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We are very fortunate to work with many great clients. One of these is OVO (October’s Very Own). Darren Hallsworth, from OVO, is an expert on managing people and supply chain matters. He has 25 years of leadership experience in Supply Chain, Technology, Inventory, Finance and Planning Management, so when he offered to be a guest writer, we jumped at the chance, as we are helping a lot of clients grapple with this and related issues.
Managing Customer Trust in Uncertain Supply Chain Conditions
After nearly 6 weeks and in the face of increasing demand, I still have not been able to secure a box of Frosted Flakes from my local grocery store! Recently, my kids have started to question the veracity of my vague explanations pointing to a global supply chain crisis. This precipitated an alarming erosion of trust across the breakfast table. Sadly, toast and oatmeal will only quell the complaints for a limited time. This is the same kind of scenario that has also been playing out in our office both across internal departments and with our external stakeholders since the beginning of the pandemic. In this case though, it is frustrated and confused customers that are driving the urgency.
Creating a flexible, tailor-made Supply Chain strategy with robust linkages from customer demand through to merchandise planning, product sourcing, purchasing, manufacturing, transportation, distribution and back to customer satisfaction is a beautiful thing. Even more so when each step of the process is efficiently underpinned with data points and KPIs elegantly tracked in real time across integrated software applications. Of course, glitches occasionally happen (the container fell off the boat in heavy weather or the factory added the wrong logo) but generally speaking these are the exception and easily explained.
The current scenario playing out across shipping points globally for many businesses is an entirely new kind of challenge. Port volumes, lack of personnel, blind bookings, rolling bookings and cancelled vessels are all doing their part to create a hard stop vacuum break in many well-constructed and time tested supply chains. Even more challenging is that the big question ie “Ok, so when?” is increasingly difficult to answer.
Whether it’s to the end consumer clicking on the shipping details for a swanky new hoodie, or a manufacturing operation awaiting a critical component, the frustration is palpable. From our point of view, as a trusted vendor ordering in less than container quantities and trying to build a reliable brand, our options are often severely limited. Besides running last minute air freight margin implication scenarios or putting our heads in the sand and hoping it goes away there is often nothing left to do but to ‘fess up! This in turn has demanded a little soul searching to say the least.
I’m sure it’s fairly widely accepted that honesty and communication are the hallmarks of a successful long-term relationship. As with the old inventory adage of right place, right time, and right quantity there ought to be a similar one for such urgent and necessary communication to the waiting party. Perhaps as well as right time we would add right forum, right frequency and right amount of information to construct a useful mantra. First of all the internal organizational or inter-departmental communication must be clear, honest and up to date so that everyone from the DC Manager to the CRM Director are all on the same page.
In terms of the customer-facing communication, whether it is a personal phone call and hand-written letter from the CEO to uphold the customer promise of a luxury brand or an accessible portal with real time updates for the JIT manufacturing customer, the media is the message and should be closely aligned to the brand.
The art of providing status updates when nothing in fact has changed is at least as old as the CNN News Banner stream but when done skillfully and with the right amount of sensitivity can go a long way towards maintaining trust under trying circumstances. The form and detail of the communication must also be brand/industry aligned with an eye towards strengthening the bonds of partnership through these shared challenges. Refunds and incentives can also be useful tools while payment terms may also have to be addressed and adjusted. The key is to ensure that the customer feels considered, plugged in and informed with as much detail as is feasible.
In conclusion, when even the strongest Supply Chains face systematic and uncertain disruption, there exists an opportunity to strengthen relationships between both internal and external stakeholders. The information update loop must be as real time and customized as the Supply Chain itself displaying the clear diligence and urgency to course-correct along with the appropriate amount of sensitivity (or empathy) to the customer’s predicament. Sadly, I have far too little empathy with the intricacies of my kids’ cereal preferences and besides there are plenty of Froot Loops out there!
If you have concerns related to Supply Chain, please give us a call. We have expert consultants and IT specialists ready to lend a hand. We can be reached at [email protected] or (416) 429-0796 or 1.877.238.9944 (Toll Free).