customer responsive

7/29/2019 Customer Responsive

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A Transaction cost is a cost incurred in

making an economic exchange (restated: the

cost of participating in a market) Due to

rapid changes in internet technologies,

transactions cost have fallen in many areas.

The main purpose of supply chain is to

minimize the total supply chain cost thereby

increasing the total supply chain profit for

all participants (suppliers, manufacturers,

distribu-tors and others who participate in

this process) The premise of collaboration

in supply chain performance improvement is

that supply chain collaboration should look

at developing close work on relationship

marketing, define commitment as an

exchange partner believing that an ongoing

relationship with another is so important as

to warrant maximum efforts at maintainingit; that is, the committed party believes that

the relationship endures indefinitely.

When commitment is honored under such a

positive environment, the transaction cost is

set to decrease noticeably because trust

allows each party to act in good faith,

thereby skipping such tedious transactional

activities as checking the accuracy of

invoices, quality of products, endless

communications to resolve differences,

discrepancies etc., (Dyer and Chu, 2003)

In order to achieve alignment between

demand creation and fulfillment this basis

for differentiation should change to buying

behavior. We have to explore the

opportunities for increasing customer

responsiveness through the alignment of

demand creation and fulfillment by means of

empirical studies of six supply chains in

three sectors (electronics, process industries

and third-party logistics). There must be a

strong trust relationship between buyers and

suppliers, Customer responsiveness cab be

increased in such a way, that customers have

a trust

Product, Volume, Mix, and Delivery, all of

which are related with different time

horizons, , and can be present as eitherpotential or demonstrated responsiveness. It

is argued that, supply chain is based on

different levels of responsiveness at

different tiers, depending on theconfiguration of the individual nodes, as

well as the integration .All these four types

are interrelated with each other, there mustbe a product, its volume is also determined,

whether it should be positive response or

negative. Mix and in time delivery alsomatters, these four components are basic

theme of SCR

Some innovation for which we can

identify pretty clearly that some single

company or individual(s) was/wereresponsible for the breakthrough. The

innovation had a deep and lasting impact

on supply chain practice

Transaction Cost Economics (TCE) was

once described as revolutionary in

economic theory. Even though this seems to


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be a bit excessive, TCE is a major approach

to combining the rigorous instruments of

microeconomic analysis with the practical

relevance of incomplete markets. Instead of

comparing relevance versus rigor, TCE

offers the opportunity to combine both

aspects through scientific research that

combines a sound theoretical basis with

concrete implications for management

1. Taylorism.

10. Toyota Production System.

2. Transportation Load Centre.

3. DRP (Distribution RequirementsPlanning)

4. The FedEx Tracking System.

5. The Universal Product Code.

6. The Ford Assembly Line.

7. Economic Order Quantity (EOQ)

8. The Ocean Shipping Container.

9. P&G Continuous Replenishment.

According to Ronald Coase (1937), every

company will expand as long as the

company's activities can be performed

cheaper within the company, than by e.g.

outsourcing the activities to external

providers in the market.

According to Williamson (1981), a

transaction cost occurs "when a good or a

service is transferred across a

technologically separable interface".

Therefore, transaction costs arise every time

a product or service is being transferred

from one stage to another, where new sets of

technological capabilities are needed to

make the product or service.

All the time, supply chain requires

innovations, but according to DanGilmore-Editor-In-Chief(Supply Chain

Digest) Dec.3,2010,Supply chain has topten innovations all the time.

An effective network is that in which there

is minimum lead time.

As due to new challenges, customer

responsiveness SCM is necessary for new

competitive conditions. However, there is a

gap between actual and prescribed stage.

1.Bargaining cost

By innovation means the new technology or

new product or new technology is

introduced. In supply chain network

innovation is generally consider as

improvement in the method through which

the flows of information, product and fund

can easily flow. But to gain competitive

advantage it is necessary to differentiate the

product from our competitor product.

Supply chain management processes, those

that span multiple organizations and focus

significantly on the flow of goods,

information, and funds can be quite

complex, requiring intra- and inter-

organizational coordination and

collaboration

Communicating effectively with

customers.

Contemplation as professional.

Customer needs differ so the professional

should be aware of the nature of complaints.

