Introduction.
In the consumer retail chain, the relationship between the manufacturers and end-users is always straightforward. This is because the manufacturers deal with the end users directly where the consumers buy products and later go back to the manufacturers for support. However, the case in integrated trade is different; in this case, manufacturers do not relate directly with the end-consumers (Harrison and Hoek, 2011).
The products or services go through a chain of processes before reaching the end consumer. This may include wholesalers, distributors, retailers etc. in such a case, there is always a challenge on the manufacturers side as well as in the consumers side. This is because the consumers have their needs and tastes (Coyle and Coyle, 2009). On the other hand, the manufacturers depend on their innovativeness and product differentiation. This creates a conflict of interest since what the manufacturers produce do not fit or satisfy the needs of the end-consumers.
Relationship between manufacturers and end consumers
Contrary to the past, manufacturers no longer compete with autonomous corporations. Rather, the manufacturers also compete with the supply chain participants. This has changed the ways and methods to which products are produced, designed and delivered. The integration in the supply chain has allowed the manufacturers to increase their production and differentiate the products in an effort of performance optimization.
Manufacturers and end consumers are only associated by two elements; product and price. The manufacturers produce the goods and determine their prices. On the other hand, the consumers determine what the manufacturers produce from their tastes and preferences and in relation to the prices (Coyle and Coyle, 2009). The manufacturers determine the relationships that occur between the end consumers and supply chain participants. They determine the packaging methods and delivery which customers are keen about in making their purchase decisions.
The key players in the supply chain include the suppliers, organizations and consumers. There are also many other partners involved in the transactions like banks, insurance agencies, middlemen etc (Harrison and Hoek, 2011). Supply chain refers to the network of relations that organizations maintain with their business or trading partners to procure manufacturing industries and consumers. It a process that encompasses facilities such facilities where raw materials, intermediate products and end products raw produced, stored and sold. Its management includes coordination of information, material and financial flows among the participants.
Supply chain integration.
However, integrating the chain has negative implications on manufacturers and end consumers. This is in terms of product management, identification of key suppliers, and lack of cooperation, and cost and productivity issues. Integration the process implies that, the manufacturer no longer deals directly with the end consumer. There lacks communication between the two parties since the manufacturer is barred by the logistics to deal with the end consumer. This implies that the manufacture relies on the research carried out by the other participants in determining what the end consumer needs. Sometimes the manufacturer produces more goods or services that the end consumer does not need (Coyle and Coyle, 2009). This means that such goods have to be held in the market for stock clearing; the consumers needs in this case fail to be considered.
The case for supply chain integration has developed strategies that most companies have sued to achieve their goals. However, under the new IT logistics, most of the companies fail to achieve the goals, there lacks an ingredient of information that coordinates the manufacturers and end consumers which leads to failed relationships between the two parties (Harrison and Hoek, 2011). There lacks proper coordination on what to produce, when to produce, when to deliver and on the appropriate price.
The logistics have attracted more competition in the manufacturing industry which has led to production of substandard goods that do not meet the needs of the consumers. The integration attracts manufacturers from all regions, and this leads to unnecessary competitions in the market. The consumers result into a mix up where they cannot differentiate original and counterfeit products. The prices of the counterfeited products are placed at a lower rate compared to the original ones, and this creates a pricing conflict among consumers and manufacturers.
The integration is also shortcoming in the issue of pricing; the inclusion of the other players means that the price range keeps changing as every participant looks for profits. The consumer, therefore, bears the burden, of all the participants, as opposed to when dealing directly with the manufacturer. This makes the consumers shift from one brand to another in search of better offers. The consumers view the manufacturers as exploitative and ignore the participants of the chain who are the causes of the increased product prices.
In an integrated supply chain, the key suppliers and manufacturers are both internal and external (Coyle and Coyle, 2009). These manufacturers have different operation and production modes. This leads to a mix up in resources that delay the manufacturing and create unsatisfactory experiences from the customers. The manufacturers and end consumers also conflict on quality of products due to the differences in produced products and tastes and preferences. The manufacturers rely on the distributors to obtain the market information, or on what consumers want. The distributors further depend on what the retailers have on store and the chain of information dependency continues. Eventually, what the manufacturers get is totally different with what the consumers demand (Harrison and Hoek, 2011). The manufactures end up producing goods that are not fulfilling to the end consumers. In addition, the issue of supplier partnerships leads to interfaces where the products are compromised.
More conflicting issues arise on delivery policies and logistics. The vertical integration of the supply chain management includes a complex delivery procedure which leads to untimed or late deliveries, which make the consumers, suffer a loss. Sometimes the goods delivered are not in the best of shapes or are stale. This triggers reactions from consumers and the whole blame is directed to the manufacturers. Sometimes the materials required in production have to be outsourced, and this delays consumption further.
References.
Coyle, J. J., & Coyle, J. J. (2009). Supply chain management: A logistics perspective. Mason, OH: South-Western Cengage Learning.
Harrison, A, & Hoek, R. I. (2011). Logistics management and strategy. London, England: Prentice Hall Financial Times.
