The role of electronic integration of partners in supply chains and networks in creating customer value

Value is defined as the amount that a customer is willing to pay for what they receive from a supplier (Michael Porter’s model published in 1985), and a product for which there is no buyer has no value, regardless of the amount of labor, money, and other inputs used to produce it. The analysis of a company’s competitive position is not based on production costs, but on the assessment of the value it offers to the customer. Changes in customer expectations regarding the quality and quantity of the available product, the time and place of its acquisition, the form of acquisition (cash purchase, leasing, rental, installment purchase), requirements for product installation, instructions at the time of purchase, and many other needs have changed the picture of target customer satisfaction. For an enterprise, it is essential to maintain a balance between the value of the product perceived by the customer and the management of costs and capital. The assessment of the value created by the supply network and the supply chains dynamically created within it (which constitute a source of competitive advantage) consists of the assessment of the value created by individual partners in the chain.

The needs and preferences of buyers determine the creation of inventory, short production runs, rapid response to their needs, etc. From these basic areas of customer value arises the need for cooperation between partners, control, and improvement of product flow efficiency throughout the entire supply chain. An offer tailored to customer needs increases the company’s chances of selling the product and also raises the probability of repeat customer purchases, which directly generates higher profits.

The need (and even necessity) for cooperation between many enterprises in a supply chain due to servicing a common product for a common customer is nothing new today. However, there are many ways to achieve common market goals, control cooperation conditions and customer satisfaction, and reduce costs and increase operational efficiency. The ability to create and increase product value in a supply chain with the participation of many partners depends on the ability to jointly plan, forecast, and replenish inventory (CPFR – Collaborative Planning, Forecasting & Replenishment) as well as control and steer related processes in the supply chain. Integration of activities towards a “single common plan” based on market needs is the most important and at the same time the most difficult art of cooperation between enterprises in a supply chain, which further results in the coordination of marketing, distribution, production, procurement, as well as financial, investment, and human resources development plans, etc. The interdependence of plans is the basis for further synchronization of operational activities and is of fundamental importance for the fluidity of cargo flow in the supply chain. The management of service and sales processes translates directly into the need to manage transport, warehousing, production, or procurement processes. Managing the processes of mass cargo flows often boils down to managing time (availability, shipment, receipt, etc.) and the value added of the product (sales revenue minus all chain costs of the product). Data exchange in the chain allows for anticipating promotion plans, planning required production capacities and warehouse throughput, planning procurement, and cash flow plans. Data for the needs of planning decisions by senior and middle management are supplemented with analyses of costs, profit, turnover, return on assets and invested capital, etc.

The scope of cooperation between partners (manufacturer, retailer, and customer) of the supply chain in planning, forecasting, and inventory replenishment (CPFR), with the indication of four basic areas: development of supply chain strategy and strategic planning, demand and supply management, current execution, and creation of analyses and operational controls, is presented in Figure 1 [1].