TERM PAPERThe Impact Of SCM On Customer Satisfaction Supply Chain Management Submitted to: Professor Khadija Submitted by: Shawana Anjum (MBA) .... 11 2............................................................................... 12 CONCEPTUAL MODEL FOR SUPPLY RELATIONSHIP QUALITY .................................................... 12 6-Cooperation: ...........................................................................................................................................................................................................................Trust: . 5 LITERATURE REVIEW ...................................................................................................................... 12 4.......... 6 DIMENSIONS OF SUPPLY CHAIN RELATIONSHIPS ...................................................................................................................................................................................................... 11 1.................... 18 2|Page ............................................................................................................................................ 4 PROBLEM STATEMENT.......................................................................Dependence: ................................................................................................................................................................................................................ 17 REFERENCES .....................................................................................Commitment: ............................ 12 5..................Communication: .................... 13 RESEARCH FINDINGS .....................TERM PAPER TABLE OF CONTENTS TABLE OF CONTENTS..................... 14 CONCLUSION ............................................................................... 3 INTRODUCTION ...................................... 11 3.................................................................................................... 3 ABSTRACT .......................... 2 THE IMPACT OF SUPPLY CHAIN MANAGEMENT ON CUSTOMER SATISFACTION .............................................................................................................................................................Conformity: ............................. Speed. 3|Page . The study concludes with a discussion on these variables. In a fast-growing systems business such as fast food industry. the supplier needs to be able to adapt its offering to a wide variety of customer situations and needs. A supply chain adapts the changes if it is responsive in nature and customer satisfaction is considered to be one of the important criteria for the quality maintenance. quality and flexibility are being emphasized as means of responding to the unique needs of customers and markets. as it is found that the supply chain management has direct relationship with customer satisfaction. The aim of this paper is to represent the impact of supply chains on customer satisfaction.TERM PAPER THE IMPACT OF SUPPLY CHAIN MANAGEMENT ON CUSTOMER SATISFACTION ABSTRACT All organizations or institutions provide goods or services to customers with other organizations cooperation. Understanding the customer’s situation and need together with the right offering contributes to good co-operation in improving the supply chain. To cope up with market instability. Good relationship between the customer and the supplier contributes to reliable information flows. which further leads to high customer satisfaction. companies now look beyond cost advantage. and reliable information flows in turn leads to high efficiency. product service. Valipour. Moosavi. 2009). The existing business environment is very different from the past and the competition has a unique role (Gilaninia & et al. Valipour.TERM PAPER INTRODUCTION Today’s management identified the customer satisfaction as the major item in business and indicated that the company's success depends on improving management relationships. this study presented the definition of supply chain management. now it has be done by the supply chain. distribution. 2006). Rashidi. development and quick changes has compelled the organizations to overcome the competitors by taking more attention on systems that influence the progress of organization activities (Shekari. delivery. 2010). 4|Page . Rashidi.New forms of structural reforms. Akhondi. 2010).2011). Fatollahi. and then investigated the relationships between suppliers and customer satisfaction was investigated. material preparation. production and product planning. maintenance and inventory control. Activities such as supply and demand planning. new approaches and attitudes about supply chain management have developed. In general. Javanshir. Supply chain management is a fact that provides the fast and reliable service with high quality and lowest cost to customers (Maboodi. Therefore. the supply chain is composed of two or more organizations that are typically separated and related to each other by the information and financial flows (Maboodi. In the present competitive market. Sayadmanesh. competitive and exchange process causes communication concept for the long-term relationships between buyers and suppliers (Seyedi. Therefore. Heidari. customer service which used to be performed by company. A key issue in the supply chain management is to control and organize all these activities. Javanshir. Companies and organizations should be given special importance to customer satisfaction and build strong relationship with the buyer of goods.TERM PAPER PROBLEM STATEMENT To develop and survive in economic competition. supplier and customer interact together in a coordinated way and using sharing and full information communication. In this age of global rivalry. Customer demand for high quality and fast services has increased pressure on companies. the various products should be available according to customer's request. This rapid flow of information among the chain elements enables them to create an effective supply chain. Organizations have used different ways to review and revise their strategies and found the satisfaction of customer as the key of survives. so that the companies cannot manage all things alone. The customer is said to be the centre of all marketing activities. For effective supply chain management. 