Abstract
Purpose – The purpose of this paper is to understand how firms manage their product and service offerings, integrating supply chain management (SCM) and demand chain management (DCM) strategies. Adding services to the product portfolio of a firm may bring benefits to an organisation, but requires a reconsideration of the supply chain management approach. Design/methodology/approach – A survey is used to collect data, with valid questionnaires obtained for 4,227 UK-based respondents. Empirical analysis utilises structural equation modelling (SEM). Findings – The paper proposes that a combination of management approaches is required by firms which add services to their portfolio of traditional product offerings. A supply chain management approach may be suitable for traditional product offerings. The management of the services value chain, where the customers' role as value creator is a central feature of the construct, is better served by integration of the market orientation of DCM. Originality/value – The paper addresses a research gap related to the shift in traditional activities carried out by a firm moving from purely product to a product service offer and reconsiders the supply and demand chain management approach. The paper is from a Business to Consumer (B2C) perspective. In this context, the work pioneers analysis into a particular case where a firm's product and service offerings may be substitutes for each other in the eyes of the customer.
Highlights
Chain management (SCM) is conceptualized as the network of organizations, linked upstream and downstream in processes and activities, producing products and services which are delivered into the hands of the ultimate customer (Christopher, 2005)
Analysis shows that link channels make this group less likely to purchase, meaning that the traditional supply chain management approach employed is inappropriate
Traditional supply chain management approaches for products are often based upon transactional relationships with customers, characterized by the firm delivering to the customer and reacting to their feedback (Khan et al, 2006)
Summary
Chain management (SCM) is conceptualized as the network of organizations, linked upstream and downstream in processes and activities, producing products and services which are delivered into the hands of the ultimate customer (Christopher, 2005). Manufacturing firms have been changing their portfolio of offerings, increasingly providing service in addition to their traditional product offerings; a process named servitization (Vandermerwe and Rada, 1988). These services take numerous forms including: customer support (Goffin, 1999), Through Life Management (TLM) (Johnsen et al, 2009) and availability contracting (Ng et al, 2011). This paper addresses the research question ‘How does changing the offering affect supply & demand chain management?’
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