UT Knoxville BUAD 331 - Chapter 2 (22 pages)

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Chapter 2



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Chapter 2

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Pages:
22
School:
University of Tennessee
Course:
Buad 331 - CBM I: Supply Chain Mgt
CBM I: Supply Chain Mgt Documents

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BA331 Supply Chain Management Chapter 2 Shay Scott Ph D Department of Marketing and SCM Managing Director Global Supply Chain Institute University of Tennessee sdscott utk edu Competitive Advantage Customers Needs seeking benefits at acceptable prices Your Company Shay Scott e Va l ue lu Va Assets and utilization Cost differentials Assets and utilization Competitor 2 Product MARKETING Supply Chain Operations Supply Chain Marketing Interface Promotion Price Place customer service levels Inventory Logistics Production lot sizes Purchasing Order processing and information 3 SCM IS Customer Service Ordering a book on Amazon Going to the Apple store to get a MacBook Eating at your favorite restaurant Calling customer service for your credit card Getting your computer repaired Availability Cost Quality Speed Shay Scott 4 Do Not Underestimate the Power of the Obvious Do not program your customer service standards on what you or your supervision view as customer needs Ask your customers to let you know what service levels they actually require William C O Neill Belwith International Ltd Shay Scott 5 Remember the Great Divide need product Plants need product A B C Manufacturer D C s Distrib Network Product Focused Efficiency metrics Economies of scale and scope 6 We need 3 product A 2 product B 6 product C NOW The Great Divide Focused on customer Satisfaction metrics Relevance So what I lost a customer Types of Potential Customers Number of Lost Customers The dissatisfied lost customer 1 Potential customers not gained due the lost customer s Word of Mouth dissatisfaction 8 Potential CONVERTS of Potential Customers lost by his her Adverse Impressions 16 TOTAL LOST CUSTOMERS 25 1 customer 1 order 50 per month for 10 years 6 000 25 customers 150 000 lost revenue All for an issue that could have been fixed for much less Shay Scott 7 Delivering Customer Value Custom er Value Shay Scott Perceptions of Benefits Total Cost of Ownership Quality x Service Cost x Time 8 Customer



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