Unlike traditional thinking which exclusively regards the supply chain as a cost centre, a new more service-oriented approach gains momentum: delivering what it takes to win customers and designing the upstream supply chain back from this. This turns supply chains from having a cost only focus into a flexible, agile and responsive contributor to company performance and competitiveness.
A customer-driven supply chain has a fast, accurate upward information flow and a responsive, efficient downward product flow. Studies show the quantifiable benefits customer-driven supply organisations have achieved:
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15% reduction in inventory
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17% improved order performance
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36% shorter cash-to-cash cycle
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60% faster time-to-market
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10% higher revenues
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5-7 % better profit margins.
PA Consulting Group helped British American Tobacco reshaping its customer service strategy towards customer-driven supply. Designing the supply chain from the 'shelf back' creates a much more commercially focused organisation with better understanding of consumer needs at higher level of service saving £20 Million in service failure cost.
PA also worked with a major European food company to develop and implement customer-driven targets such as 'on time' and 'in full' from the customer's perspective. Within nine months of the project starting, a 360% increase of throughput was achieved, customer service levels rose from 71% to 96%, and customer complaints fell by 91%.
To share these experiences and transform your supply chain to a customer-driven one, please contact us now.
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