In shifting market conditions, the choice of supply chain strategies is critical when competing to serve customers (Gattorna, 2010). It is accepted in theory that the "one size fits all" approach to supply chain design is no longer valid (Christopher et al., 2006; Gattorna, 2010; Ericsson, 2011; Godsell et al., 2011). Still organisations, even in the highly competitive e-commerce market, utilise a "one size fits all" strategy to create and deliver value to their consumers, thereby implicitly assuming that consumers' demands and buying behaviour are homogeneous, and therefore, there is no profitable reason to differentiate delivery in terms of service.
In retailing, high performance in logistics has been one of the most important competitive advantages for a long time. But in today’s highly competitive environment that does not seem to be enough. ...
Purpose – The purpose of this paper is twofold: first, to empirically test whether a “one size fits all” strategy fits the fashion e-commerce business and second, to evaluate whether consumer returns are a central aspect of the creation of profitability and, if so, to discuss the role of returns management (RM) in the supply chain strategy. Design/methodology/approach – Transactional sales and return data were analysed and used to categorise customers based on their buying and returning behaviours, measuring each customer's net contribution margins. Findings – The e-commerce business collects a vast quantity of data, but these data are seldom used for the development of service differentiation. This study analysed behaviour patterns and determined that the segmentation of customers on the basis of both sales and return patterns can facilitate a differentiated service delivery approach. Research limitations/implications – This research empirically supports the theory that customer buying and returning behaviours can be used to appropriately categorise customers and thereby guide the development of a more differentiated service approach. Practical implications – The findings support a differentiated service delivery system that utilises a more dynamic approach, conserving resources and linking the supply chain and/or organisational strategies with customers' buying and returning behaviours to avoid over and underservicing customers. Originality/value – Consumer returns are often viewed as a negative aspect of doing business; interestingly, however, the authors revealed that the most profitable customer is a repeat customer who frequently returns goods.
Value innovation is a key in developing competitive advantage in most industries. Value innovation is both related to the physical products and accompanying value-adding services. Logistics has evolved from an order qualifier – that is a necessity – to an order winner. Increased focus on the consumer and co-creation with the consumer as a vital partner lead to alignments and rethinking of the channel structure. The supply chain evolves into a demand chain! Deeper knowledge about the why, how, and when of consumer buying behaviour is a main ingredient in demand chain thinking, and the starting point in designing and developing segmented demand chains in the fashion market. These chains are built on partnership and trust oriented relationships. The game of power is increasingly replaced by the game of trust. This is a necessity when the competition shifts from rivalry between companies to rivalry between chains. In this position paper we discuss visions of the fashion future, and how to develop innovative concepts that deliver added value to the consumer. The “old school” of distribution economy, and the concept of convenience, are the basic theoretical grounds, and we argue that innovations could be reached when investing in consumer insights and closer relationships in the demand chain.
The concepts of Supply Chain Management (SCM) and Demand Chain Management (DCM) are among the new and debated topics concerning logistics in the literature. The question considered in this paper is: “Are these concepts needed or will they just add to the confusion?” Lasting business concepts have always evolved in close interaction between business and academia. Different approaches start out in business and they are then, more or less si- multaneously, aligned, integrated, systemised and structured in academia. In this way a terminology (or language) is provided that helps in further diffusion of the concepts. There is a lack of consensus on the definition of the concept of SCM. This may be one of the major reasons for the difficulty in advancing the science and measuring the results of implementation in business. Relationships in SCM span from rather loose coalitions to highly structured virtual network integrations. DCM is a highly organised chain in which the key is mutual interdependence and partnership. The purpose is to create a distinctive competence for the chain as a whole that helps to identify and satisfy customer needs and wishes. The classical research concerning vertical marketing systems is very helpful in systemising the rather unstructured discussions in current SCM research. The trend lies in increasing competition between channels rather than between companies, which in turn leads to the creation of channels with a high degree of partnership and mutual interdependence between members. These types of channels are known as organised vertical marketing systems in the classic marketing channel research. The behaviour in these types of channels, as well as the formal and informal structures, roles in the network, power and dependence relations, etc. are well covered topics in the literature. The concept of vertical marketing systems lies behind the definition of demand chains and demand chain management proposed in this paper. A demand chain may be defined as an integrated and aligned chain built on partnership and mutual interdependence aiming at the creation of a unique competence to identify and satisfy customer perceived value, while demand chain management may be defined as the effort to create, retain and continuously develop a dynamically aligned demand chain.
Most current supply chain models were developed during a period of relative stability. Today, the environment is discontinuous, volatile and unpredictable. This requires a major rethinking and revitalisation of existing supply chain models. Supply chains are much more than warehouses, transportation and technology, they are people powered and have to be treated as social and political as well as economic and technical systems.The most difficult yet challenging and rewarding factor is the change of mindset from approaches based on the old industrial paradigm to the new knowledge oriented paradigm. From "one size fits all" to customisation and buyer behaviour oriented segmentation based on structural flexibility. The new approach requires a change of processes and management systems, but most of all, a change of mindset, organisation structure and behaviour.This may create internal resistance that has to be overcome to reach the desired future state. This future state is highly dependent on cooperation and consensus with external companies, and the next step is therefore to extend the alignment approach to the chosen partners in the demand chain. The development towards channel rather than company competition requires an interorganisational approach to channel design. Internal alignment and cooperation is necessary but not sufficient, which means that an agile and dynamically aligned demand chain has to be created.All this is well known and documented in both research and theory. However, the challenge is to implement these theories, models and behaviour in practice. This paper presents one practical approach to implementation of the theories put forth by Ericsson [Ericsson D, 2011, Demand chain management - The evolution, ORiON, 27(1), pp. 45-81.].
