Supply chain management Essay Example | Topics and Well Written Essays - 1500 words - 2

Supply chain management - Essay Example Organisations now aim for customer loyalty while keeping cost of production low. This is shooting two birds in one shot but difficult to achieve; difficult because meeting the customer’s needs and wants at the same time minimising cost of production do not ensure quality product or service. Authors argue that customer satisfaction must be an important strategic part of marketing. Products and services must be geared towards customer focus, and customer satisfaction is a goal in a value added supply chain. Firms realise that supply chain management (SCM) can do wonders for the company and for the customer. SCM enables the company to cut costs and look for ways to satisfy customers. Supply chain management excellence is crucial to customer satisfaction; consequently, customer satisfaction is critical to customer loyalty, and loyalty critical to profitability (Reichheld 1996 cited in Flint et al., 2008, p. 258). In order to address the problem of customer loyalty, firms apply pro duct and service innovations. Supply chain learning should be a part of the firms’ strategies to address customer satisfaction and loyalty. This is also the main objective of market orientation – customer satisfaction through superior performance of products and services (Singh, 2004, p. 3). ... 258). Organisations keep constant contact with customers, looking for ways to satisfy their needs and wants. Good customer relation is an important aspect of business (McColl-Kennedy & Schneider, 2000, p. S884). To get closer to the customers, businesses have to work as cohesive organisations, using tools and technology (Gulati and Oldroyd, 2005, p. 92), and focus on knowledge-based economy, slowly moving away from the industrial economy. Identifying and working out to strengthen customer satisfaction, supply chains can help in having good relationship with customers, but supply chains have two attributes which are cost and service. Service is itself responsiveness to the customer’s demand, but demand can also increase cost. Putting on a lot of innovations on the product/s means adding cost on production. â€Å"Supply chain efficiency is measured as a cost of producing and delivering goods and service to the customer.† (Hines, 2004, p. 61) This means that if we increase responsiveness to supply chain, we add cost to the delivery of service. Businesses also have to care for their employees who are considered the most valuable asset of an organisation (Storey, 2007, p. 60). According to JoAnna Brandi (cited in Fisher, 2004), a consultant based in Boca Raton, Florida, employee happiness is somehow related to customer happiness. Customer relationship marketing (CRM) creates value for the customer (Chan, 2005, p. 32). Kotler et al. (cited in Blythe, 2006, p. 5) includes the idea of value in the definition of marketing, which is â€Å"the relationship between what is paid and what is received, and can be increased or reduced by marketing activities†