5|Page . Senior management knows well that their success in achieving the overall goals of the organization is customer satisfaction. The term “supply chain management” has been studied seriously from early 1980 and many researchers provide a framework and model for it. Chris Voss and Sean de Burca (2005) considered the effect of supply chain relationships on quality performance and concluded that ‘Is it possible to measure the multidimensional nature of supply chain relationships in terms of a higher order construct?’ Define supply chain management by analyzing concepts into both supply chain and supply chain management terms (Gilaninia & et al. This means that traditional manufacturing requires long lead-times to resolve conflicts between different jobs or actions that require the same property. Stalk describes companies as systems and says that competitive advantage can be achieved by breaking the “debilitating loop strangling traditional manufacturing planning”. Long lead-times make the correctness of sales forecasts decline. The long lead-times require sales forecasts to guide planning. Time-based management and the relationship between speed and efficiency has been one of the major issues in supply chain management literature during the 1980s and 1990s. the result of study was distribution management. 2011). Supply chain management is the result of the logical development.. 1996) by illustrating how the competitive advantage of Japanese manufacturing industry changed from low labour costs—through scale-based strategy. Stalk (1988) describes how time has become one of the most important ingredients of competitive advantage in manufacturing industries. He describes the background for “Japan’s secret weapon” (Womack et al. His main results are experimental indications of a strong positive correlation 6|Page . The planning loop widens. 1995) has empirically studied the efficiency prospective of speed in operations. Holmström (1994. and creates system inefficiencies. Forecasting errors increase inventories and the need for safety stocks at all stages. increasing the lead-times for the scheduled jobs. increases delays. drives up costs. focused factory and flexible manufacturing—to time-based competitive advantage. 1991) or “lean thinking” (Womack and Jones. Errors in forecasts mean more unscheduled jobs in the production line.TERM PAPER LITERATURE REVIEW Brian Fynes. In the 1960s. experts defined the internal relationship between the storage and transportation. 1989). 7|Page . This refers to the fact where orders to the supplier tend to have larger inconsistency than sales to the buying organization and the distortion propagates upstream in a bigger form. One of the main system issues in supply chains is industrial dynamics. the first step in devising an effective supply chain is to consider the nature of the demand for the products. The structure of a system tells how the parts are connected to one another. and in taking action on the decisions. Uncertainty and the nature of the forecasting problem have a significant impact on the supply chain structure. Information-feedback systems owe their behaviour to three characteristics— structure. they fall into one of two categories: primarily functional or primarily innovative. He claims that the main supplier to uncertainty in slow operations is deformed communication in the activity system. innovative products require an essentially different supply chain than stable. According to Fisher (1997). This phenomenon is related to the information flows among the members in the supply chain. Delays exist in the availability of information. Each category requires a clearly different kind of supply chain. solutions to the problem often involve growing the abilities of companies to co-ordinate activity and cut lead-times. low-margin functional products.TERM PAPER between speed and efficiency in manufacturing and that a focus on speed of operations helps to depict and remove self-induced sources of uncertainty. If products are classified on the basis of their demand patterns. Information flows in terms of orders have a direct impact on the production scheduling. delays and amplification (Forrester. in making decisions based on the information. 1961. Sterman. Fisher argues that with their high profit margins and unstable demand. Based on his findings of a “speed threshold” he suggests that inventory obligation needs to be compact to a point where demand distortion is diminished and a harmonization of production with demand is possible in order to improve performance by speeding up operations. Amplification usually exists throughout systems and it is observed when an action is more powerful than might seem to be implied by the information inputs to the system. inventory control and delivery plans of individual members in the supply chain. Consequently. 1985. Suppliers should be chosen for their speed and flexibility. 1989). not for their low cost (Fisher. 1993. and transporting all of them from one point in the supply chain to the next. Less noticeable but equally important is market mediation (demand knowledge). the purpose of which is to ensure that the variety of products reaching the marketplace matches what consumers need. Most important in the environment for innovative products is to read market signals correctly and being able to react quickly during the product’s short life cycle. 8|Page . The critical decisions about ability and inventory are not about minimizing costs but where in the chain to position inventory and available production capacity in order to get around against uncertain demand. 