Enhancing customer trust in supply chain

Success in business depends on many things, with customer satisfaction at the top of the list. By improving supply chain operations, businesses are able to enhance customer service and even exceed expectations. Here are some innovative supply chain strategies that will enhance customer trust and improve productivity.

Customers will lean toward companies they can trust during strained times like we’re going through now. To gain trust, companies must show consumers they respect their time and money. Companies need a culture that engages in transparent communication, is open to criticism and can deliver fast and efficient responses. This type of culture allows companies to build customer trust, even in these difficult times.

Forbes

Without a doubt, business survival relies on customer loyalty, and the only way to earn that loyalty is to earn customers’ trust. This means constantly evaluating the links within a supply chain to identify areas of weakness using real-time data, visibility tools, and customer feedback, then proactively seeking solutions to rectify these. It is vital that there is accountability in the supply chain when mistakes are made, and that these errors are addressed internally and externally. Customers understand that mistakes happen, but if they’re swept under the rug, it's only going to create tension and distrust which is detrimental to brand reputation.

What is impeding customer trust in supply chains?

Supply chain transparency requires companies to know what is happening upstream in the supply chain and to communicate this knowledge both internally and externally.

Harvard Business Review

Transparency is ultimately key to establishing customer trust in the supply chain, but the problem is that, traditionally, supply chains were not designed to be transparent. In fact, many businesses have operated with a ‘no comment’ approach as they feared that, by divulging too much information, they not only lose the competitive advantage, but are also exposing themselves to criticism and negative publicity. The reality of doing business in the modern age, with a reliance on real-time technology and increased accessibility, is that the customer wants to be ‘in the know.’ This requires more supply chain transparency and a restoration of customer trust. 

How to gain customer trust in supply chain

There are certain steps that can be taken to achieve customer trust in the supply chain. These are not quick fixes but rather sustainable adaptations in company processes that essentially futureproofs the business. 

1. Set a constructive tone
   From the outset, businesses have to be clear about a willingness to engage with suppliers and customers throughout the supply chain. Rather than finding fault once a mistake is made, clearing the path by setting a tone of transparency and accountability will result in a system based on trust. Businesses can set up scheduled meetings or calls with relevant stakeholders. Through these open channels of communication, there is more strategic risk management and improved customer trust. 
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2. Analyse the risks to the supply chain
   By looking over previous records and performing a thorough risk audit of operations, a business is able to identify any prevalence in challenges that result in a disrupted supply chain and is able to manage risks in supply chain . Challenges such as incorrect labeling or insufficient supply of raw materials can delay operations and leave customers dissatisfied and distrusting. In line with the practice of transparency, it’s vital that customer input is received on efficiency, whether through online reviews, surveys, voice recordings or verbal feedback. 
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3. Create visibility within the supply chain
   This analysis can be taken a step further by looking not only at historical data, but real-time data for predictive analysis. By leveraging technological solutions, supply chain managers enjoy increased visibility throughout the supply chain. Because of this, impending risks to the supply chain are immediately evident. Beyond the risks, such visibility also offers insight into areas of opportunity. 
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4. Make the necessary changes
   Empowered with a complete and detailed overview of the supply chain, a company is able to implement procedures with outlined KPI’s (key performance indicators) in mind. Challenges such as unilateral sourcing of materials, transportation issues, environmental or humanitarian impacts must now be addressed. These changes will require engagement across the supply chain, with the potential for third-party partnerships where necessary.
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5. Communicate the changes made
   Transparency is key as businesses must inform customers of the changes and how they will be beneficial to operations. This builds customer trust by showing that the company is committed to ongoing self-evaluation and is proactive in its approach to dealing with customer concerns.
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6. Plan for any resistance
   No change comes without some form of resistance, but this doesn’t mean the change isn’t a good thing. When looking to build customer’s trust in the supply chain, sustainable solutions require an element of change –this won’t sit well with everyone. Suppliers could be unhappy by an increased demand on time related to administrative duties. However, where the transformation process has been in open consultation with all role players, there’s less likely to be resistance at a later stage. Everybody needs to understand they’re working towards a common goal – satisfied customers.

What are the benefits of improved customer trust in supply chain?

If a consumer is willing to pay more for a sustainably sourced product, a connected, customer-centric supply chain can satisfy that preference while building loyalty through satisfaction and at a higher price point. Improved consumer connectivity can also help an organization identify and understand shifts in consumer preferences to proactively assess the implications and capitalize on emerging opportunities.

Deloitte

A fully functional and transparent supply chain results in improved customer trust. This has several knock-on benefits for business: 

• Regulatory compliance 
• Reduced reputational risk
• A culture of production and openness
• Retention of productive employees
• Attracting skilled employees
• Identifying areas of opportunity
• Increasing productivity

Key takeaways

Researchers at the MIT Sloan School of Management found that consumers may be willing to pay 2% to 10% more for products from companies that provide greater supply chain transparency.

Harvard Business Review 

The significant and, in some cases, unforeseen disruptions to the supply chain in the past two years have forced businesses to re-evaluate operations or risk closing. While there might be those that aren’t willing to perform thorough risk management, the chances are they’ll be lagging behind competitors when the next supply chain disruption occurs. 

Without establishing customer trust, a supply chain is doomed to fail as customers are more likely to turn to businesses that are honest about their operations and have implemented transparent business practices. By incorporating the latest technologies, businesses are able to drastically increase supply chain visibility to identify what works and what doesn’t. This customer-centric approach will continue to build customer trust, but does require ongoing analysis and adaptation where necessary.