IT Infrastructure will lead to information availability that provides customer taste to supplier that leads to supplier’s responsiveness and efficiency because supplier forecasts customer demand and only supplies required product (Sunil Chopra and Meindl, 2007). A case in point is on Swedish post office that started a programme to involve their customers in developing new transportation services. The company was losing its customers and wanted to know about needs and wants of customers to satisfy them. Managers decided to conduct direct meetings with their customers to provide services in accordance with customer demands. This process was done through exchange information between company and customers. After knowing the customer demand they started their transportation services and use one vehicle instead of five and pollution problem also reduced that resulting in increased efficiency (Lundkvist and Yakhlef, 2004).
Improved cost efficiency of a firm can be achieved through direct information sharing between firm and customer. Continuous conversation with customers plays a vital role in strategy development that resulting in creation a planning team for company. A company can identify its customers for strategic planning input through:-
• Use 80/20 rule – the company must in conversation with specific top 20 percent customers that generate 80 percent of company income.
• Choose the companies in different conversation channels.
• Choose that company that considers company’s products for different applications.
• Continue with companies that want to continue with.
The conversation in above four steps can be done through following Marketing department, Customer service manager, Sales staff and CEO’s conversation
Over the long run, the cost of one driver — information — continues to drop while the cost of the other three drivers continues to rise. Companies that make effective use of information to increase coordination internally and externally with their supply chain partners will gain the most customers and be the most profitable. The table below summarises what can be done to guide the supply chain drivers toward responsiveness or efficiency.
When to be Efficient and When to be Responsive
Efficiency is good — Efficiency drove the economy of the 20th century. The push for efficiency increased productivity and lowered the prices of products from automobiles to home appliances thus making them available to a wide segment of the population. Efficiency requires predictability and stability.
Efficiency is best when producing relatively simple commodity products and services that sell in more predictable and stable markets.
Responsiveness is what drives continuous innovation in products and technology and continuous change in the ways we organize businesses and serve customers. Customers want products and services that respond quickly and meet their needs and desires. A case in point is on Apple and Starbucks who don’t sell lowest priced phones, laptops or cups of coffee, but people value and pay for the quality and experience offered by those products. Home delivery of everything from clothes to groceries costs a bit more, but people value and pay for the responsiveness and convenience of those services. Responsiveness is best when producing more complex and unique products and services that sell in continuously changing markets shaped by evolving technology and new customer needs and desires.