The Key to Real Customer Value: Effective Supply Chain Management

This article discusses the importance of effective supply chain management in delivering real customer value. It explores the concept of supply chain management and consumer value, the effectiveness of consumer value in supply chain management, and the challenges faced in delivering customer value. Real examples from companies like Samsung are used to illustrate the concepts.

The key to real Customer Value is
effective Supply Chain
Management Discuss this
statement using examples of real
companies that have either
achieved
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Table of Contents
INTRODUCTION................................................................................................3
LITERATURE REVIEW........................................................................................3
Concept of supply chain management and consumer value........................3
Effectiveness or importance of consumer value in supply chain
management................................................................................................4
Can supply chain management deliver a good sort of customer value in
market..........................................................................................................5
Different challenges faced at the time of applying supply chain
management to deliver the customer value................................................6
CONCLUSION...................................................................................................7
REFERENCES....................................................................................................8
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INTRODUCTION
Supply chain management is referred to wide range of actions needed
to control, manage and execute products flow from materials to manufacture
to distribution. It encompasses integrated execution and planning of
procedures required to optimize flow of information, items and capital in
functions that widely include sourcing, demand planning, production,
logistics, inventory management and transportation. The current report is
based examples related to supply chain management and strategies of
Samsung that impact on consumer value. This study explains in depth
manner that how effective supply chain strategies can deliver customer
value in form of literature review.
LITERATURE REVIEW
Concept of supply chain management and consumer value
According to Waters, (2017) supply chain management is one of the
most essential part of every company whether its is small or large. It deals
with storing and movement of materials required to develop a specific
product and inventory management, as well as keeping track of finished
items from where they were produced to who they delivered to. It is the
management of flow of services and products that transform raw materials
into accomplish thing, supply chain management includes active
streamlining of business supply chain activities to increase consumer values
and to achieve competitive benefits in marketplace. It is the key elements of
business success, that help to increase profitability and generate more
revenue for companies. Most organizations in their values chain chose
suppliers available within market area where they operate, for raw materials
and other facilities based on quality and prices. Lim and et.al., (2017)
highlighted that supply chain management characterises an attempt up
suppliers to implement and develop supply chains that are as effective as
economical as possible. It covers each business functions from production to
goods development, marketing to information systems. It directly links and
mainly control production, transportation and distribution of a good.
Discussed by Schwepker and Ingram, (2016) consumer value refers to
what services or goods is worth to an individual in relation to substitutes.
Worth means what customers feels they obtain as benefits in return for
money they pay. In simple words, how people appreciate the characteristics
of goods is defined as consumer value. Companies deliver value by achieving
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highest possible client’s value at least affordable cost, furthermore, year by
year firms always attempt to achieved it effectively and differently (Pettit,
Croxton and Fiksel, 2019) . Each customer idea of values for as specific item
is different and based on current as well as past perceptions of similar goods
that are accessible but there is no importance for its when product is
unattainable, citing significance of businesses accessibility of materials and
resources at right place and right time to produce those goods. Wang, G and
et.al., (2016) stated that consumers value defined as the ability of
organizations to make and add value of goods as well as services, specially
service they provided to target market aspects of their businesses. Some
value means price and some means worth of something. What people pays is
not only money, but also non price terms such as effort, inconvenience, time
and energy.
Effectiveness or importance of consumer value in supply chain management
According to Madani and Rungsrisawat, (2019) customer value is very
important for businesses as well as their supply chain management. SCM
had huge impact on firms as it helps to create effective consumer value by
suppling quality goods with lowest and reasonable price. Customer value-
oriented supply chain administration is capable to make competitive cost
and time benefits as well as solving issues in coordination, information and
convergence sharing during transfer and creation of value, by collaboration
and implementing resource sharing between members in supply chain.
Companies manage their supply chain activities in order to provide better
service to consumers by adding value within it. Value it one of the most
important elements in supply chain strategies as it helps to increase
consumer base and profit margin as well. SCM is well recognized in context
of business environment, it assists an organization to product development
procedure by sourcing valuable logistic services in order to develop optimum
value for target market. In early days, the concept of consumer value was
not an essential aim for firms, there are no way to measure it, but customer
value of organizations can decrease or increase based on supply chain
activities that they use. In previous stages, businesses started outsourcing
few parts of their SC functions to increase profitability and to reduce costs
incurred. All these things occur due to increase in costs of global
transportation, it led to companies gaining competitive advantage over
market competitors. Supply chain management is one of the best techniques
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that help firms to improve consumer value, significance of developing a close
customer connection as a major function of supply chain which make a
business able to react faster to their target clients. Objective and aim of
supply chain management are to enhance productivity, betterment
competitiveness of relationships and improve consumer satisfaction, along
with it more objective of this concept is to improve effectiveness and
efficiency in manufacturing goods by decreasing monetary worth and assets.
