What Can Consumer Data Do for Your Supply Chain?

Published : October 8, 2015

Using Consumer Data For Your Supply Chain

Technology has closed the gap between the supply chain and the customers that it caters to, compelling logistics professionals to revamp their supply chain strategy to a data-friendly one. The numbers produced by customers engaging in purchasing behaviors have given supply chain teams and marketing teams alike a virtual treasure trove of indicators, allowing them to shave off layers of uncertainty and hone their respective strategies. Are you looking to incorporate customer data in your own supply chain planning? There are a few practical strategies that can help you make that first step just a little bit easier.

1. Route Structuring

No matter how far removed your logistics crew may be from the actual customer handoff, customer data can help you plot the fastest and/or most efficient route to make it happen. Even if you simply hand off piles of boxes to a carrier like UPS, front-loading the deliveries with the furthest to go in your shipping systems will give those providers greater lead time, and thus potentially decrease the time between shipping node shifts. Notice that customers ordering overnight delivery are historically more likely to place those orders between 7 and 8 pm? Shift priorities to pick and pack those orders at the beginning of the following work day to get the boxes on an early delivery. Christian Greiser, Libor Kotlik, and Michele Brocca note that even for more complicated, multi-service shipping solutions, data can offer route visualization opportunities that ensure the least amount of shipping dollars are spent to achieve on-time "touchdown." 

2. Self-Feeding Transparency

Customer demands for transparency in purchasing and sourcing have forced companies to communicate more information than ever before with customers, from real-time stock movement to a variety of shipping options. Your logistics strategy can incorporate trends, such as connections between historical ordering windows and shipping methods, or the potential percentage increase in sales during a periodic promotion, to prepare for crests and lulls in effort required. This preparation will touch a number of potential fulfillment budget "pain points," such as overstocking, underscheduling or inefficient ordering before a busy period such as the holiday season. Not only does your implementation on actionable transparency score a win for your customer perception, it ensures a steady flow of useful data to "play with" when formulating supply chain strategy for the coming quarters, according to Entrepreneurial Insights. 

3. Hit Your Replenishment Targets

The "Just-in-Time" model of inventory control is popular, but it also carries a big stock out liability potential if your forecasts fall short. Customer data, from year-over-year down to the granular level of day-of-the-week or even hourly order volume, can help you hit these targets more accurately. In Supply Chain Management Review, Panagiotis Andrianopoulos and Hector Rafael Perez note that companies often get tangled up discussing these targets with vendors, rather than looking to the customer—the ultimate authority of when products will move off warehouse shelves. While supply capabilities are obviously still a vital point of discussion between a business and their supply chain partner, customer data adds a third leg to the table and reinforces stability for efficient ordering over time. Ultimately, this efficiency saves a business budget dollars, ensuring that more capital is free for promotions, R&D, and other holistic brand-supporting ventures.

While the exact data and capture method that works best will depend on your company, its customer audience and its industry, data will always invite scalable accuracy into supply chain strategy. If your company isn't looking closely at data and discussing how to incorporate it into long term planning, you're carrying more of an uncertainty burden than you need to. 

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Topics: Supply Chain Logistics

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