How Consumers Affect Supply Chain Management

How Consumers Affect Supply Chain Management

customer-payment

Consumers have previously had very little influence on the supply chain as they were not fully aware of what it was and any of its processes. A consumer who ordered an item would have no idea where the item was made, who made the item, under what conditions or when to expect delivery. Nowadays consumers play an important role in the creation of the supply chain. Consumers now have access to information on all these areas and have therefore gained unprecedented influence over supply chain management.

The consumer is the key figure in the supply chain and their needs and opinions will affect the supplier’s decisions. Retailers, shipment and corporations alike are changing the way they operate, all because of the customers they service.

Order Tracking

Deliveries are always subject to many variables. For instance, if a factory burns down the customer’s purchase can be expected to be substantially delayed. Ahead of online retailers tracking orders through the internet and allowing their customers to do the same, consumers had a lot fewer expectations when it came to delivery times and expectations.

The ability to track orders has increased consumer expectations, forcing companies to pay close attention to potential supply chain problems. If a company has a supply chain problem that could affect their delivery times, they need to find a solution as quick as possible. If these issues are not resolved customers may cancel their orders and buy from other competitors offering a better supply chain experience.

Dedicated Supply Chain Management

The majority of e-commerce is still business to business rather than business to consumer, although consumer expectations still affect the supply chain. For instance, if a customer purchases a faulty product at a store and makes a complaint, the company that supplied the product to the store would have to trace the faulty product through its supply chain to find the issue. Tracing these faults can be easily handled by a member of the supply chain management team and because of consumer expectations, many companies are now employing supply chain management or entire departments to handle any issues that arise to deal with them quickly and efficiently.

Sustainable Practices

Consumer demand for more sustainable business practices can have significant supply chain implications. For instance, mobile phone purchasers typically consider four key factors into consideration when buying a new phone: the desire to upgrade, the need to stay within a budget, the durability of the product and environmental sustainability. Although some consumers on a tighter budget may be inclined to pay less attention to sustainability issues, some consumers are willing to pay more money for a product they consider to be more sustainably efficient. If a company’s supply chain is found to have questionable environmental or labour practices, consumers who prioritise sustainability will look elsewhere.

warehouse-worker

Shipping Bonuses and Advantages

Many companies such as Amazon and Walmart offer free shipping and although this strategy has attracted millions of people it has also created competition against more adaptable marketplace sellers leveraging Shopify and eBay. Unfortunately, offering free shipping has much deeper financial implications and although large corporations like Amazon and Walmart can afford this, most other retailers can’t afford to forfeit the costs of shipping to draw extra customers.

Smaller companies have therefore had to begin to distinguish their services in other ways, providing better, more personal and bespoke services and utilising social media to create an enhanced customer experience. When these smaller retailers do result in competing on price, they are forced to optimise their logistics processes to keep margins intact, a helpful move in the longevity of their company.

Increased Demand for Qualified Warehouse Workers

Distribution centres are now required to complete more tasks in less time in order to fulfil the demands of the consumers. Improved software and technology make these tasks much easier to achieve, although people are still needed for hand picking, packing and other order fulfilment services. As a result of this, there is an increased demand for efficient warehouse workers who can handle the fast-paced duties of a distribution centre. If you are looking to work in the heart of modern business, consider the Diploma of Logistics qualification (TLI50415). This nationally accredited qualification prepares students to manage various functions in the logistics industry including freight, supply chains, transport, inventory and other areas.

Increased Volume of Orders

With the increased volume of online orders, distribution centres are no longer focused on delivering large pallets of products to stores directly. Instead, they must be able to handle the orders from the stores as well as small orders at a consumer level. Warehouses must be able to process small to mid-sized orders to ensure both the customers and merchants are taken care of. The inventory for all of these processes must be accounted for at store level, in the warehouse and in the company as a whole. Streamlined communications across the whole of the supply chain is necessary to keep all products where they need to be and accounted for at all times.

 

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