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.