1996a). Texts on supply chain structure normally recommend that great benefits could be achieved by co-operation between the customer and the supplier and giving the supplier access to the customer’s real demand data. 1997). A supply chain’s physical function is readily obvious and includes converting raw materials into parts. Recent empirical work confirms that investments in relation-specific assets are often linked with better performance compared to more arms-length relationships (Parkhe. Perry. The first step in designing a responsive supply chain is to accept that uncertainty is inherent in innovative products. Transactions between the buyer and the supplier involve negotiations and mutual relationships between buyers and sellers. Modified standardization tends to be the number one customization strategy in this type of industry. components. Productivity gains in the supply chains are possible when firms are willing to make transaction or investments (Williamson. the production function assembles prefabricated components into finished products. Uncertainty can be avoided by cutting lead-times and increasing the supply chain’s flexibility so that it can produce to order or at least assemble the product at a time closer to when demand materializes and can be accurately forecast.TERM PAPER Two distinct types of functions performed by a supply chain should be recognized: a physical function and a market negotiation function. Dyer. The vital flow of information occurs from the market to the chain. and eventually finished goods. Once the configuration has been decided. customer–supplier relationships in which close long-term co-operation concurrently increases the value produced by the demand chain and decreases the on the whole cost of the chain. 9|Page . 1997. which may occur in the form of an organization’s time. Commitment to a relationship is most frequently demonstrated by committing resources to the relationship. These results propose that successful partnerships result when both buyers and suppliers show a willingness to do a variety of assets to a set of future transactions.TERM PAPER Recent SCM and relationship marketing research has attempted to increase understanding of the conditions for win–win partnerships. partnership type of relationships cannot be expected to be built with a large number of customers or suppliers.. Yoshino and Rangan. facilities. 1995). 1997. 1990. 1999). 1997). money. Information sharing refers to the extent to which critical and proprietary information is communicated to one’s supply chain partner (Mohr and Spekman. Bensaou. they are risky given the specialized investments they require (Cooper et al. 1996. These types of resources are often referred to as ‘asset-specific’ resources. 1995. Several other studies have also found a relationship between resource commitment and the joint action or continuity between parties within inter-organizational relationships (Heide and John. i. Two aspects of communication behaviour that address the extent to which the information exchanged is effective in a partnership include information sharing.. Friis Olsen and Ellram. raise and maintain. Also. Lambert et al. Several researchers have come to the conclusion that companies need to divide their customer– supplier relationships into classes along the range from ‘arms-length’ relationships to true partnerships (Moody. Cooper et al. they are costly to develop. and the level of information quality and participation (Monczka et al. Commitment refers to the readiness of buyers and suppliers to exert effort on behalf of the relationship. While true strategic partnerships create new value. 1999). Bensaou. etc. 1997. and focusing the resources on building the right relationships requires careful planning and decision-making.. 1994). Vollmann et al. Both of these aspects of information sharing (quantity and quality) are required to successfully develop supplier partnerships. Therefore.. The number of real partnerships a company can build and maintain is limited.. 1998).e. in that they are directed specifically towards the other party (Dyer. 1993. Interdependence exists when one actor does not entirely control all of the conditions necessary for attainment of an action or a desired outcome. 1987). 1993). These information attributes are closely related and significant in enabling members of a partnership to co-ordinate their activities. 1989). For instance. The earlier mentioned works suggest that successful supplier alliances are linked with high levels of information sharing and information quality and contribution. and credibility of information exchanged (Huber and Daft. 1989). whereas suppliers with control over dealer’s decisions exhibit greater opportunism (Provan and Skinner. which examine the relationship between dependence and control in buyer–supplier relationships (Handfield. Information contribution refers to the extent to which partners connect jointly in planning and goal setting (Mohr and Spekman. Resource dependence can also influence supplier just-in-time (JIT) delivery performance (Handfield. Resource dependence has been explored in empirical studies. Information quality includes such aspects as the accuracy.TERM PAPER Suppliers and customers can form joint development teams to get better various aspects in the supply chain or suppliers can suggest changes that may lead to quality or cost improvements (Clark. timeliness. adequacy. 1994). 1993). 10 | P a g e . dealers are less opportunistic when they depend on a primary supplier. Lakzaie. Valipour. Perhaps the tricky and important issue in supply chain management is to manage relations between the four main characters. Communication is essential for partners’ success (Maboodi. 2007). 2008). trust is the intellect of confidence in the relationship which increases the cooperation of two sides (Vazifedoost. for result enjoyment. According to conducted research by Brian Fynes. 2. Rashidi.Trust: is one of the important structures in the analysis of exchange relations. Chris Voss and Sean de Burca (2005) various dimensions of relationships quality with supply chain are: 1.Communication: is defined sharing formal and informal of important information between partners. communication. understanding the relationship between the mentioned groups and efforts to optimize this relationship is the chief issue in companies. 