The development of information technology has enabled businesses to provide better services to customers. It occurs as the results of easier and simpler purchasing scheme like using web-based application (e-commerce), connectivity to multi suppliers, and faster product delivery. In many industries like manufacturing and hospitality, the adoption of information technology is undoubtedly important.
Dell, a well-known computer manufacturer, for example, enables customers to design their own personal computers, which influence how Dell manages the order with some suppliers to fulfil the customer needs.
Similarly, BMW, a luxury automobile manufacturer also presents similar feature. The information suggests that customers’ demands are diverse and require special attention to manage them. Concerning the initiatives to satisfy customers, this paper will elaborate discussion about the adoption of supply chain logistic management in business.
In order to provide real-life examples, we will present the implementation of supply chain management and its impact on customer satisfaction. 2. Supply Chain Management (SCM) 2. 1. Definition of SCM By definition, Search CIO defines supply chain management as the oversight of goods, information, and materials as they run from suppliers to production lines (manufacturers), and finally reach customers.
Typically, manufacturers deal with a number of inventories that costs the companies if they are not sold immediately.
In order to alleviate the inventory problems, corporations develop supply chain management, which is beneficial to reduce the number of inventory and thus it is assumed that products are available anytime when customers need it. Under such circumstances, supply chain management will enhance time-to-market (delivery time), reduce costs, and enable all parties within the supply chain to manage current resources and plan for future needs.
In Japanese terms, the idea to have time-to-market of products is done through Just in Time (JIT) system. 2. 2. SCM and Customer Satisfaction
Harcourt and Hutchinson further suggests that although companies must have the products and supplies available to generate sales revenue or to provide public services, excess and outdated products and supplies will reduce available funds for investments in plant, people, service delivery, and product development. Therefore, in order to obtain successful SCM, there should be closed collaboration between customers, suppliers, and business partners. In general, there are three benefits that customers will have when corporations practice supply chain logistic management as following:
2. 2. 1. Faster product delivery Suitable SCM will enable customers to have their ordered products faster since the company has direct connection (web-based application) with their suppliers. At British Airways, the airline considers the implementation of supply chain managements as a way to deliver services at the right place, the right time, and the right cost (British Airways, 2006). The needs of deploying supply chain management are driven by situations in airline industry that faces a complex modern aircraft and the far-flung nature of airline operations.
The conditions cause airline to face huge logistic and supply chain challenges. Supply chain operation of British Airways is located at The Link, a site that is located outside Heathrow international airport at London. At that place, the main operation composes of the management of the supply and distribution of components across the British Airways fleet that consists of all things from avionics (aviation electronics) and engine spare parts to cabin lighting and the new Club World seat (British Airways, 2006). 2. 2. 2. Updated information
Customers of service companies like DHL and FedEx can trace their packages by logging into the corporate website. This condition will enhance customers’ satisfaction since customers of FedEx service do not have to be worried if the goods will be damaged or lost since FedEx provides insurance for the goods and has provided online tracking. To be precise, FedEx that exists in more than 200 locations must deal with 6 million packages and documents. Some of them are delivered to places that FedEx does not have branch offices.
The situation suggests that FedEx manage their supply chain with their partners (local delivery Service Company) to enable customers of FedEx to send packages anywhere. Another thing that makes FedEx being very effective and efficient is services diversification in which FedEx offers various services including shipping to logistics management. 2. 2. 3. Exact Financial Flow At some business, customers can continue subscribing a service if they have paid their subscription fee on time. When corporate incorporate SCM, customers can find out their payment schedule so that it avoid early termination (Search CIO, 2006).
Reference British Airways. (2006). Supply Chain Management. Retrieved July 5, 2007 from http://www. britishairwaysjobs. com/baweb1/? newms=info152 Carbo, Bob. (1999). Align the Organization for Improved Supply Chain Performance. Retrieved July 5, 2007 from http://www. ascet. com/documents. asp? grID=197&d_ID=985 FedEx. (2006). About FedEx. Retrieved July 5, 2007 from www. FedEx. com Supply Chain Management. Retrieved July 5, 2007 from http://searchcio. techtarget. com/sDefinition/0,,sid19_gci214546,00. html