The supply chain management of production planning and sustainable customer relationships

Neil Towers and Ruth Ashford

Management Research News

2001, Vol 24, No 12

 

1)      Supply Chain Management

  1. a) Sought to create streams of activities linked between producer, customer and supplier
  2. b) Interconnecting activities with a flow of materials and information, led by the customer
  3. c) Goal: to link to the market, distribution channels, manufacturing processes and procurement in a way that services customers at higher levels, but lower cost
  4. d) Dependency between each link to service end customer

2)      Customer Orientation

  1. a) Relationship marketing characteristics:
  2. i) Interaction
  3. ii) Collaboration

iii)     Customer service

  1. iv) Processes
  2. v) Quality
  3. b) Relationships have the dimensions of time, purpose, intent to build loyalty retention, this is similar to the principles of supply chain management

3)      Planning and control

  1. a) Environmental concerns
  2. i) Increasing product design
  3. ii) Reduced product life cycles

iii)     Enhanced customer expectations

4)      Mutual relationships

  1. a) Commitment and trust are the sources of mutual relationships
  2. b) 3 concepts to be considered
  3. i) concern
  4. ii) trust and commitment

iii)     excellent service

  1. c) Types of relationship involvement
  2. i) Reciprocal

(1)   A strong relationship achieved by trust and commitment

(2)   High production efficiency

  1. ii) Tiring

(1)   Relationship has eroded due to inadequate production control

(2)   Service levels and trust are depleted

iii)     Eroding

(1)   Possible erosion of a previously distinguished relationship

(2)   Low production efficiency

(3)   Customer requirements are not always met

  1. iv) Terminating

(1)   Short term view

(2)   Excessive residual stock

5)      Key findings

  1. a) Internal short-term planning controls support customer relationships
  2. b) A sound relationship between sales and production is essential
  3. c) There is a need for compatibility between customer requirements and the capabilities of the firm