The Role of Logistics In Building Customer-Centric Supply Chains

61 percent of supply chain and logistics professionals believe that customer experience will overtake cost as the top differentiator in their industry over the next five years.
The Role of Logistics In Building Customer-Centric Supply Chains

Remember the Pony Express? We will not blame you if you do not. It was back in the 1860s when mail was transported using horses. The process included rider relays across 200 stations along a particular route. At each station, a rider would switch load and this went on for a stretch of 3,000 plus kilometers. In other words, delivering mail from Nebraska to California would take almost eight days. But back in the day, Pony Express happened to be faster than your regular mail service that took 25 days owing to lazy stagecoaches. 

The Not So Customer-Centric Logistics

Well, that was then. Logistics as a critical supply chain function evolved over the following decades. Having said that, the evolution was not customer-driven. Hence, for the longest time, logistics was considered to be a cost center and not a business enabler.

It's true that gradually distribution networks became stronger, allowing retail and FMCG businesses to push their products to offline stores and regional centers faster. This increased their reach and even drove better sales, but the true potential of logistics was far from being realized. Why? Simply because businesses were selling products that they thought customers should buy. 

On the other hand, customers had minimal means to put forward their demands on what they want and how they wish to purchase. This gap kept growing until rapid technology advancements drastically increased the discovery, access, and visibility of the product. The evolution of smart devices and quick internet penetration across the globe empowered customers. Today, customers decide what they want to buy, when they want to buy, and how they want to buy.

The Importance of a Customer-First Approach

This revolution triggered waves of transformations in how businesses manage their supply chain and logistics operations. Traditional delivery processes became redundant. Legacy systems were not able to respond to growing home delivery demands and ensure fast and on-time deliveries. Traditional 3PL management strategies gradually became inefficient as they failed to cope up with rapidly changing customer and business needs. Hence, the need for businesses to revamp their existing IT architecture to build robust, scalable, and intelligent logistics processes became imminent.

Modern customers want to know where their packages are at any given point in time. They want to know the exact ETA of their parcels, who will deliver it and why there are delays. Well, these are basic demands now. Customers would love to change their delivery location and time based on their convenience. They want contactless deliveries and seamless returns processes, that too at zero costs. They demand to know how hygienically a delivery is being managed, the body temperature of a driver or a store executive, etc.  

Today, 41 percent of consumers are willing to pay a charge for same-day delivery, while nearly a quarter (24 percent) of shoppers said they would pay more to receive packages within a one-or two-hour window of their choosing. Customer expectations are already sky-rocketing, making supply chain experts rethink their traditional approaches towards managing logistics. 

According to research, 61 percent of supply chain and logistics professionals believe that customer experience will overtake cost as the top differentiator in their industry over the next five years.

Logistics As A Business Enabler

In a world that is becoming increasingly virtual, logistics still remains one of the vital physical touchpoints that connect a brand with its customers. Hence, businesses must perceive logistics as a tool to craft delightful customer experiences, boost loyalty and be more profitable. We saw the challenge of scaling deliveries to new heights during pandemic-led lockdowns. The logistics industry kept the business engines revving and running, with same-day and one-hour deliveries of essentials. 

Digitizing logistics operations enables businesses to shrink delivery time, generate accurate ETAs, optimize routes in real-time, ensure flexible delivery models, boost delivery productivity and enhance customer transparency. All these elements put together empower logistics stakeholders to provide delightful delivery experiences.

Be it B2B or B2C; businesses nowadays are known and reviewed for their timely/delayed deliveries, which decide their future business prospects with customers. The future holds more for the logistics industry within the supply chain as retail giants and tech behemoths partner to meet business requirements. More technologies are set to overtake and will revolutionize the mode and speed of how consumers receive products.

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