The last decades a new type of business environments has evolved characterized by rapid and volatile demand changes, short product life cycles, and high levels of customized products. The competitiveness of a business in these environments is mostly determined by its responsiveness. This is characterized by the ability to quickly scale up or down the production volume, the presence of an innovative and fast product development, and the quick incorporation of customer requirements into the product development. This paper employs a descriptive single case study approach to illustrate how product development is structured and executed in an international manufacturing company, seeking to realize an innovative, predictable, and efficient product development. The objective is to increase the understanding of how product development and product life-cycles are connected to Supply Chain Management (SCM). Case study findings reveal that the case company after implementing a strategic and structured Product Creation Process (PCP) has improved the efficiency and effectiveness of product development. Findings also reveal that the case company has not yet developed any linkages between product development and SCM. Still, the case company has become aware of this issue due to problems associated with the lack of integration between product development and SCM.
Purpose The purpose of this paper is to increase the understanding of demand chain management (DCM) by investigating how it has been structured and executed in an international manufacturing company. Design/methodology/approach The main emphasis has been on producing descriptive results and the applied research strategy has been an embedded single case study. The case organization originates from Sweden, but it has significant international presence. Empirical data have been collected mainly from in‐depth interviews with key persons representing senior management in the case company. Findings This research shows that DCM is about developing synergies between the demand creation and the demand fulfillment processes. A completely implemented DCM approach should incorporate all the major demand creation and fulfillment processes. This kind of fully implemented approach probably does not exist in real life today but some companies have started to develop versions including some of the major processes, and this research provides an example of this. The ultimate goal of DCM is to gain competitive advantages by differentiating not only the products, but also the delivery process. This is necessary in markets characterized of intensive competition, high product variety, large amounts of customer‐adapted products, and short product life cycles. It can be concluded that DCM is not another name for demand driven supply chains (SCs) or a fad. It is rather a way to finally benefit from decade long marketing discussions on how to achieve customer focus. It highlights the interplay between marketing and supply chain management (SCM) as an enabler of value creation. Research limitations/implications This research work is limited to one Swedish company; however, the case company has large international presence and is in top three in their industry measured by sales, which provides some ground for the generalization of the research. Practical implications This paper gives an insight for managers and practitioners to the value of coordinating marketing and SCM to develop a truly customer‐driven organization and SC. Originality/value Several studies have addressed the synergies between marketing and SCM but failed to address how to in some detail realize this in practice. This paper contributes by discussing how to realize this coordination in practice.
Supply chains satisfy customers by striving for delivering the right products to the right place at the right time, atthe right quality and at the right quantity within an increasingly faster pace and lower cost. One implication thatcan be made from this is that the nature of markets is the point of departure in both supply chain design andoperations. Given that organizations usually offer a wide range of products and services with different supplyand demand characteristics, one could argue that organizations conduct business in various types of noncoherentbusiness environments. There has been a recognition that ‘one-size-fits-all’ supply chain strategies onlysatisfies a limited number of business environments, and that it is increasingly necessary to develop severaldifferentiated supply chain strategies to satisfy all major business environments in a better way. This paperemploys a descriptive case study approach to illustrate how a case company develops differentiated supplychains based on customer insights. Case study findings reveal that one efficient way to develop differentiatedsupply chain strategies is to combine different supply and delivery methods into supply chain solutions. Bycombining relatively few supply and delivery methods it is possible to develop several differentiated supply chainstrategies.
In the literature several authors argue that there is a need for a new generation of logistics management since the business environment has changed. This new management philosophy identifies consumers and their requirements as starting point for all supply chain activities and has more properly been termed Demand Chain Management (DCM). The purpose of this paper is to analyze if DCM should be regarded as the next generation of logistics management and furthermore to illustrate its usefulness in practice through case study of Swedish appliance manufacturer. Literature review and case study findings show that DCM is not merely a development of the logistics principles, but rather an integration of marketing and supply chain operations. It is needed in volatile and consumer-oriented environments, which require higher levels of customized products, faster product development and commercialization together with supply, manufacturing and distribution on demand.
The management philosophy of Management by Holistics (MbH) is addressed, where attention is paid to achieve a balance between four vital resources: human, capital, materials and information. The approach focuses on the fact that “the whole is greater than the sum of the parts” and is based on the conviction that everyone in an organisation needs clear‐cut goals. A model for the implementation of this management approach is defined with reference to Swedish industry.
Over the years billions of dollars have been invested in new and more advanced production and handling equipment and in computer systems for the efficient control and utilisation of the resources.