The key idea expressed in this case study is that the participants of the supply chain should take into account the views and perceptions of other partners while developing their policies and strategies (Bowon, 2005, p 271).
It should be noted that the key purpose of this study was to determine whether positive perceptions of the distributor’s initiative affect the satisfaction of both suppliers and customers.
The results of the survey confirm the initial hypothesis, advanced by the authors; moreover, they indicate that the participants of supply chain (customers and suppliers) attach importance to expenditure reductions and revenue enhancement since these initiatives of the distributor are related to the transactions and subsequently their bottom line (Bowon, 2005, p 272).
The conclusions of this analysis can be of great avail to supply chain managers since they explain the priorities of customers, suppliers, and distributors. Nonetheless, one should not suppose that they are applicable to every kind of business. According to this study, process improvement or performance measuring are insignificant to the customers and suppliers.
Yet, the attitudes of customers and suppliers may also depend upon the type of industry. For example, if we are speaking about the electronic commerce companies such as Amazon, we may argue that process improvement can be of crucial importance to the customers since this initiative can increase the speed of delivery and order processing (Schniederjans & Cao, 2002. p 35).
As a matter of fact, continuous process improvement is a critical success factor for such enterprises and their clients do not always regard it as insignificant. Yet, the research methodology, proposed in this study can be of great use to supply chain managers since it allows them to make important decisions on the basis of scientifically-based findings, rather than conjectures.
At this point we need to discuss the implementation and implications of VMI (Vendor Managed Inventory) techniques and processes as they have a strong effect on every participant of the supply chain.
The key peculiarity of VMI models is that the suppliers (i. e. manufacturers) are primarily responsible for the inventory of the distributor (Schorr, 1998, p 145). The adoption of VMI possible is possible only when the companies have a well-developed EDI (Electronic Data Interchange) system which gives online visibility of the distributor’s stock.
The adoption of such model will be received favorable by both the suppliers because they would to lower manufacturing costs. Secondly, such an approach will enable the distributor to set lower prices for the goods. Such companies as Wal-Mart or Kmart implemented this system more than a ten years ago, and it greatly contributed to their growth (Schorr, 1998, p 145).
The results of the analysis, presented in the case study can help the managers who try to map out the strategies of an enterprise. The research has demonstrated that revenue enhancement and expenditure deductions positively affect the satisfaction with the supplier’s job. Therefore, the managers should attempt to improve those aspects of the company’s performance which are directly related with the costs.
For instance, by minimizing the cost of transportation, storage, or inventory turnover, the distributor would be able to set lower prices for a product, and this improvement initiative will definitely appeal to the customers. As it has noted before, the adoption of VMI model help the manufacturer to minimize the cost of production. Therefore, these innovations are likely to increase the suppliers’ and customers’ satisfaction with the distributor.
Reference List
Bowon. K. (2005). Supply Chain Management in the Mastering Business in Asia series. NY: John Wiley & Sons.
Schniederjans. M. & Cao Q. (2002). E-Commerce operations management. NY: World Scientific.
Schorr . J. (1998). Purchasing in the 21st century: a guide to state-of-the-art techniques and strategies. NY: John Wiley and Sons.