Effective Supply Chain Management System for Customer Value

This document discusses the critical analysis of an effective supply chain management system in order to easily reach products and services to customers. It includes a literature review on supply chain management and evaluates the supply chain management system of Amazon and Samsung. The document highlights the importance of customer value and the strategies used by these companies to achieve it.

Global supply chain
Management and Logistics

Table of Contents
INTRODUCTION...........................................................................................................................3
1.Critically analysis of effective supply chain management system in order to easily reached
product and services to customers. .................................................................................................4
1.1 Literature Review.................................................................................................................4
2. Evaluates supply chain management system with supporting examples....................................6
2.2 Supporting Examples: Amazon supply chain management system.....................................7
2.3 Samsung electronics supply chain management system......................................................8
CONCLUSION...............................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Supply chain management is utilise in mostly companies in order to utilise various
strategies to attain objectives of company. It established different value chain system in order to
suppliers for raw material and other services charged on the price based. Relationship between
the supplier and companies both are utmost important factor because market trends and external
factors that affect the profitability of company, market position and gaining competitive
advantages (Aqlan, 2016). It also measures customer value and enhancing deliver customer
value. Amazon is one of leading e-commerce company which provides all kind of goods and
services and it mainly as retail shop so it utilize effective distribution system and implement new
strategies which impact as successful business model. On the other hand, Samsung electronic
segment which is global brand so it also possess own SCM system but in 2016 become failure or
errors occurs in supply chain system. The report is about a describe and analysis how companies
failed or succeeded at achieving customer value through supply chain strategies on that basis
using the examples of Amazon and Samsung.
1.Critically analysis of effective supply chain management system in order to
easily reached product and services to customers.
1.1 Literature Review
According to Gorane and Kant, (2017), supply chain management is an essential function
that is performed to provide goods to end user at right time. It help to meet with the demands of
consumers and give competitive edge to company. Effective logistics management assist an
organization to supply necessary products to target audience. It plays a vital role to satisfy
consumers and helps to create a loyal consumers base who will give preference to the products
and services of company. So, managers need to design process, operations of supply chain in
such a manner that they will be able to manage timely availability of goods and services at
market place. Now, organization are working at large level and has expanded operations at
global level that make it crucial to adopt efficient supply chain management in order to meet
with demand arises at market place. For this, manager undertake various functions such as

warehouse, inventory management to provide quality services to end user. They continuously
analyse the level of inventory within entity to meet with the requirement of consumers. Apart
from this, this function essential to improve the performance as well as productivity of
organization by making efficient utilization of available resources. Further, it helps company to
provide value to consumers and formulate long term relationship with them. Thus effective
supply chain management approaches is essential to inflate the business growth and profitability.
According to Sreedevi and Saranga, (2017), Supply chain management activities are
crucial and help to render effective services to consumers. With this, company will be able to
deliver the goods to target audience at right time. Thus, it assists to maintain healthy relationship
with consumers by providing services in minimum time. In addition, this function comprises,
ample of activities such as procurement of raw material, keep control over stock, inventory,
transportation management and so on. The main aim of supply chain management is to provide
highest level of services to customers in minimum cost. Now, consumers are not tend to wait to
get their order thus they prefer those companies who deliver products in lees time. With better
logistics services, managers of business entity can maintain lone term relationship with end
users. It will help them get an edge over competitors and increase sustainability of organisation.
Besides this, it increases sales as well as profitability of business entity. Demand forecast a
crucial aspect for each and every organizations as it help to meet with the demand arises at
market place. With effective supply chain approaches managers are able to fulfil the
requirements of customers on timely basis. Thus, this functions not only increases the
productivity and efficiency of organization but also provides an experiences & value to
consumers. Existing and loyal customers are more important for an entity as they give
preference to the products being offered by company. Hence, effective supply chain
management is essential top provide effective services to target segments and renders
sustainable competitive edge to company. Organisation utilize effective distribution strategies in
order delivery of products and services on time so easily attain customer satisfaction level and
create a brand image in the mind of customers. Organisation settled effective supply chain
system which leads to quality, performance, reliability or cost so it linked to customer value.
Most of the companies believes that s business is required to target all its attention on serving
customer and their market needs. Manufacturing process of company it impact on operational
effectiveness and efficiency in order to companies in adding value to customers. It involves in

