Customer Trust, The Hidden Power of Supply Chain Management

Across industries, companies continue to highlight difficulties related to supply chain disruptions, which affect production timelines, increase costs, and impact product availability. This recurring issue, driven by geopolitical and global trade tensions, transportation delays, and the ongoing impacts of the COVID-19 pandemic, takes a drastic toll on operational capabilities and cost structures. 

As market volatility gets worse, not better, companies are finding it increasingly difficult to contend with skyrocketing customer expectations. But supply chain management is one area that can make a huge impact. 

According to Gartner, 83% of companies are improving their supply chains to be more customer-centric by prioritizing customer service, offering unique services, and providing multiple fulfillment options. Moreover, research by McKinsey has found that companies that actively digitize their supply chains can anticipate an average annual growth of 3.2% in EBIT.

In this blog post, we speak with Nifemi Omotola, Senior Product Manager at Spryker. She has spent considerable time working directly with customers on digitizing their supply chain management and shares her thoughts on its hidden power of building customer trust.

Supply chain is customer satisfaction 

Supply chains were important in commerce even before the advent of digital commerce. From the sourcing of raw materials to the delivery of finished products, the supply chain encompasses a complex network of processes and entities working together seamlessly to meet the demands of consumers worldwide. 

“I experienced the critical importance of the supply chain firsthand when I spent over 30 minutes demonstrating some of Spryker’s sophisticated features to about 18 stakeholders from the customer side,” says Nifemi, recalling her initial experiences with supply chain. “The most crucial question raised was whether stock and product availability could be displayed on the product details page. This seemed so trivial to me. But one of the stakeholders, who I believed was from the sales department, kept talking about how very important that was for their customers who are other businesses and need to plan.” 

Nifemi calls attention to two aspects of supply chain that remain top of mind for businesses who wish to build trust with customers: stock transparency and effective distribution.

She says, “Stock transparency was crucial for the customer I mentioned earlier. They are a B2B business that manufactures raw materials for the automotive industry, including bearings and high-performance machine tools. Upon researching, I found that bearings are vital components in any vehicle. For instance, a wheel bearing is essential for the proper function of the hub, tire, and wheel assemblies, enabling friction-free movement and rotation of the hub assembly, which in turn ensures smooth tire and wheel rotation.”

As a manufacturer of this vital automotive component, it was important for them to be transparent about their stock levels so that their customers, including major vehicle manufacturers, could better plan. Accurate and timely stock data enable them to make precise forecasts, reduce waste and inefficiencies, and maintain transparency with their end customers, thereby building trust.

The second crucial aspect of inventory management is effective distribution, which can be achieved through stock allocation. Here, Nifemi acquired experience working across several business models and verticals, especially B2B manufacturing.

Nifemi continues, “The rationale was straightforward: the customer, a large distributor of technology products to wholesalers and retailers, needed to ensure their clients could trust them to deliver what they needed when they needed it. As a billion-dollar business, they had previously faced issues with uneven stock distribution. To establish trust, they needed to ensure that stock was allocated fairly and transparently, rather than randomly or conveniently, so that all partners—both distributors and retailers—received their share of stock equitably.”

As customer loyalty guru Chip Bell once said, “Loyal customers don’t just come back; they don’t simply recommend you; they insist that their friends do business with you.” Effective distribution, one of the goals of stock allocation, helps meet customer expectations for speed and reliability. That builds trust, and with trust comes loyalty. 

The flip side of the equation, ineffective distribution, is equally powerful. A prime example of this is the experience of the e-commerce giant Target in Canada. Target’s entry into the Canadian market was marred by severe supply chain issues, including frequent stockouts. These stockouts led to empty shelves, which frustrated customers who were unable to find the products they wanted. This situation damaged Target’s reputation, leading to a loss of customer trust and ultimately contributing to the company’s decision to withdraw from the Canadian market altogether​.

The strategic advantage of supply chain

Effectively managing supply chains is more than a business necessity; it’s a strategic advantage. Businesses that prioritize this area of their business can better forecast demand, reduce inefficiencies, and ultimately foster stronger relationships with their customers. Conversely, neglecting supply chain management can lead to significant operational failures and damage to a company’s reputation, as evidenced by Target’s challenges in Canada. By focusing on efficient supply chain practices, businesses can navigate the complexities of modern commerce and achieve sustainable success. 

Nifemi concludes, “Having worked with Spryker for the past years—first directly with customers and now on the product side—I have witnessed how our platform’s solutions help clients build trust with their customers, ultimately boosting revenue.”

Learn more about how Spryker, in partnership with AWS, helps companies build customer trust, turn volatility into growth, and fortify their competitive edge with solutions for supply chain management.