Value Chain Management

VALUE CHAIN MANAGEMENT

AND THE

CONSUMER PRODUCTS INDUSTRY

CHAPTER 1 - INTRODUCTION

Background

Value chain management applies to business-to-business commerce, but in today's modern day market places, it is seen that consumers are not taken into consideration under three circumstances: when manufacturing a product, the service experienced at a retail store, or what values a consumer relates the product towards, and guarantee a return purchase. The business-to-business value chain management has grown into a business-to-consumer management. In all cases management chains must be integrated and operate in a seamless manner, but must also be made to order to specific consumer requirements.

Statement of Purpose

This paper will analyze the impact of value chain management on retail customer relationships, consumer values, and manufacturer relationships. The report will discuss how management works in these factors by implementing strategies that include the consumer's attitude, giving the retailers sufficient product knowledge, and building the product to customize. Companies use the Internet which studies show how to sell the product, where and to whom. All these factors will produce a profitable, customized and focused company who meets the wants and demands of their consumers.

Scope

The report will discuss how companies notice customer values and know what techniques are used to create a correlation from the buyer to the product. Management from retailers must implement customer service and order inventory to ensure a full stock. Manufacturers seek customer relationship by eliminating the middle man (retailer) and selling via internet. Researching finds new trends seen in the market and the manufactures therefore create to customize to the consumer. I will not discuss any Internet software programs being used among the mentioned companies involved.

Limitations

The amount of time allocated for the research paper due to the 6-week time frame. No primary research was used in this paper.

Methods of Research

The method of research for this paper is secondary research. Reference sources include: ProQuest and Emerald located at the John F. Kennedy Memorial Library at California State University, Los Angeles.

CHAPTER 2 - FINDINGS

Retail Consumer Relationship

Employees must keep the motto of "the customer is always right," When emotions are involved employees must shine to implement the store's message because even if the product may be/look nice in the marketing campaign, if the employees can't deliver it won't matter. "When employees fully understand the parameters they operate in and can trust their employers to stand by these criteria, then they become endowed with a self-confidence that's quite liberating... the employee can act to solve the customer's problem then and there." (Gordon, 19) Customer service creates value in sales and sales create the supply and demand in consumer products. Retailing is basically the final link between the production and the goods and the end consumer.

Traditionally, the role of the retailer has not always been recognized or appreciated. "At its simplest, the retailer's function is to buy goods in anticipation of consumer demand, collect and store these and make them available when required." (Runciman, 49) Inventory for a retailer is primary towards a sale. Kurt Salmon Associates were commissioned to conduct a supply chain analysis. The results of the study showed the delivery time for the apparel supply chain, from raw material to consumer, was 66 weeks long, 40 weeks of which were spent in warehouses or in transit. The long supply chain resulted in major losses to the industry due to financing the inventory and lack of the right product in the right place at the right time.

Consumer values

What is it that makes consumer purchase? "Consumers are interested in a wide variety of products and they want immediate gratification and convenience. Those needs lead to a supply chain that must be very efficient." (Hill, 38) Companies now think from the consumer up, rather than form the factory down. Levi's present's shoppers with customization services such as 3-D body scanning, laser etching, hand painting, fabric ornamentation and embroidery, and shrink-to-fit. The marketing teams at many corporations have to know the updates on current trends and hot picks of the season. Items like these can not be mass manufactured because each person is individual and tends to work on pull system, where each item is pulled when needed.

Manufacturer consumer relationship

The technology of today needs to be feasible to all customers, for example: e-commerce. Technology is the simplest solution to an accurate supply and demand on inventory. The adoption of UPC codes and point of sale (POS) help in store inventory, but the e-commerce strategize to minimum lead times, resulting in minimum inventory levels throughout the pipeline. With the use of the internet, product requirements and specifications can be distributed from the buyers to manufacturers in a real-time fashion.

The internet creates a more knowledgeable consumer with a lot more choices and