Supply Chain Management: Why customer service should be your focus?

To say that we are living in tough and unprecedent times would be an understatement. The global and South African economy was in a dire economic situation with unemployment rates in excess of 30%. Customer spending had reduced resulting in a decline of sales revenue and profit margins. The arrival of the Covid-19 pandemic has compounded the current economic challenges that are being faced. SMME’s have to perform a juggling act to manage the various pressures that the business and supply chains are facing. This article will explore why customer service should be a key focus area and will also touch on a few strategies on attracting new and existing customers.

Customer service as a means to an end

Whilst there are many considerations to starting up, this article will explore the area of customer service as a means to ensuring your business survives and thrives. It may sound obvious, but I also want to get you to think differently about your approach to customer service. The reason I am suggesting a slightly different approach is that the competition will be more intense. You should not ONLY focus on providing good customer service in terms of OTIF (on Time and In Full). So I am going to propose another few options or views on driving customer service and attracting old and new customers.

Approaches to satisfying your customers

1. The obvious one-When you get the order ensure you deliver on time and in full.
2. When executing point 1, you will want to explore how you make your supply chain lean and agile to make your offering cost effective. If you can do this, you could offer your products at reduced rates which should appeal to your customer-given the tough economic climate. It will also improve your competitiveness and attract more customers.
3. Do a detailed SKU (Stock Keeping Unit) or product analysis to determine which are the most profitable, which your client wants the most (Pareto analysis) and then make decisions on what you will continue offering versus what you stop offering. Sometimes referred to as cutting the tail.
4. Review the costing for your products to check profitability. In my experience I have found that individuals get attached to a product and have made assumptions on the profitability which are no longer valid.
5. Consider how you can increase your service offering
6. Review the equipment and resources you have available and brainstorm what other products or services can be offered-repurpose the existing resources. Remember that in times of crisis there are also opportunities.

Conclusion

The key focus areas for business has to be minimizing your cost of doing business and satisfying customers which translates into sustainable revenue. The benefit of optimizing is that you can pass some of these savings on to your customers and improve your cash flow. I am also of the opinion that repurposing what you have and thinking differently is also an opportunity. The above thoughts are by no means easy but the sooner you restart this journey, the higher the probability of growing your customer base.

Author

Dr Kenneth Moodley is an experienced supply chain and business professional with over 25 years’ experience. He has a demonstrated history of working with both big corporates (example: Unilever & The South African Breweries) and SMME’s (Productivity SA) in various industry sectors as a senior Supply Chain Specialist, Leader and Business Coach.

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