2010). Suppliers and customers should have the same goals and trust each other (Rajabzadeh. In addition.TERM PAPER DIMENSIONS OF SUPPLY CHAIN RELATIONSHIPS There are four main characters in the supply chain which include: Suppliers Manufacturers Distributors Customers Thus. Shahraki. Many companies supply chain is result of poor communication of expectations and behaviours that occur between characters of the chain (Dehmorde. Khadivar. information and dialogue. the effective management of relationships is necessary in supply chain that suppliers and customers work together in a harmonized. Niknezhad Tehrani. Kazemi. integrated way with observing of partnership principles. Javanshir. 2010). because they have the great effect on all aspects of supply chain and its function level. In marketing literature. 11 | P a g e . Therefore. long-term and base on mutual benefits ( Vazifedoost. 2008). 12 | P a g e . Rashidi. 4. Valipour 2010). processing and analysis of products can reduce production costs and improve the innovation of new product process(Maboodi. 5. Javanshir. Niknezhad tehrani. matching customers with the capabilities of suppliers is called conformity of suppliers relationship. Conformity is occurred by investments in product. Rashidi. Dependence between two companies is the function of transaction amount a company with another company and the amount of benefit which a company receives another company cooperation (Maboodi.Conformity: Compatibility of suppliers with the basic needs of customers and also. Rashidi. Exchange information on production. Javanshir. 2010).TERM PAPER 3. 2010). the strategy of organization should be customeroriented. Valipour.Dependence: Dependence refers to the partners wanted to maintain relationships to attain required goals. Javanshir. 6-Cooperation: is defined as relations between the two companies to achieve the ultimate goals and exchange the Isolation behaviour to partnership. to achieve commitment. process technology and human resources (Maboodi. Valipour.Commitment: Commitment can be defined as a desire to maintain mutually valuable relationships. TERM PAPER CONCEPTUAL MODEL FOR SUPPLY RELATIONSHIP QUALITY communication trust conformity customer satisfaction dependance commitment cooperation 13 | P a g e . TERM PAPER RESEARCH FINDINGS Sample size: 50 Respondents: 48 Response rate: 48/50*100 = 96% Communication among customers of textile products supply chain causes the customer satisfaction communication 25% Yes No 75% Cooperation among customers of textile products supply chain causes the customer satisfaction cooperation 25% yes no 75% 14 | P a g e . 2 15 | P a g e .TERM PAPER Commitment among customers of textile products supply chain causes the customer satisfaction commitment 31% yes no 69% Conformity among customers of textile products supply chain causes the customer satisfaction conformity 81% yes no 3. TERM PAPER Dependence among customers of textile products supply chain causes the customer satisfaction Dependance 25% yes no 75% Trust among customers of textile products supply chain causes the customer satisfaction trust 9% yes no 91% 16 | P a g e . customers should trust suppliers about the product quality and services. communication. increasing customer satisfaction. customer satisfaction is divided to 6 dimensions. They should have the same goals. Supply chain management as the independent and customer satisfaction as the dependent variable was analyzed. All dimensions of supplier relations management including communication. cooperation. on customer satisfaction. concepts and components to identified components that improve competitiveness. To achieve the effective management of supply chain relationships. lower costs and subsequently. The customer satisfaction increase when the supplier relationships increase in the supply chain. Analysis of data collected confirmed the research hypothises. According to research findings. information and dialogue. trust have direct relationship with customer satisfaction. cooperation.TERM PAPER CONCLUSION Analysis of data collected in this research showed that the evaluation of supply chain management impacts the customer satisfaction. increase total profitability as a necessity in the field of economic activities. supplier and customers have to work together in a coordinated. trust. commitment. commitment. conformity. conformity. Based on the supply chain management approach. This paper presented a literature review and evaluation of supply chain definitions. 17 | P a g e . integrated way and observing of partnership principles. dependence) and customer satisfaction. The study was the correlation type and done by field method. customer’s requirements are provided by other parent suppliers. Communication and dependence have the highest and lowest effect respectively. services provided. Using customer satisfaction management system and Coordination with other parts of the supply chain is positive step in improving knowledge of customer requirements and achieving better performance. Results showed that there is significant relationship between supply chain dimensions (communication. product quality. dependence. and attract mutual trust each other. Also. not by final product delivered to customer. J. School of Mechanical Sciences. FIN-02015 Hut. sahar khanjani5. mohammad taleghani2. Faculty of Management Master of Supply Chain Management. Box 9555. Dr. J. Second supervisor: Prof. samaneh jalilvand4. elham shadmani7. W. fatemeh zadbagher seighalani9 Impact of Supply Chains Agility on Customer Satisfaction Dr. P. Semeijn 18 | P a g e . Finland Supply Chain Flexibility aspects and their impact on customer satisfaction Open University the Netherlands. Th. seyyed javad mousavian3. P.Manders BEng (850071988) Supervisor: Dr.TERM PAPER REFERENCES Impact of supply chain dimensions on customer satisfaction shahram gilaninia1. Indian Institute of Technology Bhubaneswar From supply to demand chain management: efficiency and customer satisfaction Jussi Heikkilä. Akhilesh Barve. Ghijsen.O. maryam sajedi rad6. Assistant Professor. zhaleh shiri8. Helsinki University of Technology.
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