Dream Beauty Company (DBC) produces and supplies beauty products. The company provides its services across the United States. The company’s supply chain costs have been rising gradually and this has attracted a lot of concern from the management. The company’s management has consequently drawn their attention to this sector. The management speculates increase in sales as the main cause of the rise in costs but do not rule out on other factors (Bowersox, Closs and Cooper, 2011).
Why the Supply Chain Costs Seem Skewed
DBC incurs significant costs in its supply chain. The costs account for 40% of the total sales made by the company. The company’s costs of supply tend to be positively skewed as they show a tendency to increase in relation to increase in sales am…………………………………………… Kindly order to have the other part handle for you
From the above cost break down, it is visible that most of DBC costs are directly related to the amount of units produced and sold. This hence produces a positive skew of the costs in relation to increase in sales and production. For example, delivery costs accounts for the largest portion of the total costs and is directly related to the number of units produced and sold. Wang, Heng and Chau (2007), ………………………………….Kindly order to have the other part handle for you……………………………………….. tend to increase with activity level in the supply chain. The company has however managed to hold the packaging costs constant and is not influenced by the level of activity.
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The company’s approach on its supply chain channels managem”””””””””””””””””””””””””””””””””””””””””””””””””””’ kindly order butor to the skewed costs. There is need for the management to implement new cost allocation plan in a bid to lower the current costs (Bowersox, Closs and Cooper, 2011).
Recommendations for a New Customer Service Policy
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According to Roberts and Zahay (2011), the profitability of differentiating customer emanates from first identifying where more value can be accrued and then using appropriate design and strategy create the value. ………………………………………………………………………..Kindly order to have the other part………………………………………………………………..his customer service model is more advantageous to less valuable customer and disadvantageous to more valuable customers. This policy equalizes more loyal and less loyal customers. For example, customers who are loyal to the company and seldom file complaints are provided with equal level of services as the ones who have less loyalty.
Harrison, Lee and Neale (2004) indicate that all customers are essential to business organizations. However, dependable fiscal approach suggests that service should be distinguished regarding different customer groups, their distinct needs and profitability. This enables the company to know what creates value to a specific customer group. Harmonizing customer service policy acros……………………………………………………………………………………………………………..Kindly order to have the other part ……………………………………………………..will be characterized by customized services for different channels participants. The services should be differentiated in a nondiscriminatory manner. Service differentiation should focus on providing a service that match specific needs of the customers.
Differentiating stock replenishment programs is one of the most articulate segmentation strategies adopted by most successful companies today. Embracing a differentiated restocking program helps an organization to retain most of its profitable customers and achieving more loyalty from the less loyal customers. Every company has different channels of supply whose stock and order requirements vary …………………………………………………………..Kindly order to have the other ………………………………………………… of the sales while the convenient stores and mass merchants account for 30% and 20% respectively. The company, however, uses an identical fulfillment cycle to all.
Differentiation on …………………………………………………………………………………………………………………………….. Kindly order to have the other part-ordering costs of the customers. This is because the customers would be provided with the most reasonable stock replenishment strategy that perfectly fits their consumption. Maintaining uniform restocking programs tends to cut the company’s cost in the short run and may lead to loss of prominent and loyal customers in the long run (Banasiewicz, 2013).
