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What should you do when your differentiated agile offering stops delivering business benefits?
FMCG companies at the leading edge are improving their flexibility and responsiveness for better customer service. It comes in particularly handy when your primary customer requests for an urgent delivery.
Stockouts in retail chains are quite common, especially for perishable items with a short shelf life. In such cases, they would request the brand owners for an urgent delivery. Whichever company agrees to supply immediately, without waiting for the scheduled days, gets the entire incremental demand. Retailers even agree to pay the delivery fee for such an urgent consignment.
If your company has improved its supply chain in terms of flexibility and responsiveness, you are likely to benefit the most. Sales would accelerate, profits would jump and you would become the preferred supplier.
What if these urgent orders stop coming? Does it mean that the retailer’s ordering mechanism has improved significantly? Would you even notice the absence of this important signal? What could be the reason and how should you handle it?
A probable cause is your competitor matching your flexible offering and even bettering it. What if he has agreed to deliver the products without charging the delivery fee?
The key here is to notice the sudden absence of such signals and take timely corrective actions. Since these are exception signals, many companies fail to notice their absence and suffer.