The Supply Chain Revolution

a company’s ability to provide excellent customer service depends to a large extent on its operations—its ability to deliver a product or service quickly and as promised, or to replace or return a defective product quickly

Companies embrace customer service as a way to stand out from the competition when product differentiation is low or customers are fickle

Customers tend to be loyal to businesses that have great customer service, and many are willing to provide referrals to their friends, family, and colleagues

They are all known for excellent customer service

or example, construction workers spend idle time at jobs because of unforeseen work stoppages such as unavailability of materials. The idle time is a non-value-added cost that suppliers end up charging their customers. Technology can provide real-time transparency, which can help companies reduce idle time for construction workers by moving them to other jobs when there is an unforeseen work stoppage

Technology will also enable companies to reduce supplier cost. This is not about beating up the suppliers to get a reduction but about finding ways to remove non-value-added costs by understanding the underlying economies

verall, costs are expected to decline through restructuring the arrangement

By managing large suppliers, the company may have to hire some internal resources, but the cost savings from management fees more than make up for the increased cost of new hires

One of the ideas is for the customers to manage large suppliers directly, to reduce costs and to have IFM providers manage smaller suppliers

Companies started changing their performance incentives for IFM providers. They started asking for performance against budget and also began to put the management fee at risk based on cost performance