The role of customers in the supply chain

8 Jul 2014
Article by Achilles

Customers play an important role in the creation of supply chains.

When you stop to think about how you configure your supply chain and why, it soon becomes apparent that most roads lead back to the customer: Buyers will find the most cost effective suppliers in order to offer customers the best value; they will search for innovate partners to give consumers the best products and services; and they will endeavour to create a supply chain that is resilient to disruption and is ethically sound to ensure service quality.

The customer is a key figure in the supply chain and their needs, values and opinions will affect the supplier decisions buyers make.

In ‘How the strongest supply chains protect what customers cherish most’, Constantine G. Vassiliadis and Glen Goldbach from PwC claimed that the importance of the customer means that businesses should look to build their supply chain resilience around them.

With no supply network immune to disruption, the pressure is on organisations to safeguard their supply chains. Mr Vassiliadis and Mr Goldbach believe the way to do this successfully is to protect what customers cherish. This requires businesses to get a clear understanding of what consumers value about them and how they differentiate themselves in the marketplace.

“With your primary customer value proposition front-of-mind, you can segment the risks that would negatively impact how the supply chain contributes to that value proposition and build resilience capabilities to mitigate major risks,” the authors explained.

To build resilience organisations have to identify what threatens their ability to deliver and what risk mitigation strategies will be the most effective.

All strategies should be built around seven risk enablers, according to Mr Vassiliadis and Mr Goldbach. These include risk governance, flexibility and redundancy in product; network and process architecture; alignment between partners in the supply chain; upstream and downstream supply chain integration; alignment between internal business functions; complexity management/rationalisation, and; data, models and analytics.

Among businesses, 60 percent rate alignment between partners in the supply chain as the most important. This is followed by alignment and integration between internal business functions with 49 per cent.

Both of these priorities have clear links to satisfying the main concern of customers: high quality products and services.

As a buyer member of Achilles, it becomes much easier to place the customer front and centre in your business model. Our communities and supplier management tools make it simple to source, validate and monitor the right suppliers to streamline the tender process.

By implementing robust supplier management, it is possible to get control of risk and create a more resilient supply chain based around protecting customer interests.


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