One of the biggest trends in supply chain management in 2012 was an improved focus on customer relations. In response to a slow global economy, many companies made it a priority to cut costs. This strategy caused many businesses to lose sight of the most important part of the supply chain – the end-user.
Companies that have returned their attention to the consumer are ahead of the game, according to this year’s Product Mindset report by Underwriters Laboratories (UL). In 2013, people will base their purchasing decisions on much more than a product’s price tag. Successful businesses will adapt their supply chain management strategies to meet these demands.
Many factors affect a person’s decision to buy a product. In the past, price had the biggest influence. In this year’s survey, consumers chose quality as their first concern, whether they’re shopping for personal electronics or clothing. Manufacturers are already aware of that, however. “During the next two to three years, manufacturers cite quality as having the biggest effect on their ability to compete by a margin of 2 to 1.”
Ethical Practices Make a Difference
Consumers around the world expect companies to become more socially and environmentally responsible. Customers believe that manufacturers, as well as their suppliers, should give safe and fair work conditions to their employees, but 48% of respondents believe most companies fail in this area. The environment is equally important. “Consumers are demanding more eco-friendly products at the same cost as products that are not eco-friendly,” according to 53% of the manufacturers surveyed.
Safety Starts with SCM
The typical consumer understands more about safety risks associated with certain products and most believe that manufacturers could do more to guarantee safety. “Only 36 percent of consumers strongly believe that manufacturers conduct thorough enough product-safety testing before introducing new products to the market” and more than half of those surveyed believe “manufacturers value sales more than product safety”. Consumers also believe that raw materials sourced from developed countries are superior to those from developing nations.
In the year ahead, consumers are becoming much more realistic when it comes to shopping. Most customers realize that you get what you pay for. Smart supply chain managers are updating their strategies to meet these expectations.