Capgemini survey finds supply chains are far from perfect when it comes to keeping customers happy
December 03, 2013
Even though supply chain professionals pride themselves on providing exemplary service and execution during this time of year in advance of the holiday season, a survey recently released by Capgemini found that there are myriad issues when it comes to keeping customers content with delivery and ordering processes.
Entitled the “Supply Chain Impact,” the survey was commissioned by Capgemini and conducted online by KRC Research. It polled 1,000 consumers and 150 United States-based senior supply chain managers at retail, consumer products, and distribution companies with at least $1 billion in global revenue.
Given the heightened demand for perfect order delivery and always-available inventory—during the holiday season—83 percent of the survey’s supply chain respondents indicated that it is challenging to adequately plan for supply chain capacity to address peak requirements for timely fluctuations in demand, with only 21 percent noting their systems do an excellent job of providing accurate real time insights into supply chain performance.
Kavitha Krishnarao, Capgemini Director, Supply Chain Services, said that holiday season activity can place a heightened emphasis on supply chain operations, which is expected and requires advanced planning. But at the same time, she noted that alone is often not enough, considering that 31 percent of supply chain respondents said the top executives at their respective companies have little concern about supply chain-related issues impacting revenue or profitability during the holiday shopping season. And 80 percent indicated that consumer expectations for on–time delivery of ordered products has gone up in the last five years.
The survey also found that 86 percent of supply chain respondents cited having the right processes that can respond to volatile consumer demand in real time as a major challenge in maintaining seamless supply chain operations.
“Demand planning is a key process in this respect, especially during the holiday season,” said Krishnarao. “This is evident when it comes to things like stock-outs for the most popular items people are buying. Another factor has to do with back end processes relating to the supply chain in terms of how facilities and warehouses are set up and able to respond to things like stock outs. Design processes, warehouse processes and existing demand planning…are important in providing on-time, consistent service.”
Out-of-stock and order fulfillment issues can severely impact consumer behavior in negative ways for the supply chain, according to the survey, including:
-89 percent of U.S. consumers said they are likely to shop with another retailer in the future if an item is delivered late;
-73 percent said they would purchase from a different store than originally intended if they were unable to find an item they wanted in stock this holiday season, and 29 percent would not purchase the item at all; and
-54 percent of supply chain respondents say supply chain issues have had a negative impact on company revenue or profitability in recent years
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