How to Improve Customer Satisfaction through Supply Chain

As businesses work to ensure customer satisfaction, the answer they need might just be in their supply chain.

Every business that intends to make money will always value its customers. An organization that prioritizes customer satisfaction will also gain the loyalty of its customers.

In this article, we explore improving customer satisfaction through the supply chain.

 

Introduction

Customer satisfaction is how organizations or businesses gain a competitive advantage over their industry rivals. Example: LG may offer its customers more hardware options than Samsung because they believe those options will endear customers to their product.

There are a few ways a business can ensure customer satisfaction. One of the significant ways is through its supply chain. Customer-focused supply chains are designed intentionally with the customer in mind, not necessarily profit. Of course, putting your customers first will always bring profitability.

 

Importance of Customer Satisfaction

Customer happiness is important to the success of any business. And its impact extends beyond sales and marketing. Indeed, customer happiness is important in the supply chain and directly impacts its efficiency and efficacy.

Here are several reasons why customer satisfaction matters to the supply chain

1. Repeat Business

Satisfied consumers are more likely to become loyal consumers, making repeat purchases from your company. This stability in demand enables better supply chain planning, lowering the risk of product overstocking or understocking.

2. Demand Forecasting

Businesses can enhance the accuracy of their demand forecasting by tracking client satisfaction levels and learning about their preferences.

This aids in optimizing inventory levels, manufacturing schedules, and logistics. It all results in cost savings and improved overall supply chain efficiency.

3. Supply Chain Responsiveness

Customer satisfaction assists in identifying areas for improvement and addressing potential supply chain challenges.

Businesses may improve supply chain responsiveness by listening to customer input and addressing their concerns, ensuring that products and services are delivered on time and exceed consumer expectations.

4. Brand Reputation and Loyalty

A happy customer will likely spread the word about your company, resulting in a better brand reputation and favourable word-of-mouth referrals.

This, in turn, draws new customers and reinforces brand loyalty, resulting in a virtuous cycle that benefits the whole supply chain.

5. Competitive Advantage

Customer happiness provides organizations with a competitive advantage. Customers are less likely to move to your competitors when they are satisfied, resulting in lower customer turnover.

It empowers your company to concentrate on increasing its market position and surpassing competitors.

6. Continuous Improvement

A customer-centric strategy encourages organizations to improve their products, services, and procedures continuously. This culture of continual improvement pervades the supply chain, driving efficiency gains, cost savings, and innovation.

7. Long-Term Partnerships

Customer satisfaction promotes long-term relationships between companies and their suppliers. A happy client is more likely to form strategic alliances with suppliers, allowing for mutual benefits such as cost savings, enhanced quality, and shared innovation.

 

So, How Can You Improve Customer Satisfaction Through The Supply Chain?

1. Product Quality 

With so much competition between supply chains today, quality is one way a business can stand out. Today’s generation of customers values long-lasting products that deliver on the manufacturer’s promise.

Ideally, before promising a product and its features, your company should do the work or research and, therefore, be able to deliver on that. So, how can your supply chain ensure product quality? It all starts with sourcing the right partners and raw materials.

The supply chain plays a significant role in putting these materials together and delivering them in good condition to your customer at the best possible cost.

2. Increase Product Variety or SKU Proliferation

Before the iPhone 6, Apple Inc. released just one iPhone each year. They had to change this strategy because the company realized they had customers who wanted certain specifications or features that their one “iPhone” release failed to offer.

Because they had initially stuck to one phone, competitors like Samsung and Huawei were stealing these customers yearly. Today, Apple releases three phones, reaching more customers.

The point of that short story is that every organization or business has customers who want various products for several reasons.

Coca-Cola has Coke and Diet Coke, Samsung has the Galaxy Note and Note Plus, and Amazon has same-day delivery and two-day shipping.

Having variety in your product offering is one way to improve customer satisfaction. Of course, a supply chain requires flexibility and agility to offer multiple products. 

3. Enhance Transparency and Accountability

Organizations are constantly at the mercy of their customers, who are clamouring for transparency and accountability.

Customers increasingly value sustainable practices, profit moderation, and adaptability from the supply chains of businesses or organizations they patronize.

Customers want to know where these businesses or organizations source their products, how they source them, and other ESG practices they embody.

Sustainable practices aren’t the only factors your supply chain should be worried about. Company values and stories also play a huge role.

Is your supply chain model living up to what your business professes? Are your customers getting a good deal, or are you ripping your customers off?

Your supply chain can answer these questions in keeping with transparency or accountability.

4. Shorten Delivery time or Lead time

Lead times are essential for any successful supply chain. As much as customers want quality products, they also want the product delivered to them on time.

Some may argue that delivery times are part of product quality, which has some merits.

With the aid of technology and automation, you can reduce your supply chain’s lead time or delivery time. You also improve the efficiency of the supply chain by cutting down on waste.

5. Integrate Technology

Increasingly, Supply chains and technology are intertwined. Technology has never been more critical to any supply chain, especially with the increasing complexity of supply chains.

Technology makes the supply chain more efficient, reduces defects, and increases the output of the supply chain or products from the supply chain. It also helps the supply chain respond promptly to customer demands.

With the right technology, you can track trends faster and translate them into your supply chain. Technology also helps you predict the demands.

One of the products Amazon offers is same-day delivery. They use robotics and automation in their fulfilment centers to ensure this outcome.

As a supply chain manager eager to improve customer satisfaction, you certainly cannot go wrong by integrating technology into your supply chain.

6. Agile inventory or stock management

An effective inventory management strategy will certainly go a long way in meeting customer needs, thereby improving satisfaction.

Zara uses a mix of inventory management strategies to stay ahead of its competitors. They also use technology to efficiently manipulate these inventory management strategies, which helps them stay on top of their customer demands.

Bottomline: Inventory management strategies will enable an agile inventory system, helping you respond to the customer promptly.

 

Key metrics for tracking customer satisfaction

1. Rate of daily, weekly, or monthly new customers

2. Why are your customers leaving

3. At what rate are your customers leaving

4. What are the primary customer’s points when reviewing your product?

5. What areas of your supply chain receive the most complaints or compliments?

6. Do your customers believe the product has lived up to the hype?