Customers linking supply chain

Kughn, F. (1998), Customer-Centered Supply Chain Management A Link-by-Link Guide, AMA-COM, New York. 

Linked supply chain companies can also have varied models within their networks. For example, an MTS company might sell components to a MTO company. This would likely be the case with Dell component suppliers. The suppliers use the MTS model to quickly provide components on demand, while Dell uses the MTO model to fulfill customer orders. 

Most importantly, customer profitability analysis enables focal firms to link supply chain efforts to customer value and market opportunity in a way that improves customer relations and revenues in a profitable manner. 

The chemical industry has concentrated on science and production and also has given substantial attention to manufacturing. But it has given less attention to the supply chain, defined as the critical link between the supplier, the producer, and the customer. This is an important component of green chemistry. 

Regulators and customers require assurance in consistency of pharmaceutical and biopharmaceutical manufacturing operations. Today s manufacturing supply chains require multiple sites in varying locations to produce a product. Quality systems must be perceived as an integral part of the value chain. This requires that all sites be compliant in their operations and systems. Strong areas in one location do not make up for weak or absent systems in another location. Fines are levied and business is made or lost based on the individual site or weakest link in the supply chain. Management must have a mechanism to measure its processes, and a comprehensive QMS is the mechanism to demonstrate capability. 

Anderson Windows has supplied point-of-sale kiosks to its retailers. Consumer and retailers design the windows, get order quotes, and place orders at the same time. The system shows customers what they have designed and links the retailers to the supply chain and distributors. 

The supply chain structure is the network of members and the links between members of the supply chain. Business processes are the activities that produce a specific output of value to the customer. The management components are the managerial variables by which the business processes are integrated and managed across the supply chain. In combination, the SCM definition and this new framework move the SCM philosophy to its next evolutionary stage. 

Supply chains that burst to many tier 1 customers/suppliers will strain corporate resources and limit the number of process links the focal company can integrate and closely manage beyond tier 1. In general, managers in companies with immediately wide vertical structures actively manage only a few tier 2 customers or suppliers. Some companies have transferred servicing small customers to distributors, thus moving the small customers farther down in the supply chain from the focal company. This principle, known as functional spin-off, is described in the channels literature (Stem et al. 1996) and can be applied to the focal company s network of suppliers as well as to its customers. 

Thousands of activities arc performed and coordinated within a company, and every company is by nature in some way involved in supply chain relationships with other companies (Bowersox 1997b Stigler 1951 Coase 1937). When two companies build a relationship, certain of their intemtil activities will be linked and managed between the two companies (Hakansson and Snehota 1995). Since both companies have linked some internal activities with other members of their supply cheiin, a link between two companies is thus a link in what might be conceived as a supply cheiin network. For example, the internal activities of a manufacturer are linked with and can affect the interned activities of a distributor, which in turn are linked with and can have an effect on the interned activities of a retailer. Ultimately, the internal activities of the retailer are linked with and can affect the activities of the end customer. 

With customer requirements and the type of distribution determined, management must select supply chain institutions for both inbound and outbound portions of the supply chain. Factors to consider when selecting supply chain members include fintmeial strength, capabilities ability to link up processes, ability to grow with the business, and competing supply chains. 

The focus of a company is to be competitive in the marketplace and thus be profitable. A competitive supply chain has to provide customers with the expected or superior performance. But what does it mean to be competitive The competitiveness of a supply chain refers to two aspects of the supply chain (1) the link between a supply chain s choice of its competitive metric and the corresponding choice of its architecture and (2) the impact of competitors on a supply chain s performance. While successful firms in every industry often have unique capabilities, an important question for every firm is to adjust its supply chain architecture to remain competitive in the presence of a changing environment. 

Each of the three problem contexts described earlier has the following basic structure A set of sources of supply has to be linked by a supply system to a set of demand locations. Figure 2.3 shows the supply and demand nodes for Delco (three supply nodes and thirty demand nodes). Merloni had five supply nodes and seventeen demand nodes. Letin had five supply nodes and twenty-five demand nodes. Notice that in the Delco case, the flows from supply to demand nodes consist of components used to assemble cars. In the Merloni and Letin cases, the flows consist of finished goods from assembly plants to locations closer to customers. But the abstraction of these problems has the same structure. What are possible ways to create a supply chain from these supply locations to the demand locations ... 

To make a value network, trading partners from different industries form a chain and link together to drive an end-to-end supply chain solution. These links are forged to provide a set of products or services for the end customer. For example ... 

Over the past 25 years, managers have learned to view their firms as a system of closely linked processes which deliver products and/or services to customers. Now managers are recognizing that their entire firm is just one link in a chain of firms whose purpose is to serve the customer. By increasing the integration of the entire supply chain, all the firms in the chain can increase their profits. 

The APICS dictionary defines the term supply chain as either the processes from the initial raw materials to the ultimate consumption of the finished product linking across supplier-user companies, or as the functions within and outside a company that enable the value chain to make products and provide services to the customer. The APICS dictionary defines value chain as those functions within a company that add value to the products or services that the organization sells to customers and for which it receives payment. ... 

Some firms use the concept of internal customer to remind their employees that each employee performs just one step in a supply chain whose purpose it is to provide a good or service to the end customer. The purpose of the internal customer logic is to keep each employee focused on the needs of the end customer. This helps employees recognize that not only is their firm just one link of a larger supply chain, but that the firm itself can be viewed as a chain of processes each of which is a customer of the preceding process. 

There is a variety of software packages for each link in the supply chain. As computers and telecommunications equipment become cheaper, there will be even more advanced types of software available. To simplify the presentation of the types and role of the software used, software will be discussed here in 3 major sections. The internal linkages (software integrating our own firm s functions) will be discussed first, because this usually serves as the platform for integrating the firm with other software. Second, software that links our firm to our customers will be examined. Third, software that links our firm to our suppliers will be the final type that is reviewed. 

Beech s model, displayed in Figure 5, portrayed the demand chain as a sequence of backward-reaching processes, initiated by the end-customer, and enabling the business to anticipate customer demand characteristics. The supply chain structure, responsible for moving products and services upstream to the customer, remained inexorably linked to the demand chain. 

Linking the Supply Chain with the Customer Functional and innovative supply chains Use of Quality Function Deploymentfor capturing customer requirements... 

The story illustrates forgotten obstacles facing those who bring solutions to user-customers at the end of supply chains. These innovations save time and money for both buyer and seller. However, it is not always easy to link with the customers and convince them to adopt your innovation. 

This chapter addresses issues related to trading partner exchanges along the supply chain that help the supply chain forge its links. We describe concepts and tools to improve supply chain customer services and techniques for removing barriers between one s own company and these customers. The topics for this chapter and the related themes that underpin customer linkages include the following ... 

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