CX is top driver of supply chain technology innovation

Logistics management software firm BluJay finds customer experience is top of the totem for supply-chain professionals.
10 September 2019

Making things easier is a priority for LSPs. Source: Shutterstock

Given that it can be the pivotal difference between driving a healthy profit for an organization, or bleeding it dry, it would be safe to assume cost-saving would be the top priority when it comes to investing in and innovating supply chain technology.

But, according to research commissioned by BluJay Solutions in partnership with the Council of Supply Chain Management Professionals (CSCMP), that’s just not the case. According to more than 400 supply-chain professionals from across manufacturing, retail and logistics service providers (LSPs), impact on customer experience (CX) comes first.  

“One of the important concepts revealed by the research is that successful companies show by their priorities that they focus on the end result first – in this case, the customer experience,” said David Landau, Chief Product Officer, BluJay Solutions.

Results-orientated supply chains

As opposed to starting with a “trendy technology” (blockchain springs to mind, for example), and figuring out ways to use it, the report suggests leading LSPs are having better success with a “results-oriented” approach. 

“[…] that is, starting with an end goal of what to accomplish, then figuring out the how,” said Landau. 

“Companies leading in performance and technology adoption show an emphasis on capabilities that deliver tangible benefits to the customer.”

The marginal nature of the supply-chain— where optimization is vital to derive any kind of profit— is likely the reason why LSPs aren’t willing to take bets on technology that’s not fully proven and doesn’t instantly benefit their hard-won, cash-strapped customers at a practical level. 

That’s especially true as the LSP market becomes more crowded and competitive, with new solutions offering customer service and support round the clock, visibility, simple integration, and intuitive interfaces. 

Overall, 61 percent of respondents ‘agreed’ or ‘strongly agreed’ that CX will overtake prices and product as the number-one brand differentiator in the next five years. CX overtook cost reduction as the main driver for supply chain technology innovation for nearly a third (30 percent) of respondents. 

There was a notable difference, however, between the importance that large and small companies place on CX. 

More large companies (31 percent) ‘disagreed’ or ‘strongly disagreed’ that CX will become the number one brand differentiator over the next five years when compared with smaller companies (18 percent). 

The data may indicate that smaller companies view CX as a more effective way to compete against their larger peers rather than trying to contend on price alone.

BluJay’s report also found respondents ranked business intelligence & analytics as a top supply chain technology investment, followed closely by visibility (21 percent)— one of the “hottest areas for shippers and LSPs today”— and transportation (16 percent). 

“We commissioned this research in 2018 to explore the impact of CX in the supply chain industry, with a hypothesis that technology adoption, investment drivers, and financial success were becoming more connected,” said Patrick Maley, BluJay’s Chief Marketing Officer. 

“The second annual survey goes further to suggest that CX is not only a key driver but also that being successful in this focus requires seamless partner connectivity and data quality to deliver value efficiently.”