Efficient Supply Chain strategies are very important for running today’s business.
Driver #4 – Who is your customer? Not all customers are equal. How do you reach your customers? How do you reach a differential advantage with your customers?
“Customer is the King.” All businesses are meant to sell either product or service. The first step to success is to know the customer and their requirements to deliver up to expectations. It is important for every business to focus on its own target segments. Not all customer and their requirements will be same. For example, the big branded retailers who are very successful in the US and Europe, may not be successful in Asia with similar strategy. Asia is a cost sensitive destination and customers are very demanding in terms of value of their money. So, if a manufacturer wants to set up a business in Asia, they need to look out for cheaper manufacturing and selling costs. Once the target customer requirements are understood serving becomes easy.
Cost and differentiator are two advantages customers directly relate with. These are also ways to get ahead of competition. While targeting a particular customer segment a supply chain manager needs to look for more opportunities to have the cost advantage. This advantage will reflect in the final price of the product. A business differentiator is another way to get ahead of the competition. Best example is the e-commerce home delivery option in retail. In the e-commerce, retail space the product gets shipped for free to the customer once order is placed via internet. This is a differentiator from the traditional brick and wall retailers where customers need to visit the store. What further differentiate this business are the shorter delivery times. This extra logistics service with short delivery time is an example of competitive differentiator.
The bottom-line is to design a customer-centric supply chain. Apple is a great example of this driver. Apple’s supply chain and brand value is one of the best in the world. They are effective and make profits out of a loyal customer base. They know their target market well enough and serve them diligently. Apple integrates customer experience into its design and development process to understand “customer’s pain points” and “opportunities for Apple.” Their models, features and designs are biggest differentiators.