The pressure to develop a customer-centric supply chain has been growing for years, a timeline that was drastically accelerated by the global COVID-19 pandemic. As a result, companies across industries have begun to reorient their supply chains in response to new customer demands. Now and in a post-pandemic world, people expect proactive customized recommendations for items to purchase, the ability to monitor their orders with real-time status, and “fit-for-purpose” fulfillment options. Companies that fall behind on these new needs will be dominated by their competitors.

Consider the following stats:

• 90% of customers track the status of their online orders.
• 81% of customers today are unwilling to pay more than $5 for same-day delivery.
• 27% of customers abandoned or cancelled an order because same-day delivery wasn’t available.

The customer experience is now what sets companies apart, whereas historically there was a focus on the product as the sole driver of value. By allowing for an agile supply chain that enriches the customer experience and enables new ways of fulfilling customer demands, businesses can set themselves up for success by putting customers at the forefront of their business model.

That’s where supply-chain evolution is vitally important. It allows companies to align with the current business demands and alleviate the strain that these increased customer expectations, and experiences, are creating for them.

By placing an emphasis on segmented supply-chain models, businesses can move away from supply-chain designs that were focused on product volume at the lowest cost, and refocus on providing the right service to achieve the segmented strategic goals of the business across the entirety of the customer base.

This new model should in turn foster and strengthen the loyalty that businesses are looking to derive from their existing customers, and motivate them to attract new ones, all while keeping a pulse on operational costs and maintaining margins. To achieve these results, certain business areas need to be examined and changed.

The Challenges of Fragmented Planning

In most companies, planning is fragmented and siloed across sales, marketing, finance, and supply-chain functions. Lack of synergy and visibility into other workstreams often leads to negative outcomes that can undermine overall company performance.

For example, when communication between departments fails, there can be too little supply to meet the actual demand, which means stockouts, delayed orders, and possibly lost sales. Conversely, too much supply translates into high inventory costs and waste.

The fundamental challenge of balancing supply and demand has existed since the beginning of the supply chain, and processes and technologies have continued to evolve to help solve it. The difference today is threefold:

• Companies now have access to vast amounts of data, such as consumer trends, demographics, channels, customers, inventory and supply across the extended supply chain.
• Huge advances have been made in analytics capabilities, including machine learning and artificial intelligence, making it possible to use this data to generate valuable insights in ways never before possible.
• Powerful new tools are now available that help companies gain visibility into their operations, continuously plan for a wide range of scenarios through use of a digital twin, and automate manual and time-consuming activities.

The Building Blocks of Customer-Centric Planning

Planning plays a vital role in a company’s ability to meet customer needs. To infuse greater customer centricity into this important process, companies need to transform how they approach it, not just by bringing together the fragmented, independent pockets of capabilities, but also by marrying long-term strategic planning with shorter-horizon operational planning and execution.

This evolution is marked by four key characteristics:

• Micro-segmentation. It all starts with creating different segments involving specific combinations of customer, sales channel (e.g., retail or wholesale, physical store or online), product or SKU, and geographic markets. Each of these micro-segments will have distinct needs, buying behaviors, and product and channel preferences, which a company must consider during planning.
• Technical and data architecture. Cloud-based, A.I.-powered integrated planning capabilities — a “cognitive brain layer” — will sit at the center of planning, connecting information from disparate planning solutions and enterprise transactional systems. This allows for the seamless exchange of data across functions and the entire supply chain. In the end, companies are able to ingest and integrate a wide range of internal data sitting in legacy solutions and enterprise resource planning (ERP) systems.
• Centralized and autonomous operating model. While the technology and data infrastructure evolve to provide “access from anywhere” within or even across companies, we’ll see the rise of more centralized planning operating models. At the same time, planning becomes increasingly automated. As companies can codify more of the decisions that planners make, machines will increasingly make those decisions in addition to handling routine tasks.
• A “living plan.” In the future, plans and their targets will be dynamic, not static. They’ll be “living” — updated continuously and in real time, and based on the steady stream of intelligence the cognitive layer gains about what’s happening in every node of the supply chain. This will enable businesses to continually optimize plans to reflect demand and supply at every moment, and give customers exactly what they want, when, how, and where they want it, and at the right cost to the company.

The Road to the Future

The future of planning is bright, and with it comes compelling opportunities for companies to reshape how they define and deliver on their promise to infuse deep customer centricity in everything they do. But getting to this future won’t be quick or easy. For any company looking to head down this path, the first step is defining the “north star”: What does the company want planning to look like five years from now?

A clear vision is critical to subsequently establishing the right technical and data architecture. From there, companies need to identifying the impacts on how planning is organized, the skills it requires, and the processes that guide its work.

The vision also helps companies prioritize and sequence the planning use cases they will execute over time to make the transition from tentative ideas today to what’s possible tomorrow. Evolving toward this north star vision will also require innovation capability with the right functional and technical skills, infrastructure, leadership and funding support, to realize the vision of foundational change.

With intensifying pressure across industries for the supply chain to become more customer-centric to help drive growth, the question supply-chain leaders face isn’t whether they need to change how they plan. It’s how they transform planning, and how quickly they solve the age-old problem that has bedeviled the supply chain for decades: optimally balancing supply and demand.

Leaders have the data and the tools to do it. Now, they need to act.

Mohammed Hajibashi, Frank Meuwissen and Prashant Sanghvi are managing directors of supply chain operations with Accenture.