Chapter 11: Customer Valueand Supply ChainManagement11-1
11-1 Chapter 11: Customer Value and Supply Chain Management
11.1IntroductionEvolution of quality definition from internal measures tocustomer valuePromotes a broader look ata company's offerings anditscustomersQuestions/lssues:Whycustomerspurchase?Whycustomerscontinuetopurchase?Whycustomersdefectfroma company?Whataretheirpreferences andneeds andhowcantheybesatisfied?Whichcustomersareprofitable?Doesthecustomervaluelowpricesmorethansuperiorcustomersupportservices?Doesthe customerprefer next day deliveryor lowerprices?Doesthe customerprefertopurchasethe item ina storethatspecializes inthis typeof itemorfroma largemega-storethatprovidesone-stopshoppingopportunities?11-2
11-2 11.1Introduction ⚫ Evolution of quality definition from internal measures to customer value ⚫ Promotes a broader look at a company’s offerings and its customers. ⚫ Questions/Issues: ⚫ Why customers purchase? ⚫ Why customers continue to purchase? ⚫ Why customers defect from a company? ⚫ What are their preferences and needs and how can they be satisfied? ⚫ Which customers are profitable? ⚫ Does the customer value low prices more than superior customer support services? ⚫ Does the customer prefer next day delivery or lower prices? ⚫ Does the customer prefer to purchase the item in a store that specializes in this type of item or from a large mega-store that provides one-stop shopping opportunities?
Roleof SCMAbilitytorespondto customerrequirementsoneofthebasicpremisesforSCMRelatestocustomerspecificaspectssuchasdelivery statusorproductionstatusSCMalsoimpactpricesbyreducingcostsDell,Wal-MartEDLPstrategies11-3
11-3 Role of SCM ⚫ Ability to respond to customer requirements one of the basic premises for SCM ⚫ Relates to customer specific aspects such as delivery status or production status ⚫ SCM also impact prices by reducing costs ⚫ Dell, Wal-Mart ⚫ EDLP strategies
CustomerValue DefinestheSCMSCM strategy determined by:type ofproducts orservicesitoffersvalue of various elements of this offering tothecustomerExamples:If customers value one-stop shopping=>carryalargenumberofproducts andoptionsPersonal customization ofproducts=>flexible supplychainSupply chain needs to be considered in anyproduct and sales strategySCM strategy could provide competitive advantagesleadingtoincreasedcustomervalue11-4
11-4 Customer Value Defines the SCM ⚫ SCM strategy determined by: ⚫ type of products or services it offers ⚫ value of various elements of this offering to the customer. ⚫ Examples: ⚫ If customers value one-stop shopping => carry a large number of products and options ⚫ Personal customization of products => flexible supply chain ⚫ Supply chain needs to be considered in any product and sales strategy ⚫ SCM strategy could provide competitive advantages leading to increased customer value
11.2 The Dimensions of CustomerValueConformancetorequirementsProductselectionPriceand brandValue-addedservicesRelationshipsandexperiences11-5
11-5 11.2 The Dimensions of Customer Value ⚫ Conformance to requirements. ⚫ Product selection. ⚫ Price and brand. ⚫ Value-added services. ⚫ Relationships and experiences