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Therefore, most companies prefer to establish their business models based on customers' desires, needs, requirements, expectations, and preferences. These requirements that must be met by companies' business models are related to product cost, quality, and delivery time. Some of the changes made by companies in their logistics systems in accordance with this aspect include: "several major retailers may demand that suppliers ship directly to store locations rather than to the retailers' distribution centers" (Cranmer & Wegfahrt, 2006).
One of the issues needed to be taken into consideration when deciding to establish a company's logistics strategy on customers' preferences is the fact that these customer preferences also change over time, so the company will have to continuously change its logistics strategy and adapt it to the changing customer preferences.
Other than this, the channel strategy is significantly influenced by customers' knowledge regarding the products, their price sensitivity in the product category, the way they make their purchase decisions, their logistics and customer service needs, and comfort using technology to meet their needs (Betman, 2000).
Nowadays, it is a true fact that customers drive location strategy. The main objective for any company that manufactures or sells products or services is customer satisfaction. If customers are satisfied, this will increase their loyalty degree towards the company, which will ensure the company's well-functioning and further success.
The logistics strategy must now adapt to the customer, to meet his requirements, in order to keeping him loyal to the company. Before the current period, companies' logistics strategy was established in accordance with the company's needs only, putting customers on the second place. But this condition has changed in the meanwhile, and the customer is the number one aspect that needs to be taken into consideration when establishing a company's...
As mentioned above, customers' preferences change over time and the location strategy must also change and adapt to them. For example, "the old-school model used for manufacturing included the need to inventory raw materials and sub-assemblies at the manufacturing site. Manufacturers did not rely on the supplier's ability to re-stock inventories on a short-term basis" (Cranmer & Wegfahrt, 2006).
If companies will not orient their logistics strategy to adapt to customers' preferences, than customers will orient themselves to other companies that have logistics strategies the customers can relate to, strategies that are in better accordance with their preferences regarding product cost, quality, and delivery time. Related to the delivery time issues, it is worth mentioning that suppliers have modified their business models and their locations, being somehow obligated to do so by customer supply chain factors and advancements. These modifications made in time were necessary in order to meet certain requirements, like just-in-time delivery requirements.
Therefore, these modifications have determined many aspects of the logistics strategy to improve for both companies and customers. These aspects that have evolved in a positive way include: delivery times, inventory levels, and profitability. And the changes did not stop here, as these improvements have determined certain companies to assess their decisions regarding locations and facility types.
Reference List
Cranmer, Les J. & Wegfahrt, Art M. (2006). Ranked #9: Proximity to Major Markets. Area Development, Corporate Survey Series. Retrieved June 24, 2007 at http://www.areadevelopment.com/corpSurveySeries/oct06/proximity06.shtml.
Betman, Donald (2000). Distribution and Logistics Strategy. W & H. Systems, Inc. Retrieved June 24, 2007 at http://www.whsystems.com/Distribution%20&%20Logistics%20Strategy.pdf
references regarding product cost, quality, and delivery time. Related to the delivery time issues, it is worth mentioning that suppliers have modified their business models and their locations, being somehow obligated to do so by customer supply chain factors and advancements. These modifications made in time were necessary in order to meet certain requirements, like just-in-time delivery requirements.
Therefore, these modifications have determined many aspects of the logistics strategy to improve for both companies and customers. These aspects that have evolved in a positive way include: delivery times, inventory levels, and profitability. And the changes did not stop here, as these improvements have determined certain companies to assess their decisions regarding locations and facility types.
Reference List
Cranmer, Les J. & Wegfahrt, Art M. (2006). Ranked #9: Proximity to Major Markets. Area Development, Corporate Survey Series. Retrieved June 24, 2007 at http://www.areadevelopment.com/corpSurveySeries/oct06/proximity06.shtml.
Betman, Donald (2000). Distribution and Logistics Strategy. W & H. Systems, Inc. Retrieved June 24, 2007 at http://www.whsystems.com/Distribution%20&%20Logistics%20Strategy.pdf
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