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Breaking the Mold: Why Companies Need to Prioritize Customers Over Internal Focus
Global supply chain blogs
Vivek Sood: Sydney based managing director of Global Supply Chain Group, a strategy consultancy specializing in supply chains. More information on Vivek is available on www.linkedin.com/in/vivek and more information on Global Supply Chain Group is available www.globalscgroup.com
Vivek is the Managing Director of Global Supply Chain Group, a boutique strategy consulting firm specialising in Supply Chain Strategies, and headquartered in Sydney, Australia . He has over 24 years of experience in strategic transformations and operational excellence within global supply chains. Prior to co-founding Global Supply Chain Group in January 2000, Vivek was a management consultant with top-tier strategy consulting firm Booz Allen & Hamilton.
Vivek provides strategic operations and supply chain advice to boards and senior management of global corporations, private equity groups and other stakeholders in a range of industries including FMCG, food, shipping, logistics, manufacturing, chemicals, mining, agribusiness, construction materials, explosives, airlines and electricity utilities.
Vivek has served world-wide corporations in nearly 500 small and large projects on all continents with a variety of clients in many different industries. Most of projects have involved diagnostic, conceptualisation and transformation of supply chains – releasing significant amount of value for the business. His project work in supply chain management has added cumulative value in excess of $500M incorporating projects in major supply chain infrastructure investment decisions, profitable growth driven by global supply chain realignment, supply chain systems, negotiations and all other aspects of global supply chains.
Vivek has written a number of path breaking articles and commentaries that are published in several respected journals and magazines. Vivek has spoken at several supply chain conference, forums and workshops in various parts of the world. He has also conducted several strategic workshops on various aspects of supply chain management. He received his MBA with Distinction from the Australian Graduate School of Management in 1996 and prior to these studies spent 11 years in the Merchant Navy, rising from a Cadet to Master Mariner.
A company’s success depends on many factors, including its ability to prioritize the needs of its stakeholders. Two of the most critical stakeholders are suppliers and customers, as they play a vital role in ensuring the company’s operations run smoothly and its products or services are successful. However, a lack of focus on these stakeholders, as well as on end-consumers, can have a negative impact on the company’s bottom line. By failing to prioritize suppliers, a company may face supply chain disruptions, higher costs, and lower quality products. Similarly, a lack of focus on customers and end-consumers can result in lower customer satisfaction and loyalty, leading to decreased sales and market share. In this context, it’s important for companies to understand the importance of prioritizing these stakeholders and the steps they can take to address any issues and ensure their ongoing success.
In today’s highly competitive business environment, companies must strive to meet the ever-changing needs and expectations of their customers. However, some organizations tend to become too focused on their internal operations, processes, and procedures, which can negatively impact their relationship with customers.
A company’s success depends on various factors, including its focus on suppliers, customers, and end-consumers. Neglecting any of these three key stakeholders can have significant negative consequences for the business.
Firstly, a lack of focus on suppliers can harm a company’s supply chain, resulting in inadequate product quality, delays in production, and ultimately, lower customer satisfaction. If a company fails to prioritize its suppliers, they may not receive the necessary support to meet production deadlines, which can lead to stock shortages, production downtime, and lost sales. Furthermore, if suppliers feel undervalued, they may not prioritize the company’s needs, leading to lower quality products or delays in production. A breakdown in the supply chain can significantly harm a company’s reputation and lead to a loss of customers.
Secondly, failing to prioritize customer needs can also have negative effects. Customers are the backbone of any successful business, and a company that ignores their feedback, concerns, or needs risks losing them to competitors. Ignoring customer needs can lead to a decrease in sales, customer loyalty, and brand reputation. For instance, if a company fails to address customer complaints or concerns, it may lead to negative reviews, which can harm the company’s online reputation, leading to lower trust and brand perception among potential customers.
Ignoring the end-consumers, or those who use the company’s products or services, can have serious consequences. If a company fails to deliver a satisfactory experience to end-consumers, it can lead to decreased sales and negative brand perception. Customers may switch to competitors who provide better quality products, services, or experiences, leading to lower market share and revenue for the company. In addition, if a company fails to understand the needs and preferences of end-consumers, it may develop products or services that do not align with their expectations, leading to wasted resources and lost revenue.
