“Customer Experience Overtakes Cost as Driver to Innovation”, says Report

BluJay Solutions, a leading provider of supply chain software and services, this week released the findings from its second annual research study in the report, “Focus on Customer Experience: Research on Supply Chain Priorities and Investments.” Commissioned by BluJay and conducted by Adelante SCM, in partnership with the Council of Supply Chain Management Professionals (CSCMP), the research explores key topics including customer experience, technology investments, barriers to innovation, partner connectivity, and data in the context of supply chain and logistics innovation.

Supply chain professionals from industries including manufacturing, retail, and logistics service providers (LSPs) were surveyed, with 438 qualified respondents answering a series of questions about innovation, customer experience, and technology. Participants self-identified their company’s performance relative to industry peers, along culture relative to technology adoption (Above Average Performers v. Average or Below Average Performers, and Innovators/Early Adopters v. Laggards/Late Majority, respectively).

“One of the important concepts revealed by the research is that successful companies show by their priorities that they focus on the end result first – in this case, the customer experience,” said David Landau, Chief Product Officer, BluJay Solutions. “As opposed to starting with a trendy technology and figuring out ways to use it, there’s an interesting case to be made from this data about having greater success with a ‘results-oriented supply chain’ approach; that is, starting with an end goal of what to accomplish, then figuring out the how. Companies leading in performance and technology adoption show an emphasis on capabilities that deliver tangible benefits to the customer.”

Patrick Maley, BluJay’s Chief Marketing Officer adds: “We commissioned this research in 2018 to explore the impact of customer experience in the supply chain industry, with a hypothesis that technology adoption, investment drivers, and financial success were becoming more connected. The second annual survey goes further to suggest that customer experience is not only a key driver, but also that being successful in this focus requires seamless partner connectivity and data quality to deliver value efficiently.”

Key findings from the survey include:

Customer Experience Reigns Supreme
Overall, 61 percent of survey respondents Agree or Strongly Agree that customer experience will overtake price and product as the number-one brand differentiator in the next five years. In addition, ‘To deliver an enhanced customer experience’ rose to the top of the list as the main driver for supply chain innovation, receiving 30 percent of top factor votes and pulling ahead of ‘To reduce costs.’
There was a notable difference, however, between the importance that large and small companies place on the customer experience. More large companies (31 percent) Disagree or Strongly Disagree that customer experience will become the number-one brand differentiator over the next five years when compared with smaller companies (18 percent). The data may indicate that smaller companies view customer experience as a more effective way to compete against their larger peers rather than trying to contend on price alone.

Growing Demand for Real-Time Visibility and BI/Analytics
Respondents ranked their top supply chain investments, and overall BI/Analytics received the most top factor votes (22 percent), followed closely by Visibility (21 percent) and Transportation (16 percent).
Real-time freight visibility is one of the hottest investment areas for shippers and LSPs today. Real-time Visibility is also the most important supply chain capability for delivering an enhanced customer experience, according to survey respondents.

Greater Trading Partner Connectivity Leads to Better Supply Chain Performance
The survey results show that companies that are more electronically connected to their trading partners are more likely to have better supply chain performance.
Electronic Data interchange (EDI) and Email are the two most common ways data and information are exchanged with trading partners, but APIs are gaining ground, especially among Innovators/Early Adopters.
The survey uncovered that data quality remains an area for improvement across the supply chain. Poor data quality results in poor supply chain visibility, which in turn results in negative consequences including lost sales, higher transportation costs, excess inventory, and reduced customer satisfaction. These results underscore the need for companies to clearly define roles and responsibilities around data quality and start viewing it as a valuable asset worthy of investment.

Making Supply Chain a C-Suite Conversation is Critical to Driving Innovation
The survey findings revealed that ‘Lack of upper management support for funding/resources’ is a top barrier to supply chain innovation. Particularly for Laggard/Late Majority companies, it is the biggest barrier to innovation, receiving 23 percent of top factor votes (compared to 10 percent for Innovator/Early Adopter companies).
These results suggest that Innovators/Early Adopters and Above Average Performance companies are better at developing and communicating the business case for supply chain innovation investments than their counterparts. It could also mean that upper management teams at Innovators/Early Adopters and Above Average Performance companies are doing a better job of creating innovation-driven cultures.
These findings highlight how important it is for supply chain executives to claim a seat at the leadership table and continue to communicate how the supply chain matters to overall business success.
Read the full report, “Focus on Customer Experience: Research on Supply Chain Priorities and Investments” at www.supplychainresearch.info/2019.