Behind every experience is a robust supply chain

As events go, things don’t get much bigger than the infamous Glastonbury Festival. Given that over 200,000 people attended this year alone, Glastonbury is a real success story. However, the popularity of Worthy Farm and lucky artists that get to play there is no happy accident: this event takes years of diligent planning!

From the beer sold in the vast variety of pop-up bars to the nuts & bolts that hold together the stages on which artists entertain their audience, music festivals are a meeting point where literally thousands of supply chains collide. In order to ensure that everyone enjoys a truly magical time, every element has to come together. After all, imagine how a shortage of beer or burgers would affect your festival experience: you would certainly think twice about going again!

When it comes to meeting customer expectations, businesses are no different: everything has to be in the right place at the right time. However, unlike festivals such as Glastonbury which occur only once every year (unless it’s a fallow year of course), businesses must be able to consistently meet customer demand on a day to day basis. So, what can you do to ensure that your organisation is able to provide customers with a Glastonbury standard of service?

Customer experience is all about service levels

In a perfect world, you would be able to satisfy the demand of your customers 100% of the time. However, in reality, this simply is not achievable. After all, there are always financial constraints in place which mean that a decision has to be made as for where the resources that are available should be focused.

In the same way that the organisers of Glastonbury may prioritise the availability of beer over the availability of gin & tonic, businesses too must determine an appropriate service level strategy.

Sounding out suitable service levels

When trying to adopt appropriate service levels, the criteria required to make this decision can often be unclear. Consequently, service level targets are often set as a given figure based on little more than a quick and vague analysis. To add further difficulty, service levels are difficult to measure as the impact can only be realised after a certain amount of time.

In many cases, it is only when an inappropriate service level has an adverse effect on the business, such as excessively inflating safety stock or leaving the business with insufficient inventory levels to satisfy a big customer order, that these are reviewed and adjusted. Put simply, in many organisations, service levels are often wrongly adopted in the first place and then not reviewed regularly enough.

Margin boost: Music to everyone’s ears

When describing a service level in its purest form, you are describing your company’s goal. It is a translation of your business strategy to your inventory strategy: you are deciding to what extent you want to satisfy your customer’s needs based on your stock capacity.

Although overall availability is seen as one of the key performance indicators when it comes to inventory management, supply chain managers have to draw a line somewhere. Through finding the balance between investment in inventory and service levels, businesses can adopt a more proactive approach to managing every element of their operation. This, in turn, can help businesses maximise sales opportunities, minimise supply chain costs and thus, boost margins.