We’re Not in Kansas Anymore

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In the classic story, “The Wonderful Wizard of Oz,” written by L. Frank Baum, the main character, Dorothy Gale, is caught in a tornado that transports her and her dog, Toto, into a magical land called Oz. The line, “Toto, I’ve a feeling we’re not in Kansas anymore,” summed up the fact that not only did Dorothy travel away from home physically, but she had traveled to a new reality where anything was possible. I think many supply chain leaders can empathize with Dorothy’s feelings. 2020 has transported supply chain leaders into a new reality, where the global pandemic, an economic crisis, calls for racial justice and the existential threat of climate change converged to drive step changes in both our personal and professional lives. The COVID-19 outbreak sent industries such as travel, traditional retail and manufacturing into a tailspin, while opening new doors for e-commerce, healthcare, food delivery services and online gaming. However, the global lockdowns put severe pressure on supply chains, causing product shortages. Digitalization has accelerated to support increased levels of automation, efficiency, speed, connectivity and new business models. To cope with this changing reality, companies are seeking innovative ways to survive and thrive and cater to changing customer expectations. The impact of failing to adapt to changing customer needs should not be underestimated. In a Gartner survey, 28% of respondents indicated they would switch away from suppliers if their needs change, and they didn’t feel their current supplier could meet their needs. In this same survey, 24% of respondents indicated they would switch away from suppliers if they had a customer service experience that was below expectations. Today, technology provides consumers with considerable power to shape perceptions of brands and services. Consumers are increasingly in charge of the message they are sending back to suppliers about their likes and dislikes, and their requirements, compared to what is actually being delivered. These demands are spilling over from B2C into B2B relationships, driving customers across industries to seek greater levels of personalization and responsiveness. Data regarding customer wants and needs is rapidly increasing. Leading organizations are continuously monitoring and leveraging this data to create a deep understanding of customer wants and needs. This knowledge is shared across the enterprise, and a cross-functional approach — including supply chain — is taken to prioritize customer needs and create and adapt products, solutions, services and experiences to meet those needs. Adjusting to the new reality has pulled supply chains closer to the customer. Supply chain leaders are being tasked to create capabilities that go beyond sensing and responding to changes in demand plans. They are becoming full business partners in transforming the decision processes and culture of their organizations to be customer centric — to drive excellence in managing the customer experience (CX). This transformation requires the development of new skills and capabilities and a shift away from functional, siloed thinking to a cross-functional approach. Like Dorothy, supply chain leaders must assemble companions on the journey to provide guidance and support. Consider the following: The Tin Man wanted a heart. Supply chain leaders must inspire the minds and hearts of the organization to coordinate CX across the organization. Leaders need to inspire a common purpose for engaging customers, but also be able to justify the investments being made, articulating the economic consequences and upside to business partners. Such a fact-set is required to drive an enterprise-wide dialogue, break down silos between functions and create a cohesive governance model that drives a customer-centric culture by engaging all levels of the organization in the change. The Scarecrow wanted a brain. Supply chains must develop a central repository, or brain, to listen to and understand customers and integrate the supply chain customer knowledge into the larger enterprise-wide “customer brain.” As discussed earlier, customer behaviors can rapidly change and adapt. Organizations need advanced cross-functional processes, information sharing, talent and technology to ensure they set aside biases, listen, then adapt just as quickly, and anticipate customer needs. The Cowardly Lion wanted courage. Supply chain leaders need to have the courage to reset strategies to align the organization to the evidenced, specific needs of each customer segment. They need capabilities to measure results, and prioritize executive attention and investments (such as technology) to achieve strategic goals. Turning customer insight into clear actions are hallmarks of a world-class customer experience capability. This requires a mindset where everyone has a role to play in customer advocacy, innovation and execution. We are not in Kansas anymore. Unlike Dorothy, there are no ruby slippers that will magically transport us back. Supply chain leaders must learn to survive and thrive in the new reality. As we head into 2021, decisions made during this period of uncertainty will forge a new set of winners, just as they did in the wake of the financial crisis. Fresh thinking and a focus on the customer will aid supply chain leaders in steering through the "new normal" and beyond. Happy holidays to you and your families! Beth Coppinger Senior Director, Analyst Gartner Supply Chain [email protected]

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