18 November 2022

When disruption hits – how do you hold on to your customers?

Supply chain resilience will be a major focus both on the part of retailers and of government since 2020. The just in time model is under scrutiny, with the pandemic serving as a turning point likely to open up a new era of adaptability, as players in manufacturing and logistics talk through solutions such as reshoring and diversification. We’ll discuss how as a design and branding agency, we support brands’ endeavors to make their supply chains more resilient, and ensure that as a partner we are part of a streamlined to-market solution that reflects the new agility and responsiveness brands are looking to demonstrate.

Retailers are no stranger to disruption. They’ve weathered the impact of crises before – from natural and man-made disasters, such as earthquakes or terrorist attacks affecting global supply, to intentional disruptions such as strikes, as well as previous viral outbreaks such as the animal epidemic of Foot & Mouth Disease. What has truly tested businesses over the past couple of years has been the steady succession of problems: the effects of Brexit and a geopolitical trend towards nationalization, a global pandemic, the escalation of war between Russia and Ukraine. A perfect storm.

Disruption impacts profitability. Being able to bounce back from low-impact disruption is one thing – when disruption becomes the modus operandi, it prompts a reimagining of ‘how we do things here’ to create long-term resilience. One such area under scrutiny is the ‘just in time’ (JIT) model. When a supply chain is robust, just in time creates efficiencies. But the supply chain has been anything but robust.

What businesses are seeking now, and as a model for the future, is resilience. The needle has moved from the efficiencies of just-in-time towards resilience as the space for competitive advantage. Lessons have been learned: an agile response puts businesses in the best place to respond and to maintain trust with its consumers.

So, how are businesses looking to create agility and resilience? Here are four options on the C-Suite table:

Option 1: Build an attitude of preparedness. We’ve heard the saying: ‘fail to plan, plan to fail”. The attitude towards disruption preparedness has changed – possibly seen as a low probability and low priority task before, allocating resources to both planning for and monitoring risk is a shift. Preparedness looks like developing greater visibility of the whole supply chain, not just retail suppliers but those further down the chain. Which parts of the supply chain are most critical? Where is there most risk? What scenarios can we test?

Option 2: Spread the risk: Lost suppliers are lost revenue. In his book The Resilient Enterprise, Yossi Sheffi advises creating a little ‘redundancy’ in the supply chain. That looks like holding a little extra inventory, or multisourcing, or under-utilization of some capacity. Yes, they’re less efficient than the JIT model but it mitigates some risk of future disruption.

Option 3: Reimagining of the supply network: A post-Brexit survey of manufacturing businesses by industry body Make UK found that 33% suggested they were intending to switch to British rather than international suppliers, and around 31% were planning to relocate some of their production to the UK. It also feeds into the obligation – morally and legislatively – to cut carbon emissions.

Option 4: Collaborative working: The most agile solutions rely on insight and knowledge; that relies on a culture of collaboration: of working with external networks (manufacturers, suppliers, logistics), as well as the internal network, to empower individuals to identify risk and monitor for disruption, to reduce inefficiencies and to seek solutions. Forewarned is forearmed, as they say. It allows businesses to reallocate quickly – their people, production and processes – and gain the advantage.

As a design and branding agency working with many retailers and brand owners who are facing into these same considerations, we identify the one priority area where Equator can support and partner in their efforts for a more resilient supply chain.

We speak for the consumer.

With understanding of the challenges retailers are facing behind the scenes, we’ll champion the voice of the customer. According to PWC’s Future of Customer Experience report, 32% of customers would leave a brand after just one bad experience. Even when they love your brand, 59% will walk away after two bad experiences. The customer voice matters.

A business that has resiliency built into its culture wins. But with a lot of focus on the supply side, we’re here to ensure we’re speaking to consumers effectively through great branding and design.

Most importantly, we’re creating a dialogue – with our client partners, with consumers, and with one eye on the macro trends. It leads us to work collaboratively with retailers at every stage of the process – ensuring we too work in an agile way to deliver a growing requirement for a streamlined, efficient and sustainable means to get to the market.

Want to understand more about how to overcome such challenges? Come and talk to us.

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