Global Supply Chain Management – The Advantages of Segmenting Customers

Last week I talked about how a business can ‘de-risk’ it’s processes, which followed on from a discussion on establishing and maintaining a business continuity plan.

Both articles were primarily about how supply chain organisations can insulate their businesses in the event of another significant disruption. 

If you’ve established your BCP and examined which processes need attention to ensure their continuity, you’re in an excellent place to start looking towards what comes next.

An excellent place for any business working along a supply chain is the ability to segment. Be that by customers, suppliers, markets, and products as just a few examples. 

There’s no one-size-fits-all approach in global supply chain management, even within a single business. Complexity can be found at many different levels. Global supply chains have to contend with managing thousands of SKUs for thousands of customers, in different territories, across multiple channels from hundreds of manufacturing locations, each with varying models of distribution. And I am only just scratching the surface. 

When you add in resourcing, technical debt, shifting customer expectations, and the reality of moving goods from A to B supply chain process management can quickly add up to extreme complexity. 

OmPrompt is in the business of embracing complexity.

While our core functionality is the automation and standardisation of order management in customer and supplier facing processes, this cannot exist appropriately without effective supply chain segmentation. Or rather, the job is made much harder. 

This is why our cloud platform enables clients to execute their supply chain segmentation strategy.

A what?

A customer segmentation strategy enhances alternate, specific processes for different needs or outcomes to serve a diverse and growing customer base with a range of offerings. 

Segmentation allows for better control of fulfilment efforts, service offerings, and goes a long way towards eliminating waste, inefficiencies, and costs. Indeed, segmentation can be leveraged so that supply chain organisations can scale, differentiate, and become value drivers. 

The strategy will be influenced by who you trade with, where, and how. Supply chain capabilities, growth objectives, customer needs, including OTIF performance and evolving B2B customer experiences, are all powerful forces which shape the strategy. 

The digital maturity of the customer needs to factor into our thinking. Some may be digitally advanced in all elements of their procurement, fulfilment, and accounts payable processes. They may be developed in some parts but far less in others, or they are just not digitally mature at all. Some may trade via EDI for core transactions and manually for the others (PDFs, XLS, Email, etc.); some may be using B2B e-commerce solutions or are at least ideal candidates for self-service.

Each customer wants to transact in their preferred way. They want access to different products, pricing, and promotions, which will have specific service requirements, and for the supplier, each customer will have differing commercial and strategic value.

Powerhouse retailers with online and bricks and mortar offerings, mid-market retailers, wholesalers, traditional trade channels, and distributors (not technically customers) all need to be managed differently. 

So, how does one execute this sort of strategy?

Team up with technology

On a global scale, facilitating and governing each customer segment is an enormous task without technology. Particularly when it comes to transacting. Yes, the ERP is at the heart of most supply chain organisations but being able to implement all the appropriate control mechanisms quickly and with agility is not that common when relying on the ERP alone.   

  • Are you able to digitise, automate, and see all transactions from all customers and ensure they are right before the ERP processes them? That includes EDI transactions, manual orders, and B2B ecommerce.  
  • Can you configure and automatically enforce process rules by segment and even customers that help the supply chain maximise profitability, service performance, and prevent revenue leakage? For example, at scale, ensuring each order is validated before it is accepted and if it is not compliant for any reason, the exceptions are identified and managed.
  • Can you optimise the customer experience so that different customers receive different status updates and documentation related to the fulfilment of their orders automatically at the right time?
  • And how can you make sure that you react and respond to fulfilment issues and invoice disputes in a way that is optimised to give you the best chance of resolving successfully, in your favour and improving DSO performance?

Cloud automation tools integrated into your teams, processes, and technology stacks answer these questions. These should be more than traditional point solutions or on-premise offerings. Instead, they should have vertically integrated offerings that work seamlessly with ERP applications and are easy to use by frontline teams. They allow companies to configure and execute their service offering for customers large and small.

Begin with sharing an end to end process visual of your current supply chain setup, something like below:

Global Supply Chain Management - The Advantages of Segmenting Customers

Monitor and refine new adjustments 

Introducing a new segmentation strategy is a continually evolving process, not a one-and-done. Introduce gradual process changes, monitor their impact, and improve or remove accordingly. Perhaps start small, isolating a market or group of customers such as moving manual customers to a B2B ecommerce solution like OmPrompt’s SelfServe.

You should decide on the experience you want to offer your customers with the understanding of the process you want to facilitate and find solutions that will allow you to do so while being willing and able to tweak your supply chain strategy when different options become available. Pick a few achievable goals first, then use your flowchart to monitor and evaluate how these changes impact you.

So, assess these numbers incrementally and compare them with what’s come before. 

Begin today 

Don’t wait until your next financial quarter or year to implement a customer segmentation strategy or improve your existing one. The COVID-19 experience has shown us the need to optimise working capital. Remote working has put pressure on traditional process design and highlighted the case for digitisation. Additionally, the move to B2B ecommerce has accelerated, and digital trading platforms will become more entrenched for many customers. 

An order management solution can help alleviate common pain points experienced when disjointed and manual processes are in place.

Combining proper segmentation with the right order management solution can mean thousands of hours saved a year, improved OTIF and DSO performance, and improved communications and relationships with customers. Just like it did for Asahi.

Next week I’ll be taking a look at EDI and non-EDI sales order automation, which, after supply chain segmentation, the latest in our series of articles in supercharging your supply chain management post-COVID-19. Make sure you’re subscribed below to receive articles like this and more in your inbox each week. 

 About OmPrompt

OmPrompt’s fully managed order management platform makes it easy for companies around the world to trade with each other. The cloud platform connects manufacturers and retailers via EDI to their customers, suppliers, and third-party providers and automates the processing of the other manual documents in order capture, creation, fulfilment and settlement processes.

With one platform, businesses can connect to any trading partner, digitise any document, and process any format. Clients can achieve end-to-end visibility, focus on their core operations, and quickly see the benefits of automation.

.

Subscribe to the blog for more supply chain management insights!

Related insights

OmPrompt continues to grow our Sales Order Automation and RPA Retailer Portal capabilities with major CPG supplier Mizkan.

OmPrompt joins forces with Mizkan

OmPrompt is proud to announce another significant CPG supplier – Mizkan, famous for sushi seasonings, vinegars and brands like Branston, Sarson’s and Haywards, has chosen

OmPrompt | de-risk your processes

5 Ways to De-Risk Your Processes

Last week we examined the importance of a refreshed business continuity plan, why it’s essential to take a new look at the roles and responsibilities