Relationship Management in Supply Chain

Jonathan Ong July 30, 20193 mins read

Global supply chain and procurement is a constantly evolving industry that requires companies to be adaptive to remain competitive.

Shorter life cycles of products, globalisation of supply chain processes and the complexity of red tape in logistics across borders are among some of the factors to why the industry remains dynamic. 

But what can companies do to actually remain competitive? Sometime ago, the Global Supply Chain Institute at the University of Tennessee released a list of 10 game-changing trends in supply chain – one of it is the need for the shift from customer service processes to customer relationship management. This means that companies should not strive to provide equal service to existing customers, but instead engages in customer prioritisation, maximising limited resources and caters services based on individual customers’ demands and needs. Here are a few advantages that companies can experience when shifting to customer relationship management:

1. Finding out what is valued by customers

The reality is that not all customers are the same – some may see delivery processes as a key indicator of performance while others may value lower costs (meaning average or lower delivery support levels). Through relationship management, companies are able to pinpoint the exact needs of their customers, ensuring optimal allocation of resources.

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2. Becoming a partner in customer’s business

The aim of the relationship management route is to ultimately build a strong relationship with customers. Providing high quality, differentiated service has the potential for customers to view you as an integral member of their business. Building that rapport also opens up opportunities to work together with customers to find solutions to improve processes such that both parties can improve productivity. Also, building a strong, stable relationship between the company and customer offers opportunities in the long run. Companies would be able to conduct long term planning when servicing the customer – identify long-term requirements and expectations.

3. Strategic advantages

In attempting to provide differentiated service to existing customers, the companies would be required to employ multiple supply chain permutations. This allows the companies to then gather information and analyse the best fit to their organisation goals and capacities. Management then must make the decision on where to compete and where not to compete based on the company’s strengths and customer needs and desires. In the long run, the company would be able to make strategic decisions that would greatly enhance its profitability and productivity.

So far I’ve given a short description of how a shift from customer service to customer relationship management in supply chain can ensure the sustainability of the company in the dynamic market. Increasingly, companies are looking to hire individuals who are able to oversee this transition and develop relationships with customers. If you would like to explore the current opportunities in the market, do reach out to me!

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Jonathan Ong - R1985488's picture
Senior Consultant | Supply Chain & Procurement
jong@morganmckinley.com.sg

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