Weeks 3&4 - SCM And Delivery Customer Value And Demand Management And Shaping Flashcards
What is meant by ‘outside-in’?
This is where customer orders trigger the supply chain
What is meant by customer-centric?
This means that customers are at the centre of the supply chain
What are the three stages of customer service?
- Pre-transaction
- Transaction elements
- Post-transaction
Features of the Pre-transaction stage of customer service (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
Features of the transaction elements stage of customer service (4)
- 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?
Features of the post-transaction stage of customer service (4)
- 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?
4Ps in marketing
- Product
- Price
- Place/Customer service level
- Promotion
Costs of logistics (5)
- Inventory carrying costs
- Quantity costs
- Transportation costs
- Warehousing costs
- Order-processing and information costs
Potential core product benefits to customers (4)
- Quality
- Technology
- Product features
- Durability
What can firms do to retain customers? (5)
- Delivery lead time and flexibility
- Delivery reliability and consistency
- Order fill
- Ease of doing business
- After-sales support etc
What is the relationship between cost of of service and the level of service provided? (2)
- 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
Pareto law/ 80-20 rule
Means that 20% of your customers will generate 80% of your sales
How has supply chain management changed over since the 80s (5)
- 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
What is the difference between upstream and downstream supply chain?
- 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
What is the importance of supply capacity forecasts and demand forecasts?
Companies need to ensure that they can meet the quantified demand making sure they have just about enough supplies in order to do so
Demand and supply integration for retailers
- Demand comes from customers
* Supply to retailer comes from manufacturer
Demand and supply integration for manufacturers
- Demand comes from retailer - where retailer will send manufacturer a demand plan/forecast
- Supply to manufacturers comes from the upstream suppliers/supply base
Demand and supply integration for suppliers
- Demand comes from manufacturer
* Supply base starts here
What are the components of the demand process? (3)
- Demand planning
- Demand sensing/forecasting
- Demand management/shaping
What is demand planning?
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)
What is demand sensing/forecasting? (3)
- 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
What is demand management/shaping? (3)
- 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)
What does marketing give information on? - integration between demand and supply (KPI & objectives) (4)
- New customer/product opportunities
- Planned promotions
- Defined customer segments
- Feedback on over/under service delivery
What does supply chain management give information on? - integration between demand and supply (KPI & objectives) (3)
- Lead times
- Capacity
- Supply chain costs
What are the 4 groups that are used to manage demand
- Discover markets
- Create capabilities
- Grow & understand demand
- Fulfil demand
What does discovering markets involve? - managing demand (2)
- Involves analysing opportunities through market segmentation
- Also involves creating scenarios and concepts e.g product/service concepts or multi-channel strategy
How does creating capabilities help to manage demand? (2)
- Through supply chain in terms of network design, strategic supplier relationships, service partners
- Also through differential offering via product features, packaging and customer service
What does growing and understanding demand involve? - managing demand (2)
- Creating demand through micro/macro marketing, price promotions
- Predict and understand demand through predictive analysis, market assumptions and conscientious planning
Push vs pull (2)
- 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
