Submitted on Wed, 2014-08-06
By Jim Laverty

There’s nothing more important to earning customer satisfaction (and in turn profitability) than your supply chain.

Why Your Supply Chain Plays the Largest Role in Customer Satisfaction

Your supply chain performance can be your hidden weapon to boost customer satisfaction and to increase your profitability. No other part of your business can have the supply chain’s impact on reaching the customer, lowering retail prices, and improving service levels; meaning effective supply chain management creates value for both your customers and your business.

 

The Importance of the Supply Chain in Customer Satisfaction

The customer expects great service. They’re giving you money to perfectly satisfy their needs to get a product on time and in one piece. If a problem does arise, they want your company to have the transparency to show why it occurred, and what you’re going to do for them to fix it. Especially in the modern climate, where a customer can blast your company publicly on social media, your brand’s reputation is more susceptible to damage from preventable supply chain mistakes than ever before.

“Any supply chain is only as strong as its weakest link. A company can move a product from China to the United States, clear it through Customs, move it to a distribution center, and fulfill it in record time. But if it doesn’t deliver the product to consumers quickly enough, they are not happy, and the company’s supply chain has failed.” — Inbound Logistics Magazine

Your supply chain is far and away your most effective customer service tool. It directly dictates the two most vital parts of customer satisfaction: price and delivery. Having an efficient supply chain means you can beat your competitors on retail price and improve your profitability. Having high performing operations also means you’ll be able to meet or exceed your customers’ expectations on delivery of their product. Giving your customers what they want when they want it and at the cheapest price is key to keeping them satisfied.

Effective supply chain management allows you to do just that. By choosing the right systems, approaches, and partners within your supply chain, you’re giving your customers, be they individuals or businesses, the great service, transparency, and visibility they crave. You have complete control of your products’ journey from conception to delivery, implementing systems to reduce errors and increase inventory efficiency. The more optimized your supply chain is, the better the customer experience, the happier they’ll be, and the more likely they’ll be to make a purchase from you again. No other part of your business can come close to matching the supply chain’s direct impact on creating return business.

 

Customer Satisfaction Metrics to Track

While tracking traditional metrics that show supply chain effectiveness will give you a good idea of how well you’re treating your customers, you need to go further to continually enhance your customer satisfaction.

  • How many new customers are coming in every day?
  • How much is every individual customer worth to you?
  • What are the 5 most common reasons for a customer to leave you?
  • What areas of your business receive the most complaints?

These metrics will allow you to uncover one of the secrets to business growth: connecting changes in profitability to changes in customer experience and satisfaction. In order to do this, you need to integrate your analytical and accounting systems to the point that you can clearly view the entire supply chain progression for every client. What step in the lifecycle of that client is causing them to complain most? Is a part from a specific supplier consistently failing? Is one of your distribution centers slower than the rest? Is the last mile responsible for damaging packages? Fixing any problem areas will keep your customers loyal and allow you to grow.

Connecting all the dots can find the areas of your supply chain that cause the highest levels of dissatisfaction amongst your clientele, so that you can optimize it to improve your overall profitability.

 

Learn More About Running a Profitable Supply Chain

Through effective supply chain management, you can take control of the customer journey to provide the highest level of service. Learn more about how you can reduce costs by exploring some of our other blog posts and giving our experts a call to talk about how your organization can run a more profitable supply chain.

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