There is an increasing need to undertake the expansion of product variety as a mechanism for satisfying customer demands, which is a major challenge to many supermarket supply chains. This desires has particularly been exacerbated by the business environment dynamism. In order to succeed in the challenging environment of today, there is need for the company to go beyond the mainstream traditional supply chain management techniques of real time reductions. This plan to provide the company’s clientele base with complete ‘package’ food items is a brilliant idea, which is worth implementation. However, the approach being proposed here could prove not only ineffective but also costly.
How delayed differentiation process will work
Delayed differentiation is a supply chain management technique that will be valuable a postponement tactic. Through the process, the company will be able to produce, but not completely finish, the product on the suggested menu, enabling the firm to postpone product completion until client specifications or preferences are well established. Although the technique has its specific variants, the company will be able to make do with the first suggested menu until customer orders and specifications are received, at which time the particular client orders shall be customized and incorporated into the menu, based on the individual customer requests.
In the context of the company, the technique will entail the adoption of process restructuring, as opposed to packaging the complete meal product, basic meals (or family products) by the company will be prepared then forwarded to retail shops wherein different varieties of product mix option will be issued to customers based on their requests. For example, as opposed to supplying pan roasted potatoes, rosemary potatoes, as well as mashed potatoes, as whole dishes, the company will need to supply the prepared potatoes to its various sub-branches and outlets. In turn, branch and outlet managers should then undertake the preparation of a variety of blends on the basis of local demand.
Furthermore, the delayed differentiation process will also require the application of the concept of product standardization. Considering that clients also get more satisfied by product consistency, the company ought not to deny them that important pleasure. In this regard, branch and outlet managers will be capacitated to have substantial control over product quantity, taste, as well as the presentation and issuance of customized product blends, provided they meet full compliance with the set product standards. Notably, the effectiveness of this concept will be further enhanced through the use of the modular design method which allows for improved flexibility of the restructuring process.
Potential benefits of the proposed delayed differentiation
Delayed differentiation will be bear multiple advantages: first, it will enable the company to undertake quick response to customer demands, thus increasing opportunities efficient service delivery and improved customer satisfaction. Second, the company will also be able to realize tremendous cost reduction on inventory. Thirdly, through the adoption of modular product design technique, the company will be able to enjoy easier control over the operations of its retail outlets. Fourthly, product postponement also offers the company an opportunity to minimize labor as well as material requirements for the final product configuration until there is considerable, firm customer demand. As such, delayed differentiation is instrumental in the optimization of the company’s supply chain process, even in low or high demand seasons.
Notable disadvantages of the proposed delayed differentiation
Despite its numerous benefits, the proposed delayed differentiation will also have its potential drawbacks. First, the technique of delayed differentiation will hardly be able to standard stiff market competition. Secondly, adverse market conditions and uncertainties can also jeopardize business operation in unimaginable fashions. Thirdly, the desired success level of the technique will also be dependent upon the hiring of highly qualified and reliable personnel, thereby making more expensive by increasing the cost of its implementation.Fourthly, the disregard for, or abandonment of effective food product differentiation process planning can potential cause unnecessary packaging rework activities either at the firm’s manufacturing facility, third-party logistics partner facility or at the company’s distribution center. Notably, this has the potential to create unnecessary wastes in critical production factors such as materials, labor, as well as time. In this case, the effect could the undesirable inflation in the potential loss of sales output in case the product is not readily available on the retail shelves.
In spite of the notable disadvantages of the proposed delayed differentiation, the technique offers the company a better opportunity for business success. Its extended focus on the customer-oriented approach provides the necessary opportunity for the company to efficiently manufacture product mix and blends that are favorable to a broad range of customers, thus availing opportunities for increased product output and sales.
Date: January 27, 2016
To: Brad Marlow, Manager of Special Services
Subject: Delayed Differentiation for Customer Meal Preparations
A postponement strategy also known as a delayed differentiation defines a strategy to which the supply chain is delayed to a point that the demand of the customer is revealed with an objective of maintaining both fast response and low system-wide cost.
How delayed differentiation process will work
The technique of delayed differentiation involves a manufacturing process that starts by processing the family product but with time the same product is differentiated from well-defined end product for customers. Rather than availing the end product at once such as the roasted legs, Pan roast potatoes, filet mignon, garden Pease, butter French bread and fried chicken among others, adopting the strategy of delayed differentiation will mean that the product in their initial stage of preparation will be distributed to the various outlets awaiting the customers’ orders of the nature of the end product she or he requires.
In addition, this strategy will aim at increasing the product variety for the customers hence an increase in the efficiency of product manufacturing. This will make sure that that which is prepared will be needed by the customer to avoid stage of food materials.
Benefits of delayed differentiation
a. The differentiated strategy allows the company work to meet effectively the demands of the customers as the food prepared will be that demanded by the customer hence avoid wastage due to unordered for a food product which is already in its end product.
b. The strategy allows the customers to make a choice as per their demands hence one-time customer may turn to a repeat customer.
c. It also mounts to risk pooling as the customers’ orders are executed as per their demand hence the supermarket will only prepare what is to be sued by the customer.
d. It provides tremendous cost reduction on inventory.
Drawbacks of delayed differentiation
a. If the response logistic is not appropriate, then supermarket may make losses due to stiff competition from other food outlets.
b. It requires real-time information as well as communication between the customers, in the absence of proper communication, the supermarket may not meet the demand for the customers in time.
c. Since it requires qualified staff, it may be costly for the management to withstand as well as meeting the customers’ demands appropriately