As every successful business knows, providing the customer with what they want, when they want it and at a competitive price, is a winning formula. The problem is getting the business to do just that – focus on the customer.
Aligning a supply chain to the needs of the customer, rather than the goals of individual silos within the business is difficult to achieve, especially as management within organisations tend to set targets, analyse costs and reward staff in relation to the performance of individual business units or functions. To break down these silos, visibility of costs and performance needs to be applied across the organisation to give a true picture of the Value Chain. But realigning a supply chain to focus on the customer requires more than that, it needs internal collaboration.
Professor Morten T. Hansen of the University of California at Berkeley, writing in a recent issue of The Harvard Business Review, highlighted the point that internal collaboration can backfire if its costs – including delays stemming from turf battles – prove larger than expected. He points out that it is difficult to get people in different units to work together as they may not want to share resources or customers; they resent taking on extra work if it provides little recognition and no financial incentive; or if they have conflicting priorities.
If businesses are to break through the silos and attune their products and services to the customers’ needs, processes – and the metrics that support those processes – have to be aligned across the supply chain to delivering the best value proposition to the customer. If an understanding of the total metrics and targets for the value chain can be determined, then individuals within the chain can be rewarded and hopefully, motivated by a common goal of keeping the customer satisfied.CC