barcode using vb.net Core Discipline 1: View Your Supply Chain as a Strategic Asset in Software

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CHAPTER 1 Core Discipline 1: View Your Supply Chain as a Strategic Asset
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is leveraging manufacturing partners common parts lists, engaging in collaborative product design reviews, and leveraging partner repair capacity in its own spare-parts and service network. Additionally, Tellabs has established its manufacturing agreements to allow for movement of production and repair operations into countries where a local presence benefits market-share growth goals. Third, consider the uniqueness of your internal operations. Do you have business processes or unusual product characteristics that would be difficult for an outsider to replicate If so, you have little to gain by going outside an outsourcer s scale advantage won t apply to your unusual requirements. Wal-Mart, for example, has developed a highly customized internal logistics operation that manages inbound inventory flows from its central distribution centers to the shelves of its retail locations. As the owner of one of the largest warehousing operations in the world, WalMart has nothing to gain and everything to lose by outsourcing this aspect of its operations. Fourth, consider the balance of power between you and your outsourcing partner. Many providers of manufacturing, distribution, and customer-fulfillment services are already larger than their customers. As these service providers consolidate further, they ll gain even more power. Will you get the services that you need at a competitive price if your volume of business isn t high enough To choose the best service provider, go beyond technical criteria and consider the overall business context. Weigh the volume you represent against the service provider s strategy and overall size. You may end up changing your decision about which service providers to use, how to divide the volume among them, and even whether to outsource at all.
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Customer Service Strategy
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Customer service strategy is another key configuration component. Your customer service strategy should be based on two things: the overall volume and profitability of your customer accounts and an understanding of what your customers really want. Both pieces of knowledge are integral to your supply chain strategy because they help you to prioritize and focus your capabilities. Should all customers get same-day delivery, or should you aim for different service levels depending on customer importance Should all products be equally available, or should some customers have quicker, easier access If your company never examines its service strategy, you
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Strategic Supply Chain Management
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may be providing more costly levels of service than your customers need or you may be missing important market opportunities. Not all customers warrant the same level of service, but it s critical to know who your high-value customers are. For instance, an Internet service provider (ISP) was planning to raise the level of customer service across the board in response to complaints about slow problem resolution. We suggested a more strategic approach basing service levels on each customer s value to the company. By analyzing each customer s total revenue potential and strategic relationship value, the company learned that just 5 percent of its clients were high-value customers. What these high-value customers wanted most was rapid problem resolution. Therefore, for this subset of customers, the company set up a customer care account team with highly trained technical people and a dedicated account manager. For the remaining 95 percent of customers, service problems were routed to a separate, cost-efficient service center, with specific resolution pathways depending on the technical complexity of the problem. Problem-resolution time for high-value customers was cut dramatically, with the percentage of problems resolved at first contact improving from less than 5 percent to 80 percent. Even for the lowest-priority accounts, service issues typically were resolved on the same day. In addition, the new setup reduced total customer care costs by 30 percent. More important, the new service levels meant that the company was better able to compete in its chosen market a market increasingly made up of sophisticated customers with higher service expectations.3 The lesson Tailoring your customer service strategy to deliver the best cost/service trade-off by customer segment can pay big dividends, especially as you design your supply chain for strategic advantage.
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