Saturday, September 14, 2013

Efficiency Over Quality

 It interesting to see and read about what different people think of what constitutes as effective SCM. With the recent economic crisis still being felt today, companies from around the globe are constantly thinking of ways to better implement their practice to drive up revenue at customer satisfaction. While there is no question that a company can save a large amount of money when their SMB practices are running at full force. Often times the greatest example of this is the computer company Dell. They have little to no inventory and have managed to form key partnerships with great suppliers.

As the article "Living the Dell Life" states despite their employees improving efficiency, they are constantly seeking to improve upon their improvement. Perfection is an a dream but a reality to them. Additionally, even more companies are adopting some form of SCM to improve their over all customer satisfaction and revenues. Yet, is this coming at a price to these companies?

Starbucks, the largest coffee shop in the world has implemented SCM practices through out the country. The article written on the Wall Street Journal details how the company went about it implementing the practice and the benefits from it. Yet, employees made the concern known to senior leadership. They wondered if they were actually putting out a good product along with great customer service. Or were they just turned into one big supply chain that made them seem like robots.

As I read those practically comment it made me think. When I do get coffee what do I value, and that of course is quality. Its seems to happen to variety of chain establishments. There was a time when certain places delivered a greater product and over time the quality has diminished for efficiency or smaller portions of the product.

While most American companies will contest that profit are in the green as the same time that customer satisfaction is doing well. I personally hard to believe. In my own personal opinion I do think that there will reach a point where the quality will diminish so drastically there will be not SCM practice that will be able to solve the problem, there has to be a middle ground.

 Case in point with Dell. A week ago there was an assigned reading that detail Dells failure to replace dysfunctional motherboards. There was even efforts made within the company to hide the mishap. Was this really necessary? Of course any slight disruption to the SCM system could have meant huge losses for the company. Nonetheless there were those who felt that efficiency could not be disrupted and the products must get placed. But in the end it was bad news for the company. As the economy continues to build itself back up again and companies look for different avenues for cutting pricing and increasing revenue they should still value the quality of their products.

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