3.1 Recognizing the Importance of Suppliers in Total Quality Management Flashcards
Customer satisfaction translates directly into increased profits which in turn create a strong profitability and market share which requires loyal customers- who stay with a company and make positive referrals.
Customer Supplier Relationship Importance for Performance Excellence
Refers to customers’ investment in or commitment to a brand and product offerings.
Customer Engagement
Goes beyond loyalty and an important outcome of a customer-focused culture and the organization’s listening, learning, and performance excellence strategy.
Customer Engagement
Characteristics ofCustomer Engagement
• Customer retention and loyalty
• Customers’ willingness to make an effort to do business with the organization.
• Customers’ willingness to actively advocate for.
• Recommend the brand and product offerings.
Practices for Dealing with Customers
🖤 Collect information constantly on customer expectations
🖤 Disseminate this information widely within the organization
🖤 Use the information to design, produce and deliver the organization’s products and services
🖤 Measure customers’ perceptions of satisfaction and their levels of loyalty and engagement
Managing Customer Relationships
🖤 Set and use service standards
🖤 Manage complaints
🖤 Exploit Technology
🖤 Don’t Ignore Internal Customers
Practices for Dealing with Suppliers
🖤 Base Purchasing Decisions on Quality and Cost
🖤 Reduce the Number of Suppliers
🖤 Establish long term contracts
🖤 Measure and Certify Supplier Performance
🖤 Develop Cooperative Relationships and Strategic Alliances
Deals with how organizations manage to get the resources they need form their environment-resembles Total Quality in some ways, yet differs in others.
Resource Dependence Perspective
The effectiveness of the organization should be understood in terms of how well it meets the demands of external groups and organizations concerned with its actions and products.
Resource Dependence Perspective
Building cooperative relationships that benefit both parties to a negotiation is the best manifestation through customer orientation and teamwork.
Integrative Bargaining
Agency Theory
Supplier practices can be categorized as outcome-based approaches or behavioral-based approaches.
Agency Theory
Outcome-based approaches are more concerned with reducing detrimental effects of supply risk events than with reducing the likelihoods of a detrimental event.
Behavior-based approaches are intended to address supplier processes rather than outcomes. Open communication and improved information sharing, certification, monitoring the progress and actions of suppliers, and close relationships with suppliers leads to better quality performance.
Agency Theory
Should be considered by the business firms as partners.
Customers and Suppliers
Diverse customer roles
Require new bonds of interdependence and an increasingly complex social network that crosses traditional organizational boundaries.
