Inefficient supply chain processes put customer satisfaction, retention at risk

There's nothing better than a supply chain that operates in a seamless and consistent fashion. Having a dependable supplier network and efficient procurement strategies and practices make everyone involved happy campers. However, a new study found many organizations are lagging in implementing streamlined operations, which puts customer satisfaction and retention at risk. In addition to heeding the insight of the report, organizations can also work with supply chain recruiters to upgrade talent levels.

Costs, risks present serious risks
A joint study by Capgemini and Oracle revealed the procurement concerns of nearly 600 top supply chain executives in manufacturing, high-tech and retail firms across the globe. From Customer Order through Fulfillment: Challenges in Manufacturing, High Tech and Retail found one-third of manufacturing respondents are content with order promising, with 50 percent saying exception handling needs to be enhanced. Because firms are increasingly putting more resources toward improving internal operations, the study found customer satisfaction and retention are becoming increasingly jeopardized.

Rising operational costs make the risk of losing or underserving clients even worse. The study found transportation expenses are up 76 percent, raw materials costs have increased 70 percent, labor costs by 65 percent and warehousing by 41 percent.

Overall, the key challenges facing respondents in regard to their supply chain are maintaining customer satisfaction (44 percent), order management complexity (42 percent) and inaccurate order promise dates (39 percent).

Jennifer Sherman, senior director of applications strategy at Oracle, said more cooperation between buyers and suppliers is needed to effectively address potential challenges and inefficiencies.

"Value chain integration is a long-term trend and there is an urgent need for more collaborative planning and execution," Sherman said. "The threats of volatility and change in the marketplace can be mitigated by the existence of an agile and scalable supply chain platform."

Multi-channel ordering a growing trend
Another key insight of the study is the rise of multi-channel ordering and the need for manufacturers to prepare for it: 86 percent of manufacturing respondents said customers order through multiple channels, with 45 percent saying the number of customers doing so has increased during the past 12 months.

"Manufacturers should consider following retailers in embracing the new multi-channel reality by evaluating up-sell and cross-sell opportunities across product lines to create a consistent and profitable customer experience across all channels," said Ben Pivar, senior vice president and head of North America supply chain technologies at Capgemini.