How are our customers driving change in the supply chain?

Deanna Lomas, Director of Supply Chain at Telstra discusses the impact of the evolution of customer needs on the Supply Chain.

As a leader of a team providing centralised functional support, I am constantly challenged to ensure the team remains relevant to our internal stakeholders and customers.

At Telstra we operate in a matrix environment, where functional centres of excellence work across the lines of business to enable outcomes for our customers.  In this structural model relevance is imperative, and this requires us to be agile and innovative. We also recognise that we are directly contributing to driving customer advocacy through differentiated supply chain capability that our customers now demand. This is a mindset shift for both myself and the team, as we have historically designed our supply chain on the basis of standardised, high volume, low touch, and point-to-point movements optimised to suit our operational efficiencies. We now need to drive our decisions based on the customer experience.

Consumer-facing Supply Chains, particularly in the last few years, have been grappling with an evolution as customer needs drive both our commercial and operational structures.

We’re shifting from our historical “back office”, high volume, low external visibility operating model to personalised fully transparent, niche solutions.

It is difficult to design and implement a model when constrained with disconnections between organisation structures and accountabilities, and the systems and processes that underpin the business.  Many companies are still working through this challenge and its implications for our people, infrastructure footprints and delivery options for the “last mile” to customer.

At Telstra, we are currently working through a strategic review to identify the implications for our business of this emerging customer control of our supply chain.  This will mean we will need different supply chain capability in future and we will need to work with our strategic partners to enable agility in our people, processes and systems to meet the variety of customer needs. Consumer control of the supply chain also has the potential to bring commercial value: the total cost to serve can be optimised by allowing the customer to opt for the cost profile and service that matches their needs, including paying a premium for niche services.  If the integrated supply chain experience is positive for the customer, this can also bring value through top line growth as customers choose to do business with you.

The increasing customer “control” of the supply chain also has implications for the capability and skill profile of supply chain professionals in the future.  I have recently redeployed resources within the Telstra team so they are dedicated to developing strategic solutions that enhance our customer delivery experience. This includes developing a deep understanding of our processes, and leveraging our own technology and digital capability to design integrated systems that will create a differentiated experienced for our customers.   Supply chain professionals supporting consumer facing businesses will need to have skills to lead and contribute to customer experience mapping, and to apply design thinking methodologies to the operational processes and systems that underpin the supply chain.

I encourage you to read the “The Personal Supply Chain” paper recently published by Telstra’s Gareth Jude (Retail Industry Executive) and Charlie Macdonald (Supply Chain Industry Executive), which outlines how connected customers want more from the supply chain. This research paper looks at the potential of the “Personal Supply Chain” to transform the relationships that retailers, manufacturers and transport organisations have with their consumers, and how his new value network can create benefits for all.

Deanna Lomas

Director of Supply Chain, Telstra