these system as inbound and outbound logistics. Inbound logistics refers to those which
purchasing inventory. Outbound system means distribution and delivery of final goods.
Moreover, suppliers and distributor work together with proper coordination so it helps to
achieved operational efficiency and makes the business more successful. In factory outlet floor
mangers responsible for product and services it assign duty for provide goods in high quality
because customers quality come first. Cost and time both are crucial factors which is incurred in
manufacturing of product & services so must be controlled through efficient supply chain
strategies. It also focused on customer taste, preferences, habit and market trend so provides
good to customer on these basis so gaining competitive advantages in the market. Organisation
conduct research and development programmes which leads to development of new products. It
includes various kind of innovations so it will give organisation new edge. Relationship between
the customer and suppliers it most important factor due to conducted different activities.
Automotive industry is one of the industry which gaining different competitive advantages
through supply chain system due to that they can deliver customer value. However, on that basis
companies capture huge market share and dominances at marketplace means they have
leverages over their suppliers. Organisation systematically utilize supply management system
with help of strategies under that those strategies refers to vast warehousing and distribution
network, diversified delivery strategy, humans and automations all these strategies work
effectively operations on larger scale. There are various examples like Amazon utilize effective
supply chain model which leads to larger scale and empowered technological innovations that
intervention on operations and efficiency. It operates business through online operations so it
helps to increasing productivity, expand reach and enhancing profit of the company. They
settled effective distribution network and provides goods and servicing on time because they are
no compromising on delay in delivery (Badzar, 2016). It is centralised distribution system so all
goods and services deliver in various cities and proper warehousing and storage facility. It
includes supreme transportation facility so goods and services easily transfer from one place to
another place due to these goods are available at right time at right place. On that basis
organisation achieved goal of company and successful business model. It lot of attention on
customer focus in order to competitive advantages is ability of supply chain partners to
coordinate and integrate strategies which main purpose to satisfying end users. Customer
focused supply chain strategies provides an approach which impacts on match supply and

demand so driving low costs simultaneously improving customers satisfaction. It also improved
performance of company
which helps to formulated business value added framework to emphasize on responsiveness,
resilience, reliability and resignment.
2. Evaluates supply chain management system with supporting examples.
Supply chain management plays important role in an organisation and superiors focused
the distribution system which conduct in proper way because managed distribution system
utilize by company so deliver value to customer and develop brand image in the eyes of
customer. Under the process of supply chain management is follow proper procedure that is one
reason of success and growth of organisation. Most of the companies establish supply chain
system so chosen suppliers for raw material and other services provides on the based of price
and quality. Customer is valuable asset of company in order to deliver value for achieving
profitability and increasing sales revenue (Banerjee, 2018). On that basis companies more
focused to value chain strategies so highest possible customer value at the least possible cost.
Each persons different from each other so their perception and opinion is different on similar
product and services. Organisation utilize different manufacturing system because easy
availability of resources and material at the right time and right place to manufacture those
goods and services. Customer value refers to the ability and capability of organisation to develop
and add value to products and services. Companies adapting various measures of customer value
which help to develop customer value of organisation and accordingly increase or decrease
supply chain strategy they use. Due to increasing the prices of international transportation so it
impact on gaining competitive advantages which increased customer value. There so many
strategies which are developed by organisation reason being products are more readily available
for customer at cheaper price. Such strategies mean defines position at market place and
differentiates from it's competitor as well as also increasing efficiency and effectiveness of
company (Bhardwaj, 2016). It is essential system for organisation so properly managed
distributors, warehousing and transportation facility so discuss those companies which analysed
supply management system in order to companies failed or succeeded at achieving customer
satisfaction through value chain strategies.

