One of the most interesting aspects of Supply Chain Management is the concept of Service Supply Chain – the intersection of Marketing, Customer, and the conventional Supply Chain. Different people define Service Supply Chains differently, but essentially I see it as everything that goes behind acquiring, servicing and satisfying your customer base from a service and experience angle. By combining the personality of Marketing and the efficiency of Supply Chain, companies can revolutionize the way they approach their customers, while improving the way they operate.
This looks different for different industries. Take a local chain restaurant – from the point a customer decides to eat at a restaurant, to the experience of the meal, to the billing afterward – at every point along the customer journey there are literally hundreds of ways to optimize the process.
Traditional Supply Chain methodologies and metrics can be especially helpful in this regard. Concepts like Lean, Agile, Digital and Collaboration all feed into optimizing the customer journey. Continuing the example of our local chain restaurant, we might ask the question: how can they use Supply Chain principles to improve the way they acquire and service their customers?
From a customer acquisition stand point, one might ask how much a customer costs to procure. What can an organization do to get more bang for their buck? Let’s approach the problem as procurement consultants – we can start by looking into the leverage we have over our advertising partners, or challenge the methods we are using to attract our customer base. We might ask what the “Total Cost/Benefit of Ownership” is for our customer base, and whether we should alter our marketing methods to improve this ratio.
I recently ate at a popular national chain where the waiter greeted me and put a brown paper bag down in front of me.
From an experience standpoint, we could look at customer satisfaction metrics (perhaps indirectly, by looking at tipping) to guide our logistics plan. What is the number of wait staff we require to be successful? How are these wait staff using their time? We can fundamentally question how we service our customers. I recently ate at a popular national chain where the waiter greeted me and put a brown paper bag down in front of me. The bag contained a knife, a fork, a spoon, a napkin and a straw. Rather than delivering these basic dining items piece-meal, they delivered them all together in a neat package, right up front. Is that the most cost, time and logistically efficient way to deliver basic dining items? I don’t know – but considering the time it takes to wrap dining instruments, the lost customer satisfaction of not having a certain item and the wastage of over-delivering these items, I can definitely see a use case. The point is, evaluating a customer’s dining experience using Supply Chain methodologies is likely to provide unique insights towards improving the way companies do business.
From a billing standpoint, restaurants could question the logic of a traditional way of billing their customers. Think about the time waste that goes into delivering a bill on paper, swiping a credit card, and then delivering the bill back to the client, only to have to charge a tip later. The whole process reeks of inefficiency. At the same local chain I recently ate at, I checked myself out using a tablet that was sitting on the table. I could verify my bill, swipe my card, and request my receipt via email. These are lean and digital principles at work – minimizing waste and maximizing customer value.
Companies can no longer afford to think in functional silos. A Service Supply Chain way of thinking bridges the gap between finance, conventional Supply Chain and marketing and can render significant profit, efficiency and customer service gains for those companies that start looking at the bigger picture.
Spartan Consulting can help you look at your Service Supply Chain. Get in touch with us here, and see how we can help.
Kevin Hill serves as President of Spartan Consulting. He has experience in performance improvement consulting in a wide variety of industries and is currently completing his MBA at the Broad College of Business.