifi ed as key ways to

make this happen:

• Identify real and future customer needs

o Move the focus from real needs to pro-actively identifying future

needs. Having a pretty product front at the retail end is not enough. The

real need of the customer is timely delivery of a quality product as specifi ed

during the purchasing cycle.

• Cost-to-Serve

o Identifying true cost-to-serve for different customer and product segments

will focus the organisation on those segments that are most strategic and

profi table. If cost-to-serve is not identifi ed, then any ‘chinks’ in the business

will end up as costs within the supply chain.

• Benchmark against other companies

o Benchmarking against direct competitors and world-class companies

focuses actions on ‘the size of the prize’ in terms of improving top and

bottom-lines.

Customer Centric Supply Chains • Building the case for changeOLIVER WIGHT • ORACLE

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Top competencies (People/Process/Technology)

The top competencies to activate Customer Centric Supply Chains:

• Outside-in rather than inside-out perspective

o Viewing the supply chain from the customers’ perspective.

• Defi ned processes

o Ensuring clear accountability is key.

• Integrated technology incorporating larger picture

o Technology supporting ‘one version of the truth’ for integrated pro-active

action, rather than disparate or fragmented systems.

Customer Centric Supply Chains • Building the case for changeOLIVER WIGHT • ORACLE

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Appendix

Key Points from other discussions:

• CEO-driven supply chain transformation can be performed in 12 months

(Oracle SUN case study: aligning the business by customer for removing cost).

• IBP is a key business process allowing group level harmonisation

(Uponor case study: establishing a rolling 24 month planning horizon).

• PVCA Concept (Pressure for change, Vision, Capacity and Actionable steps) can

deliver behaviour change quickly and effectively (Oliver Wight presentation).

• Oracle’s vision of supply chain technology supports the three main pillars

of Product Innovation, Plan and Execution. Many companies are leveraging the

latest advances in terms of cloud, analytics, social, mobile and big data to better

understand and serve customers’ needs whilst simultaneously reducing costs.

About Oliver Wight

At Oliver Wight, we believe sustainable business improvement can only be delivered by your own people; so, unlike other consultancy fi rms, we transfer our knowledge to you. Pioneers of Sales and Operations Planning and originators of the fundamentals behind supply chain planning, Oliver Wight professionals are the acknowledged industry thought leaders for Integrated Business Planning (IBP).

oliverwight-eame.com

About Oracle

Oracle engineers hardware and software to work together in the cloud and in your data center. For more information about Oracle (NYSE:ORCL), visit oracle.com.