2.2 Supporting Examples: Amazon supply chain management system.
Amazon is one of leading company across globe in order to utilise effective supply chain
system. It developing various kind of strategies in order to establish supply chain system and
considered following arrangement multi-tier inventory management system, highly efficient use
of IT, wide network of warehouses and superlative transportation system.
Outsourcing is one of the important concept so it refers to inventory management. It utilize
various outsources aspect storage and distribution of products that are not frequently purchased
nor ordered for immediately delivery on that basis also included cost which incurred of storing.
Organisation properly maintain stocks in its own warehousing in order to fulfil the needs of
customer at specific period of time so not compromise on the delivery times and lead times.
Amazon has online retail store which famous for time delivery of goods and services so it uses
different forms of delivery on that basis developing price differentiation strategy reason being
for successfully establish supply chain system so other companies also learn these kind of tacit
which are failure in value chain management system such as Samsung, Nike, Adidas and Cisco
(Busse, 2016). It includes various forms like one day delivery, free super save delivery, first
class delivery and prime customer delivery. All these forms of delivery considered as products
easily reached to customers an more options are opened paying more so faster delivery. It
changes strategies on the basis of fluctuation in demand and market trend and customer
segmentation into price differentiated so offers the company on the basis of market that changes.
Amazon basically follows two strategy in order to properly managed inventory which known as
push and pull strategy whereas inventory is held so use a push strategy and shipment of the
orders so utilize pull strategy. It serves globally so utilize multi-tier inventory system in that first
tier is settled distribution centres so these is centralised system and whole process is operates in
order to amazon holds fewer stock and on the basis of customer demand so supply in dynamic
manner. The next tier distribution system which known as partner distribution which included
the wholesalers due to whenever product is not available in own centres so sellers to supply
customer with required products because company trust on its partners. Moreover, there use a
advanced technology in term of sophisticated and real time IT (Chen, 2019). These is the third-
tier distribution system which refers to connection with third party sellers, publishers,
manufactures and vendors so organisation internally linked with them who ensures that fulfils

orders from customers. Amazon settled effective supply chain management system so attract
and retain customer for longer period of time. It also create value in the eyes of customers in
order to utilize supply chain is an outstanding achievements in retail logistics. It promises &
deliver high quality of goods and services to customer which brings to achieved customer
satisfaction level and their goal of becoming the proffered retailer in America. Organisation goal
is that continuous development of supply chain system which leads to invest in service
expansion. It utilize a strategy on wide range which includes warehousing network, multi-tier
inventory system and superb transportation facility and also supporting by the latest technology
as well as using manufacturing and pricing strategies.
2.3 Samsung electronics supply chain management system
Samsung is one of the biggest electronic manufactures since the early 1990's. It is origin
from south Korea so company success and growth factors depends upon the developing
systematic supply chain system which create value for the customer also. It basically using
ineffective strategy supply chain system in order to company failed in 2016 when its launched
Galaxy note 7 so rivalry apple beat them due to found that utilize out their battery supplier was
at fault and offered customers replacement that handset with new suppliers. These handset work
not proper so customer feedback as that devices overheating and exploding so it also affects
profitability and decreasing sales revenue of company (Fernie, 2017). Suddenly, decreases the
sales so following the most of users were encouraged to stop usage of these hand set. Further, so
more suppliers contacted and send reports again of exploding batteries. Organisation face major
hit in that year in term of reducing customer value, affect brand image at marketplace along
with profitability and revenue so company incurred heavy loss. On that situation organisation
come up with promoting discount the Galaxy note 7. on that circumstances Samsung announced
a brand new quality assurance programme started and other safety measures are included in
these campaign. That time company faces crisis due to developing image as embrace block chain
for its globally supply chain operations. Organisation taking step to stoppage supply chain
distribution system afterwards again renounce strategies in order to product launches and
shipment which make it easier for the company to respond to rival organisation, satisfy customer
needs and wants. It eliminates bottlenecks and effectively applying Six sigma methodology
which help in supply chain projects and other related activities. It adapting Six sigma technique
so high-quality and innovative products developments and increased customer satisfaction along

with organisation profits (Hugos, 2018). In context of company, it utilize these techniques so
included DMAEV which refers to define, measures, analyse, enables, verify. Measured
terminology is used in these model because measured two performance indicators which name
as operations and finance. It includes analysis whole process of supply chain system so easily
eliminates bottlenecks and maxisimizig supply efficiency and visibility in order to create
customer values and greater consumer confidence. Organisation controlled, maintain and
managed supply chain system so builds strong customer relationship and retain long period of
time. Customers are crucial to any business because without that, there is no sales and without
sales companies cannot achieved profits (Ivanov, 2018).
Hence, all of the above concept that has been referred to understand SCM process in
order successfully established supply chain management system and operates amazon so easily
accomplished goal of company and attain level of customer satisfaction. On the other hand,
Samsung failure in distribution network so lead to incurred heavy loss and also affect goodwill
of company.
CONCLUSION
From the above report it has been concluded that, supply chin management system work in
effective manner so accomplished goal and objective of companies. Most of companies utilise
strategies so creates customer value and that process helps to deliver customer value. Effectively
managed distribution system so it's key of successful business as well as satisfy the needs and
wants of customer, attracts and retain customer for longer period of time.

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