Suryanto, Haseeb and Hartani, (2018) argued that supply chain management
activities refer to standard operational functions in companies to enhance
administration effectiveness through along supply chain. Consumer value
placed importance in supply chain management, because it increases
efficiency and motivational level of workers. Increasing performance of
employees and efficiency of business use of materials are both vital to
adding value as well as reducing cost to end clients. By implementing
effective supply chain management in business operations functions
outcomes in enhanced consumer value because flexibility of organization is
appealing to target market, this will be increased benefits that a individual
client will be loyal. It helps to provide appropriate satisfaction to buyers by
providing quality goods or services. Through supply chain management
organizations such as Samsung electronics deliver their range of products in
market with quality that added more value for person who purchase it.
Supply chain management of company, cater right quality and quantity of
products that enhance the expectation of individual and build strong
relationship between business and clients.
Can supply chain management deliver a good sort of customer value in
market
Hugos (2018)In the process of building customer value of company
different element of the supply chain are consider by Samsung. Different
element of supply chain is marketing, sales, cost, quality and logistic of the
company in the market. Author then highlight that Samsung used to plan
different activity in a way that company is able to build good customer value
in market. Author highlights that supply chain management of Samsung is
planned in a way that it understands need of the customer in market and on
basis of same used to develop the product accordingly to build value for
them in market place. Samsung used to follow producer – converter –
customer as a phases of supply chain management. For example: Samsung
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uses electronic supply chain management in an organization to carry out
different operation of the business. They used to apply six sigma and many
other attributes to supply chain of organization, which used to help
organization in improving the value of customer in market.
Christopher (2016) in the published paper highlights that all the
customer always considers to have a value for various product they are
consuming. Value here is used in context of quality and price of the product
in the market. Supply chain management of Samsung help organization in
reducing waste of company, at the same time also help firm in improving
quality of the product. This help Samsung in offering good variant of product
at reasonable price in the market. This used to create a good sort of value for
customer in market. Mangan and Lalwani, (2016) supports the above author
by highlighting that this not only used to help in building customer value but
reducing amount of wasted and improving quality of product in market, also
helps customer in building good sort of efficiency of company in long run. For
example: Samsung used to offer smart phone in the market at the
reasonable rate and with good quality of product. This has created good
customer value for the customer and Samsung is able to build good
customer base of the company in the market.
Fredendall and Hill (2016) Another element of supply chain management
which used to create value for the customer in market is the communication
which is build by supply management in market. As Supply chain
management of Samsung used to see good amount of innovation cooperated
in their operation. This help Samsung in communicating different offering of
the company, this used to create the value for the customer in the market.
At the same time, it also used to help the company in getting competitive
advantage in the market. At this situation marketing element of the supply
chain management used to create value for the customer in the market. As
Samsung uses different promotional tool to promote the product in the
market. Dubey and et.al., (2017) supports the above author by highlighting
that Samsung in the market used to promote the product of the company in
a way that it used to highlights the different need which will be satisfied by
organization product in the market. This passes on the different message to
the customer in the market and used to impact their decision regarding
purchasing product of company in market. This activity of organization used
to create good sort of customer value of organization. Reason behind the
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same is identified that all the customer in the market are clear about the
different feature of the product, this used to help the consumer in making
different purchasing decision.
Schönsleben, (2016) has highlighted in the past that logistic element of
supply chain management also used to create a good sort of value for the
customer in the market. As all the customer always desire the product which
they can easily procure from the market. Reason behind the same is that
customer is able to test he product and also can have the feel touch of the
product before procuring the same in the market. Gattorna, (2017) explain
that Samsung for the same reason used to open the different store in their
own name in the market. They offer the product of the company to customer
from the same store to consumer at the market place. This help organization
in fixing up good sort of communication with different consumer in market
and also help the consumer in providing before and after sales both the
services to the consumer in the market. This helped organization in
understanding the customer in better way and offering required product to
the customer. This used to create a good sort of customer value for the
organization.
Different challenges faced at the time of applying supply chain management
to deliver the customer value
In view point of Malhotra, Mackelprang and Jayaram, (2017)
effectiveness and efficiency of organizations supply chain strategies defined
their business position in market and support differentiates it from its
competitors. It can be said that consumer value is delivered through
appropriate and right supply chain strategy developed by management, that
help to increase customers based as well as increase profitability effectively.
