Manufacturer/End-User Relations - Research Paper Example

Internal integration, for instance between marketing and logistical functions has shown that organizations were able to achieve interdepartmental effectiveness. This is evidenced in performance attributes such as reduced in cycle time, better in-stock performance, increased levels of product availability and improvements of order-to-delivery lead times. Firms with higher integration are better able to meet special requests of customers and as such customers have a better perception of them (Harrison& Van Hoek 2011).

Integrating customer value into the supply chain as a concept attributed to demand chain management that differs from supply chain management. This features the flow of the product where partners share costs and utilize profits together. Demand chain management essentially involves increasing customer satisfaction as competition conditions increase and at the same time being able to meet the ever changing needs of customers. Organizations spread customer expectations all along the supply chain as demand is being met (Diren et al 2013).

Companies will have a large base of suppliers which implies that they all have to be differentiated and suitable practices applied so as to use supply chain management resources effectively. . rt of developing an effective strategy where arm’s length is adopted to achieve the lowest price possible while strategic alliance is adopted where organizations wish to create a monopoly (Harrison & Van Hoek 2011). When an organization embarks on integrating the supply chain, they are faced with decisions such as where to locate manufacturing facilities and distribution centers; where for example if the organization chooses to create a consolidated network they are able to achieve lower costs with regards to inventory and facility.

On the other hand, they will be less responsive to customers’ needs as they will be far from them along with incurring higher service costs and higher transportation costs. Therefore, it becomes clear that the factors that determine supply relationships create conflicting objectives (Sabri & Shakhi 2010). This is because customers expect their changing needs to be met with immediacy while manufacturers desire the lowest costs possible. For instance, moving manufacturing facilities to countries with cheap labor implies that end product will be farther away from customers.

If certain aspects or features of a product need to be changed, it becomes challenging because of logistical considerations. Placing the manufacturer and customer closer together, which is essentially embracing just-in-time concept, calls for elimination of middlemen where both parties are in direct contact. This allows for organizations to reduce inventory costs as there is no stockpile, products are made with the exact demand in mind. This allows for customer responsiveness as the organization is better able to meet the demands of the customers as and when they arise.

Demand uncertainty is minimized hence business processes are streamlined with the major advantages