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JIT, system integration and customer service
College of Business Administration, University of North Texas, Denton, Texas, USA College of Business, Arizona State University, Tempe, Arizona,USA
Keywords Just-in-time, Customer service, Supply-chain management, Value chain, Integration Abstract Recent literature indicates there has been an absence of top management involvement in the development of customer service policies and integration of these policies into the organizational decision making process. This paper discusses the importance of integrating customer service activitiesinto the decision making process of today’s manufacturing organizations and thus enhancing development of an organization’s competitive advantage. Just-in-time systems and new technologies (product, process and information) provide the mechanisms for integration of the various activities across the supply chain. Porter’s value system concept is presented as the framework for integrating a firm’sactivities within the supply chain and improving their performance.
JIT, system integration and customer service 313
Received April 1999 Revised February 2000, October 2000, March 2001
Richard E. White John N. Pearson
1. Introduction During the first several decades of the last century, US manufacturers persistently focused on developing greater efficiency. The focus on greater efficiencyenabled the USA to become the most productive nation in the world. However, in the last few decades, US manufacturers experienced a relative decrease in productivity growth rate, and, consequently, became increasingly less competitive in the new competitive environment. One reason US manufacturers became less competitive is that the managers traditionally approached decision making from afunctional orientation (perhaps because of the decades of institutional promotion of division of labor and specialization); this has been shown to hinder high levels of system performance and organizational competitiveness. It is suggested that US managers should become more adept at integrating all phases of their production systems; all functions along the material flow pipeline, from the acquisition ofraw materials through the transformation and distribution process to the final customer must be integrated to provide total product value for customers. In other words, management’s traditional perspective of the system must be extended beyond the factory floor to include suppliers and distributors. The activities of an organization are all interrelated and these interrelationships must beunderstood and considered in management decision making. Porter (1985, p. 48) refers to these organizational activities collectively as a value chain; he states “F F F the value chain is not a collection of independent
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activities but asystem of interdependent activities”. The value chain with extended boundaries is referred to as the firm’s value system, and it is this value system that creates the value of the product in the market place. Customer service represents a major component of the customer’s perspective of product value. A firm’s policies pertaining to customer service must be consistent with a firm’s long-range plansand must be developed in consideration of customer requirements and the firm’s resources. In a study of US and European manufacturing firms, Anderson and Jerman (1979) found the determination of objectives for customer service performance levels was the responsibility of sales management, and when customer service policy is established by sales in a manufacturing firm, decisions concerned with…
