Is Being Responsive Enough To Satisfy Customers Throughout The Supply Chain?

“CUSTOMER IS A KING”

Phrase we have been listening from the moment we started to learn about business and its procedures. Every business have a motto to maximize its profit and it can be achieved by providing customers what they are paying for, by fulfilling their needs or you can say by satisfying them. As ROSS BEARD said in one of his blogs that:

“Customer satisfaction plays an important role within your business. Not only is it the leading indicator to measure customer loyalty, identify unhappy customers, reduce churn and increase revenue; it is also a key point of differentiation that helps you to attract new customers in competitive business environments”.

For that reason many strategies are being used to strengthen the supply chain of the business. One of them being used is Responsiveness, in order to fulfill customer’s demand at shortest possible time. Responsiveness is a key factor for the overall functionality of the business chains linked to each other. Responsiveness provides companies with the flexibility and opportunity to quickly react to the uncertain events and remain a robust participant in the supply chain game. As STUART ROY said:

“Next-generation supply chains will sense and respond to demand changes in real time in order to maximize business outcomes.”

But is it enough to be just responsive? Progressively challenging environment in which businesses operates, supply chain organizations also caters some other aspects which plays a vital role in order to satisfy customers. Quality, quantity, location, price etc. and most importantly which sort of product/service customer demands for and are we providing right product or service to the right customer? Because with the technological advancements, customers becomes more aware of the latest trends, latest products, its features, its substitutes that can be used, etc. Due to these modernized changes customer’s demand increased so as the expectations.

Within in the supply chain there exists many customers or we can say there is a continuous chain of customers of the product in its different forms on different levels until it reaches to its final consumer or end user. Let’s suppose that company A, manufacturer of juices faces demand shock (positive). Demand of its orange juices increased by 30%. In order to meet the demand they ordered approximately 200 liters of orange juice concentrates from its supplier K. Company A is a customer of the its supplier in this case. Supplier K responded as agreed to deliver the concentrate at this short notice but still company A was unable to meet the demand. What could be the possible reasons?

1. Shortage

Due to shortage of quantity of the product (concentrate) company A was unable to properly respond to the demand which resulted loss of sales.

2. Low Quality

The concentrate delivered to the company was of low quality due to which company was unable to make the required product again resulting in lost sales.

3. Price

Supplier asked for increased price for the product and company in order to meet demand agreed on it. But it resulted in the increase in finished product (juice) which decreased the sales of the juices.

In all of these three assumed situations supplier was responsive but still was unable to satisfy its customer as well as customer’s customer. This can lead the customer (company A) to change its supplier or for such adhoc situations will contact its other suppliers to avoid the same mistake to rely on only one supplier.

This was an example from B2B perspective. Real time example of B2C situation most of the people faces including me is when we shop online. In this modern age, people find it more convenient to shop online rather than going to the shopping malls and other related places wasting their time and energy, so as I. Recently I ordered a cute purse online which was beautifully presented and descripted. I requested them to deliver that that product till next day I needed that urgently. They agreed and next day I received my parcel on time but still I was disappointed. Reason? Purse in the picture and in my hand was totally different. It was nothing as it was described. I was overly charged, that thing didn’t seems worth it.

In both B2B and B2C perspectives, suppliers/ sellers were responsive but still didn’t meet their customer’s expectation which lead to the dissatisfaction and loss of customers. As KELLY BANNER said:

“In both B2B and B2C purchasing, problems will arise. How they are resolved creates as much of an opportunity to increase loyalty as a completely positive experience does.”

Any business that provides a product or service to customers, customers are always among its top priorities. Feedback should be taken by the customers to understand what they actually want, what they expected to get and what they like or hated about the product/service. Being responsive is a good strategy to be used but it is necessary to be understood that it is not enough to satisfy your customers.