A supply chain is a network of firms/individuals that take part in the production, transportation, supply, warehousing and sale of products or services. Supply chains is crucial in making sure that organizations are able to meet their sales and profits targets. This paper shall evaluate two crucial parties to the supply chain: the manufacturers and the consumers. The two need each other so as to effectively complete the supply chain. A challenge arises when it comes to the need of intermediaries like wholesalers, retailers and suppliers. Does their presence within the supply chain network conflict with the aims of the manufacturers & customers?
The link between manufacturers and end-customers
The end- customer is the one who purchases and consumes goods and services which have been produced by the manufacture. The manufacturer is therefore the individuals that are involved in the manufacture of goods. The products manufactured usually goes through several intermediaries before it reaches the end user customer. The intermediaries aren’t the real goods and services users but are simply a means through which the goods reach the end consumer. Manufacturers and consumers work symbiotically. The manufacturers wouldn’t survive if there were no consumers of their goods and services (Lambert, 2008). Moreover, the end consumers wouldn’t be able to access their preferred products and services without the producers. Manufactures research on the preferences and the requirements of the consumers and later on proceed to manufacture the specific products and services that the end consumers want.
The present Status
In the 21st century, manufactures and customers interact via intermediaries. Unfortunately the use of intermediaries has resulted to the rise in the cost of commodities and services. The intermediary want to make profits and they do this through hiking the price of goods or services from the initial buying price sold by the consumer. The consumers and the manufacturers may thus want to eliminate the intermediaries from the entire supply chain process. The consumers know that by dealing directly with the producers, they shall be in a position to obtain the products and services at a cheaper price. The goods and service would be less costly and affordable than they would have been in the event the intermediaries were included.
The producers on the other hand might desire to eliminate the intermediaries since it would ensure easier accessibility and attract more customers. However, this is easier said than done (Mahadevan, 2009). Producers depend heavily on the supply chain to ensure that their commodities is easily accessible by the end consumers. It might be very costly for the manufacturers to attempt and manage production and sales. The intermediaries are very crucial sales people required by manufacturers. The intermediaries’ buy the commodities from the manufacturers and later on sell them to the retailers who then proceed to sell them to the end consumers. The intermediaries have the chance to break down the goods into smaller and affordable portions for the customers.
The Changing Trend
It has been projected that the demand of the services of the intermediaries might soon become optional. The changing times like advancement in technology have enhanced communication between the end consumers and the manufactures. The increasing ability of the consumers to carry out their own research on manufacturers and their products has greatly improved their relationships with the manufacturers. With the information that customers are depending on the web to gain information about products and services, the manufacturers are set to take actions towards advertising their goods and services and indicating details like their prices.
Integration of the Supply Chain
In chapter 8, of logistics management and strategy, Harrison & Hoek (2008), emphasized on the essence of integrating the supply chain since it would ensure long lasting relationships. Harrison & Hoek (2008), noted that integration improves internal and external coordination directed towards meeting the needs of the consumer. Importance of integrating supply chain might however conflict with the aims of the manufactures and customers. The end consumer’s primary aim is to be offered goods that are of good quality and at an affordable price. However, emphasis on supply chain entails the goods going through several intermediaries before reaching the consumers (Lambert, 2008). The issue with this supply chain is that the wholesalers and retailers might exploit the real buying price of the goods to make profit. The producers sells the goods to the suppliers at a fair price. However, there are other expenses which the suppliers incur like transportation and storage expenses.
To cover this extra cost, the suppliers are forced to increase the prices of the goods. Use of supply chain lowers the customers’ ability to make reliable product comparison before buying.
The producers on the other hand might be unable to achieve their aim of directly serving the customers. The producers might be reliant on the information that they obtain from suppliers, wholesalers etc (Harrison & Hoek 2008). The producers risk not meeting the real preferences of the end consumers. The suppliers who carried out market research might issue inaccurate information to the producers. Depending the market research information, the producers might manufacture goods which the consumers do not really want to purchase.
In conclusion, the link between producers & consumers determines the efficiency of the supply chain. Producers manufacture goods with the aim of selling them to the consumers. The consumers on the other hand expect producers to manufacture goods which they need & at fair price. However, for efficiency and cost saving, intermediaries need to be included in the supply chain process. Intermediaries of the supply chain thus ease accessibility of goods & service hence saving the producers extra cost like transportation and storage. Conflict on pricing plus adequate manufacturer-customer relations arises.
Harrison & Hoek (2008). Logistics management and strategy. New York: Prentice Hall
Lambert, D. (2008). Supply chain management. Supply chain management institute. New York: Cengage learning
Mahadevan, B. (2009). Operation management. Theory and practice. New York: Pearson Education