Some are simple and some are complex innature. Some requests show an ambiguous

status so the customer relations officer


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should devise such questions that can cover

all the aspects of related complaints. Once

the process of need identification iscompleted then acknowledge that need and

make sure to fulfill that need as soon as

possible.

Customer Responsiveness

Customer responsiveness refers to the

aptitude of attracting and retaining the

cherished customers, understandingcustomers' needs and wants and by

providing high quality service. Taking rapid

strokes for meeting explicit needs of

customers is known as Responsiveness.

1.Feedback and action

Focusing on acquiring and retaining

customers can boost sales and improveprofitability, notes the Peppers & Rogers

Group, a consulting firm that specializes in

customer-based business strategies.

However, testable micro analytic data is yet

to be developed for empirical testing such a

relationship in the functional areas in supply

chain operations. We should not,nevertheless, be discouraged since despite

what almost 30 years ago may have

appeared to be insurmountable obstacle to

acquiring the relevant data[which are often

primary data of a micro analytic kind], today

transaction cost economies stands on a

remarkably broad empirical foundation

(Geyskens, Steenkamp and Kumar, 2006).

2.Implementing cost

In innovation process first the managers

have to see the market and business

environment for ground work. For this

purpose data searched.

In the todays challenging environment the

supplier must have covert it process in such

a way that reduce cost, improve

responsiveness and increase performance. In

supplier responsiveness includes

Innovativeness

Innovativeness has a great effect on any

product or service, as it helps to grow

rapidly and gain a competitive edge in amarket place. If manufacturer supports its

suppliers innovations, it eventually leads to

supply cost reduction, so there should be achance that innovativeness reduces the other

cost, and it is beneficial for supply chain

network.

Innovativeness means, virtue ofintroducing new ideas, and the ability to

think and act independently It is aboutcreating something new, or elaborating the

existing one, in a new style that it must have

a innovative and unique look.

2.JIT

JIT stand for just in time delivery means

there is appropriate supply of goods

according to the demand of the market. The

best supplier is who can fulfill the market

demand. An effective network is that

through which just in time delivery can be

possible.

3.Minimum lead time

Once the decisions have been made by the

authority then clearly communicate it withcustomers. The expectations of customers

should be built realistically to become moreresponsive. A competitive edge can be taken

by effective communication with customersuntil the complaint is solved.

3.Seeking information

Seeking information cost is that which

incurred on the searching require product in


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market at lowest cost and utility of the

product. Bargaining cost is cost which occur

on reaching on at agreeable agreement

between two parties .Implementing cost is

the cost which occurs on implementing the

contract. With the effect of outsourcing the

transaction cost decrease

Some stages of responsiveness are identifiedwhich includes:

Taking needed action.

The customers always prefer exact and

quickcustomer services. The customer

service desks should be responsive enough

to reduce nightmares. These desks or pointsshould have an efficient system of collecting

responses from customers through telephonecalls, internet web-pages, broachers and

personal complaints cells. In this process

customers are involved and informed about

further actions on customer's complaints. Itis in fact giving the value to customers for

building loyalty and trust.

The fulfillment of needs require to have a

complete action plan. The responsibleauthority should act as professional and aconsultant to overcome complaints. They

should have critical judgment ability for

choosing suitable action against that specific

complaint. They should take decisionsstrategically to minimize future risk.

The supplier must take feedback about their

product and according to the need and

demand should take proper action.

There are four types of responsiveness are

identified:

There is a lack of comprehensive definition

of SCR, as well as a defined relationship

between responsiveness and flexibility.

These 10 innovations occurred all the

time in supply chain management; each

and every innovation has an effect in

network design, as well as whole SCMchain network. Basically innovations

support the SCM design network, as

these are the responsible for rapidgrowth and market share. As we know

that, SCM is an integrated approach, so

whenever some changes occurs, it hitsall the chain players.

Transaction Cost

Transaction cost is basically about, is how

the price of final goods and services in the

market. Many authors spend a considerable

amount of time developing the transaction

cost theory using external factors (e.g., Dyer

and Chu, 2003, Williamson, 1981). Porter

(1996)

Transaction cost refers to the exchange ofthe resources of a firm with the outside

environment (market). Transaction cost is

the cost which occurs in the selling andbuying of goods. For example brokerage

commission. In supply chain network this

cost categorize in three heads

Understanding & realizing

customers' needs.

customer responsive

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