An example of a company that suffered due to a lack of focus on its end-consumers is Victoria’s Secret, the women’s lingerie and clothing retailer. For years, the company relied on a narrow definition of beauty and female empowerment that did not resonate with its customers, leading to a decline in sales and market share. Victoria’s Secret failed to understand the changing preferences of its consumers, who were increasingly looking for inclusive and diverse representation in fashion and beauty. The company’s marketing campaigns and fashion shows were criticized for promoting unrealistic beauty standards and objectifying women, leading to a backlash from consumers who called for greater representation of different body types, sizes, and ethnicities.The company’s sales declined as a result of this backlash, with many customers choosing to shop at competitors who offered more inclusive and diverse options. In 2020, Victoria’s Secret announced that it would be rebranding and overhauling its marketing strategy to better align with changing consumer preferences. The company has since launched campaigns featuring diverse models and more inclusive sizing options, in an effort to win back its customers.
This example illustrates the importance of a company’s focus on its end-consumers and their changing preferences. By failing to understand and adapt to changing cultural norms and values, Victoria’s Secret lost market share and sales. Companies that prioritize their end-consumers and strive to meet their evolving needs and preferences are more likely to succeed in the long run, while those that fail to do so risk becoming irrelevant.
To solve a lack of focus on suppliers, customers, and end-consumers that negatively affects a company, it’s important to take a holistic approach that involves the following steps:
- Conduct a thorough assessment: Start by assessing the current state of the company’s supply chain and customer-facing operations. This includes understanding the company’s current relationships with its suppliers, identifying any inefficiencies in the supply chain, and assessing customer satisfaction levels. Gathering feedback from both suppliers and customers can be helpful in identifying areas for improvement.
- Develop a strategy: Based on the assessment, develop a strategy that prioritizes suppliers and customers. This includes identifying areas for improvement, such as reducing supply chain costs, improving supplier relationships, and enhancing customer service. The strategy should be aligned with the company’s overall goals and values, and should be communicated clearly to all stakeholders.
- Invest in technology: Technology can be a valuable tool in improving supply chain operations and enhancing the customer experience. Investing in technologies such as supply chain management software, customer relationship management software, and e-commerce platforms can help streamline operations, reduce costs, and improve the customer experience.
- Prioritize communication: Communication is key to building strong relationships with suppliers and customers. Regular communication with suppliers can help build trust and reduce the risk of supply chain disruptions, while frequent customer feedback can help identify areas for improvement and ensure that customers feel heard and valued.
- Continuously monitor and adjust: A lack of focus on suppliers and customers can be an ongoing issue, so it’s important to continuously monitor and adjust strategies as needed. Regularly assessing the effectiveness of the company’s supply chain and customer-facing operations, gathering feedback from suppliers and customers, and making necessary adjustments can help ensure that the company remains focused on meeting the needs of all stakeholders.
In conclusion, a lack of focus on suppliers, customers, and end-consumers can have a negative impact on a company’s bottom line. Failing to prioritize these stakeholders can lead to supply chain disruptions, inefficiencies, and a decline in customer satisfaction and loyalty. To solve this issue, companies must take a holistic approach that involves assessing the current state of their operations, developing a strategy that prioritizes suppliers and customers, investing in technology, prioritizing communication, and continuously monitoring and adjusting their approach. By prioritizing these stakeholders and investing in the resources needed to build strong relationships and enhance the customer experience, companies can improve operational efficiency, reduce costs, and ultimately, drive growth and profitability.
The global supply chain of products is an immense and complex system. It involves the movement of goods from the point of origin to the point of consumption, with intermediate steps that involve resources, materials and services to transport them. A supply chain encompasses activities such as purchasing, production, distribution and marketing in order to satisfy customer demands. Companies rely on a well-managed supply chain to meet their business goals by providing quality products and services at competitive prices.
Efficiently managing a global supply chain requires considerable effort, particularly when dealing with multiple suppliers located around the world. Complex logistics tracking systems are needed to monitor product movements from one place to another. Technologies such as artificial intelligence (AI) can help companies keep track of shipments across different locations for greater visibility into their processes.
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