Weeks 3&4 - SCM And Delivery Customer Value And Demand Management And Shaping

Question 1

What is meant by ‘outside-in’?

Answer 1

This is where customer orders trigger the supply chain

Question 2

What is meant by customer-centric?

Answer 2

This means that customers are at the centre of the supply chain

Question 3

What are the three stages of customer service?

Answer 3

• Pre-transaction
• Transaction elements
• Post-transaction

Question 4

Features of the Pre-transaction stage of customer service (4)

Answer 4

• Written customer service policy - is it communicated internally and externally?, is it understood?, is it specific and quantified where possible
• Accessibility - are we easy to contact/do business with? Is there a single point of contact?
• Organisation structure - is there a customer service management structure in place?
• System flexibility - can we adapt our service delivery systems to meet particular customer needs

Question 5

Features of the transaction elements stage of customer service (4)

Answer 5

• Order cycle time - what is the elapsed time from order to delivery?, what is the reliability/variation?
• Inventory availability - what percentage of demand for each item can be met from stock?
• Order fill rate - what proportion of orders are completed filled within the started lead time?
• Order status information - How long does it take us to respond to a query with the required information? Do we inform the customer of problems or do they contact us?

Question 6

Features of the post-transaction stage of customer service (4)

Answer 6

• Availability of spares - what are the in stock levels of service parts
• Callout time - how long does it take for the engineer to arrive and what is the ‘first call fit rate’?
• Product tracing/warranty - can we identify the location of individual products one purchased? Can we maintain/extend the warranty to customers’ expected levels?
• Customer complaints, claims etc - How promptly do we deal with complaints and returns? Do we measure customer satisfaction with our response?

Question 7

4Ps in marketing

Answer 7

• Product
• Price
• Place/Customer service level
• Promotion

Question 8

Costs of logistics (5)

Answer 8

• Inventory carrying costs
• Quantity costs
• Transportation costs
• Warehousing costs
• Order-processing and information costs

Question 9

Potential core product benefits to customers (4)

Answer 9

• Quality
• Technology
• Product features
• Durability

Question 10

What can firms do to retain customers? (5)

Answer 10

• Delivery lead time and flexibility
• Delivery reliability and consistency
• Order fill
• Ease of doing business
• After-sales support etc

Question 11

What is the relationship between cost of of service and the level of service provided? (2)

Answer 11

• As the level of service increases the cost of the service will increase e.g airlines
• Businesses differentiate their level of service according to different customer segments because of the cost of providing the highest level of service

Question 12

Pareto law/ 80-20 rule

Answer 12

Means that 20% of your customers will generate 80% of your sales

Question 13

How has supply chain management changed over since the 80s (5)

Answer 13

• 1980s: cost-efficiency and mass production focus
• 1990s: matched demand with supply, avoid stock outs, cost-efficiency and quality focus - lean manufacturing & TQM
• 2000s: demand-driven SCs, demand sensing - improve forecasting, efficiency/effectiveness focus
• 2010s: market-driven and customer-centric, demand shaping, integration and sustainability focus
• 2015-present: digital supply chains, SC analytics, efficiency/effectiveness/resilience/sustainability focus

Question 14

What is the difference between upstream and downstream supply chain?

Answer 14

• Upstream is about supplying, sourcing and logistics so turning the raw material into a product
• Downstream SC is about marketing, sales and distributing that final product to the end user

Question 15

What is the importance of supply capacity forecasts and demand forecasts?

Answer 15

Companies need to ensure that they can meet the quantified demand making sure they have just about enough supplies in order to do so

Question 16

Demand and supply integration for retailers

Answer 16

• Demand comes from customers

* Supply to retailer comes from manufacturer

Question 17

Demand and supply integration for manufacturers

Answer 17

• Demand comes from retailer - where retailer will send manufacturer a demand plan/forecast
• Supply to manufacturers comes from the upstream suppliers/supply base

Question 18

Demand and supply integration for suppliers

Answer 18

• Demand comes from manufacturer

* Supply base starts here

Question 19

What are the components of the demand process? (3)

Answer 19

• Demand planning
• Demand sensing/forecasting
• Demand management/shaping

Question 20

What is demand planning?

Answer 20

In demand planning there is a focus on how a business creates demand for its product which could be through quality, packaging, promotions, pricing, place (channels)

Question 21

What is demand sensing/forecasting? (3)

Answer 21

• Focuses on detecting what customer demand will be
• Forecasts can be constructed on a strategic level (long term), tactical level (medium term), operational level (short term)
• Takes internal and external factors involved

Question 22

What is demand management/shaping? (3)

Answer 22

• Focus on how to prepare and act on demand
• It is key to integrate and balance supply and demand
• Demand can also be managed and shaped by sales and operations planning (S&OP)

Question 23

What does marketing give information on? - integration between demand and supply (KPI & objectives) (4)

Answer 23

• New customer/product opportunities
• Planned promotions
• Defined customer segments
• Feedback on over/under service delivery

Question 24

What does supply chain management give information on? - integration between demand and supply (KPI & objectives) (3)

Answer 24

• Lead times
• Capacity
• Supply chain costs

Question 25

What are the 4 groups that are used to manage demand

Answer 25

• Discover markets
• Create capabilities
• Grow & understand demand
• Fulfil demand

Question 26

What does discovering markets involve? - managing demand (2)

Answer 26

• Involves analysing opportunities through market segmentation
• Also involves creating scenarios and concepts e.g product/service concepts or multi-channel strategy

Question 27

How does creating capabilities help to manage demand? (2)

Answer 27

• Through supply chain in terms of network design, strategic supplier relationships, service partners
• Also through differential offering via product features, packaging and customer service

Question 28

What does growing and understanding demand involve? - managing demand (2)

Answer 28

• Creating demand through micro/macro marketing, price promotions
• Predict and understand demand through predictive analysis, market assumptions and conscientious planning

Question 29

Push vs pull (2)

Answer 29

• Push / make-to-stock: has a mass production focus with the cycle being factory to material warehouse
• Pull / make-to-order: has a demand-driven focus with the cycle being from the factory to the material customer