Supply Chains with a Focus on Customer Value Essay - 6

Supply Chains with a Focus on Customer Value - Essay Example 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 product 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). Companies attain competitive edge through constant innovation. The first periods of the new century marked profound shifts in organisation’s strategies with aims for talents, technologies and customer’s focus and loyalty (Venkatraman and Henderson, 2008, p. 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.