Legacy Supply Chains aren’t fit for purpose in the age of customer experience

By Adrian Johnston, Senior Vice President of Cloud (SaaS) Applications at Oracle Asia Pacific

Businesses in Asia Pacific face what is arguably the most critical customer experience imperative in the world. This is because here, 71 percent of consumers make online purchases and investment is ecommerce is on the rise. Meanwhile consumers are becoming more demanding: 76 percent of consumers in the Asia Pacific region now say that customer service should be a company’s top priority. Businesses across Asia must therefore do all in their power to raise the game and create winning customer experiences that keep people coming back for more.

Business leaders in the region today are challenged with delivering differentiated customer experiences; leading many to rethink the way they design their supply chain operations. These organisations must cope with exponential demand, and supply chains need to become much faster and precise. As businesses in Asia set out to meet these challenges, 2018 looks set to be a critical year, with 94% of supply chain leaders saying that digital transformation will fundamentally change supply chains this year. Moving quickly, business leaders in Asia are investing in digital tools to obtain real-time demand data, shorten replenishment cycle times, optimise deliveries and predict future demand. The rest will be left behind.

Who exactly are these leaders? There are many to choose from: the Asia Pacific market brings together the right combination of logistics and ecommerce expertise required to drive breakthrough innovation. Where this innovation happens, customer experiences are taken to a new height.

Supply chain transformation in action

Take Speed Factory by Adidas: a concept that’s making its way to Shanghai and Tokyo. Speed Factory uses advanced 3D printing technology from Carbon, Adidas’ supply chain partner. The printers allow athletes to order hyper-personalized running shoes with unique soles that are tailored to individuals’ weights, foot contours, and running styles. The shoe design even incorporates data that takes account of conditions in different cities, thereby meeting the needs of runners in the exact environment in which they’re running.

By rethinking its supply chain, Carbon has enabled something special: marketing on a truly individual level. In part, it has been able to do this through advanced cloud applications for areas such as customer service, procurement, inventory, order management, manufacturing, and supply chain. The cloud has made it easier for Adidas to interact with a global supply chain in an economical way – essential as it ramps up production with global brands.

But it’s not only consumer brands that are enhancing the customer experience through supply chain transformation. Take Bac Ky Logistics. This Vietnamese logistics company has embraced automation to deliver a stronger overall customer experience. The company has completely automated the scheduling of transportation and delivery management; in the process enhancing transparency and speed of service for customers. The company has also used advanced, data-driven cloud applications to better visualise its supply chain, logistics, and trade information in real-time. This has helped it optimise resourcing and reduce the number of empty containers.

Other organisations are looking at the power of supply chain transformation to play an integral role in the move to digital. Thai company Tipco Asphault manufactures and distributes asphalt products servicing road construction, maintenance and paving industries. Having launched its ‘iChange’ strategy to transform the organization to respond the imperatives of digital and industry 4.0, it needed a cloud specialist to help modernise its supply chain and thereby enhance the customer experience. Tipco’s strategy centres on overhauling its IT system across key business units including management, purchasing, production process, transportation, distribution, sales, and after sales services.

Supply chains in the digital age

These companies are disrupting the supply chain to drive innovation. They are doing this by using data to better join up their back- and front-offices, influence product and service development, enable hyper-personalisation and drive efficiency.

According to Bain & Co, companies that integrate digital technologies into their supply chain can quickly improve service levels while cutting costs up to 30 percent. Agile supply chain operations are, therefore, critically important to ensuring front-office innovations are a success – but most companies are not yet rebuilding their back-office functions at a fast-enough rate. In fact, according to research from Accenture and HfS, over 50 percent of enterprises say it takes months or even years for their support business functions to make changes in response to evolving business needs. The reasons given for this include siloed internal processes, which approximately 80 percent of organisations cited as barriers preventing them from achieving their business goals.

Successful companies build a short-term roadmap with concrete initiatives that will start delivering benefits quickly and provide flexibility in reaching long-term supply chain goals.

We believe the cloud roadmap, with Software-as-a-Service for supply chain operations as the core, is answer. The cloud brings together the disparate data, systems and partners that comprise supply chains and facilitates their integration across the enterprise. As such, the cloud provides the basis through which back-office operations can be made agile rapidly, and with minimal disruption to the business. When you start adding AI and IoT led business applications to the supply chain operations, this transform businesses into intelligent enterprise further fuelling innovation and customer experience differentiation.

Act now

Begin by debating questions at your next board meeting – What will business in Asia look like in five years, and what supply chain capabilities you need? Organisations that are leading the way in the adoption of cloud and data technologies are making ecommerce faster and more personalised than ever. Other innovators are using data from manufacturing and post-sales to iteratively improve their services and create additional revenue streams through new business models. The supply chain is a fundamental driver of success in the digital age and all organisations need to act now by looking at how their own supply chain is set up and whether it is still fit for purpose.

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