But at the same time it used to increase the cist of he company which used
to create the variety of the challenges in copping up with the cost related to
procuring different technology in the organization. In context of real-world
examples, Samsung create their supply chain strategies in effective and
systematic manner, this company learned no matter how wide firm errors or
failure do occur in supply chain, this meant losing consumer value for goods
that they provide and in return lose millions of capitals in revenue (Jabbour
and de Sousa Jabbour, 2016) . At the same time in the past Samsung in the
past has also seen the good amount issue related to the same for example:
At the time when organization has introduced the galaxy note 7 in market.
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Non-proper implication of supply chain management in the organization has
lower down the quality of the organizational product in the market. This has
impacted the customer value of the company in negative way. Another
challenge which is faced by the organization at the time of implanting supply
chain management in the organization is to find t difficult to understand the
customer need and the preference of the company in the market. Reason
behind the same identified that need and preference of customer in the
market used to change on regular basis in market. Which make it difficult to
understand the different preference and need of the customer in the market
and this used to impact the performance of the business very negatively in
the market (Vanalle and et.al., 2017). Another challenge which is faced is to
decide the best logistic channel which can be selected by the organization to
connect with the customer in the market, this eventually used to create the
variety of the issue for the organization. As there are many different types of
logistic channel which are available in front of the organization, so it get
difficult for the company to select the best out of all which can connect wider
number of the customer in the market (Coyle and et.al., 2016) .
CONCLUSION
Going through the report has provided with variety of information
which used to highlight that customer value and supply chain management
concept of an organization is interlinked with each other and used to create
variety of value. After that report conclude that there are many different
sorts of the benefit which is brought by supply chain management of the
organization which help them in building good sort of customer value in the
market. After that the report conclude that different element of supply chain
management used to help the company in building customer value. In the
end the report summarized the different challenges faced by supply chain
management in maintain customer value in Samsung.
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REFERENCES
Book and Journals
Govindan, K., Jha, P.C. and Garg, K., 2016. Product recovery optimization in
closed-loop supply chain to improve sustainability in
manufacturing. International Journal of Production Research. 54(5).
pp.1463-1486.
Kurniawan, R and et.al., 2017. The effects of vulnerability mitigation
strategies on supply chain effectiveness: risk culture as
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Lim, M.K and et.al., 2017. Knowledge management in sustainable supply
chain management: Improving performance through an interpretive
structural modelling approach. Journal of cleaner production. 162.
pp.806-816.
Madani, M. and Rungsrisawat, S., 2019. The knowledge sharing and the
relationship between efficient team and supply chain
management. Polish Journal of Management Studies. 20.
Malhotra, M.K., Mackelprang, A.W. and Jayaram, J., 2017. How inventory
consignment programs can improve supply chain performance: a
process oriented perspective. Production. 27.
Schwepker, C.H. and Ingram, T.N., 2016. Ethical leadership in the salesforce:
effects on salesperson customer orientation, commitment to customer
value and job stress. Journal of Business & Industrial Marketing.
Suryanto, T., Haseeb, M. and Hartani, N.H., 2018. The correlates of
developing green supply chain management practices: Firms level
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Wang, G and et.al., 2016. Big data analytics in logistics and supply chain
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Waters, D., 2017. Towards a Strategic View of Supply Chain Management.
In Global Logistics And Distribution Planning (pp. 23-30). Routledge.
Hugos, M. H., 2018. Essentials of supply chain management. John Wiley &
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Christopher, M., 2016. Logistics & supply chain management. Pearson UK.
Mangan, J. and Lalwani, C., 2016. Global logistics and supply chain
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management. John Wiley & Sons.
Fredendall, L. D. and Hill, E., 2016. Basics of supply chain management. CRC
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Schönsleben, P., 2016. Integral logistics management: operations and supply
chain management within and across companies. CRC Press.
Jabbour, C. J. C. and de Sousa Jabbour, A. B. L., 2016. Green human resource
management and green supply chain management: Linking two
emerging agendas. Journal of Cleaner Production. 112. pp.1824
Gattorna, J., 2017. Strategic supply chain management Creating shareholder
value by aligning supply chain strategy with business strategy.
In Strategic Supply Chain Alignment (pp. 32-52). Routledge.-1833.
Vanalle, R. M and et.al., 2017. Green supply chain management: An
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Brazilian automotive supply chain. Journal of cleaner production. 151.
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