As organizations position themselves to better navigate future disruptions, OnProcess CEO Oliver Lemanski sees four significant benefits for digitizing the service supply chain.
As the Ever Given jammed the Suez Canal, disruption rippled across the supply chain and cargo owners scrambled to determine whether their goods were trapped in one of the containers. Shippers and receivers found it challenging to come up with an authoritative answer.
Unfortunately, the fragmented nature of supply chain data isn’t transparent until the flow of goods and information grinds to a halt. All too often, supply chain and service functions operate in data silos. Information is kept in spreadsheets or outdated or homebuilt systems that don’t talk to each other. A surprising amount of global shipping information still relies on phone calls, emails and faxes. These silos of static information make it difficult for companies to navigate supply chain disruptions and crises that arise regularly.
The opportunities for digitalization are significant as the average supply chain has a digitization level of 43%, according to a recent McKinsey study. That research also calculated that companies that aggressively digitize their post-sale service supply chain boost efficiency 60% to 70% (the largest increase from digitization anywhere in the supply chain).
Digitizing processes is the only way to embrace the challenges and position your organization for growth. Digitizing doesn’t mean shifting from email to Excel or a simple database. It requires rethinking how business gets done in the organization. If you don’t examine your processes and rebuild them for the digital environment, you may wind up simply doing the wrong things faster.
While previous digitization efforts may have focused on sales channels, digitizing the post-sale service supply chain is critical. Sure, making it easier for customers to order through ecommerce and other channels drives revenue. But for long-term impact, digitizing the post-sale service supply chain allows you to better plan, source, collaborate, execute, automate and generate analytics. With a holistic view, your organization can ensure the product is efficiently managed and that the customer receives the best service experience in the process.
The Ever Given situation and ongoing port congestion around the globe highlight the need for transparency and visibility in the service supply chain. Traditional supply chains consist of a series of one-way steps that don’t anticipate the need for reverse logistics. The boom in ecommerce in both B2C and B2B channels results in an upstream flow of returns for repair, servicing, replacement or recycling.
The service supply chain requires the logistics infrastructure to manage additional complexity while both providing efficient customer service and maintaining inventory levels.
Without digitization, orchestrating a circular supply chain in which manufacturers and sellers order, consume, return and refurbish used parts to slash costs and waste, and improve service is nearly impossible.
As organizations position themselves to better navigate future disruptions, we see four significant benefits for digitizing the service supply chain.
Customers value real-time updates with personalized information reflecting their communications preferences. Waiting days to provide customer information or pinpoint where in-transit inventory is located is no longer good enough.
Real-time tracking information is the foundation. Digital solutions are available to integrate the entire service supply chain into a single platform and automatically capture and blend parts data, customer data and analytics data across the post-sale service lifecycle for proactive decision-making and customer communication.
90% of an organization’s environmental impact comes from its supply chain. Instead of operating with the traditional linear “throw-away” supply chain model, companies can embrace the circular economy model.
This model prioritizes reusability by keeping materials within the supply chain by re-purposing rather than buying new materials all the time. Digital technologies can efficiently predict when assets need recovering, when repairs are imminent as well as streamlining the complex dataflows and logistics between the processes.
A digital platform can integrate with almost any application or data source to give customers a holistic view of the parts recovery cycle. The resulting intelligence supports the circular service supply chain by reducing unnecessary transportation costs and intelligently redirecting recovered parts based on demand, value and reusability.
Resilient supply chains are those that can bend but not break, and snap back into place (perhaps more robust than before). With improved visibility across the network, your organization is prepared for continuous rebalancing and optimization. Your circular supply chain can flex as required.
The Business Case for Digitalization
Building the organization’s fortitude for a digitalization effort may prove challenging, especially if previous efforts failed to meet expectations. Analyze your existing after-sale supply chain to understand the direct and substantial impact on customer service, sustainability outcomes and the bottom line. The opportunities may be more significant than you know.
Supported by your analysis, you can make the business case for digitalization efforts that align with the organization’s long-term business priorities, like growth, talent retention and sustainability goals.
Digitalizing the after-sales service supply chain enables organizations to recover value from inventory and provide new digital services for a better customer experience. With real-time information flowing to the right people at the right time, your teams can recover product faster, make better decisions, optimize operations, improve warranty recovery, reduce costs and emissions, and significantly improve customer satisfaction.
Your organization can empower your circular service supply chain and place sustainability and customer lifetime value at the heart of the everything-as-a-service economy we live in today.