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Bridging the gap between supply chain and consumer experience
Bridging the gap between supply chain and consumer experience
Cui Zou
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BRIDGING THE GAP BETWEEN SUPPLY CHAIN AND CONSUMER
EXPERIENCE
by
CUI ZOU
A THESIS
Presented to the Faculty of the Graduate School of the
MISSOURI UNIVERSITY OF SCIENCE AND TECHNOLOGY
In Partial Fulfillment of the Requirements for the Degree
MASTER OF SCIENCE IN INFORMATION SCIENCE & TECHNOLOGY
2016
Approved by
Dr. Cassandra C. Elrod, Co-advisor
Dr. Sarah M. Stanley, Co-advisor
Dr. Nathan W. Twyman
PUBLICATION THESIS OPTION
This thesis consists of the following two articles, formatted in the style used by the
Missouri University of Science and Technology:
Pages 3-21 are intended for submission in QUALITY MANAGEMENT
JOURNAL.
Pages 22-44 are intended for submission in INTERNATIONAL JOURNAL OF
ELECTRONIC MARKETING AND RETAILING.
iv
ABSTRACT
Many researchers agree that supply chain management is at the root of addressing
customer values and increasing customer satisfaction. However, in reality the route to
accomplishing these goals is not so clearly defined. The studies herein attempt to shed
some insight on a special perspective to bridge the gap between supply chain and customer
experience. The ideas behind these studies explore the notion that customer experience can
be impacted by a vast spectrum of factors from suppliers to even the specific mobile
commerce (m-commerce) tools they use.
To gain insight into the supplier dimension of the supply chain, a survey was
conducted to examine quality professionals’ familiarity with quality management tools,
their organizations’ quality assurance programs, as well as training for their suppliers. For
the m-commerce aspect, a between-subject experiment was delivered to explore the
relationship between physical mobility and consumer behaviour and experiences. The
results of these studies show that quality training offered to suppliers enable significant
quality increase, significant time saving benefits, and significant financial benefits in the
organizations that use these suppliers. Also, the quality increase and time saving in supply
chain are usually positively correlated to better customer experience. They also show that
walking, or mobility, while shopping increases the time spent on a specific shopping task,
which in turn, influences the customer experience.
v
ACKNOWLEDGMENTS
I would like to express my deepest appreciation to Dr. Elrod and Dr. Stanley, my
co-advisors who have provided continuous support to my Masters study and research, for
their patience, motivation, enthusiasm, and immense knowledge. Their guidance helped
me in all the time of research and writing of this thesis. I thank them for their invaluable,
insightful comments and ideas for improvement in my research.
I would like to thank the rest of my thesis committee: Dr. Twyman, for his
encouragement, insightful comments, and hard questions.
I would like to thank my family, especially Yun (Winnie), who encouraged me to
study in the US, and has been supporting me all the time. I also want to thank my
grandmother. She took care of me for many years and always has faith in me.
vi
TABLE OF CONTENTS
Page
PUBLICATION THESIS OPTION
……………………………………………………………………….. iii
ABSTRACT
……………………………………………………………………………………………………….. iv
ACKNOWLEDGMENTS …………………………………………………………………………………….. v
LIST OF ILLUSTRATIONS
………………………………………………………………………………. viii
LIST OF TABLES
………………………………………………………………………………………………. ix
SECTION
1. INTRODUCTION
………………………………………………………………………………………. 1
PAPER
I. QUALITY’S IMPACT ON THE SUPPLY CHAIN: A SUPPLIER TO
CUSTOMER VIEW ……………………………………………………………………………………….. 3
ABSTRACT …………………………………………………………………………………………. 3
1.
INTRODUCTION ……………………………………………………………………….. 4
2.
BACKGROUND …………………………………………………………………………. 6
3.
METHODOLOGY …………………………………………………………………….. 10
4.
DISCUSSION AND CONCLUSION …………………………………………… 19
BIBLIOGRAPHY ……………………………………………………………………………….. 20
II. SHOPPING ON THE GO: HOW WALKING INFLUENCES MOBILE
SHOPPING PERFORMANCE ………………………………………………………………………. 22
ABSTRACT ……………………………………………………………………………………….. 22
1.
INTRODUCTION ……………………………………………………………………… 23
2.
LITERATURE REVIEW ……………………………………………………………. 24
3.
THEORETICAL BACKGROUND
………………………………………………. 30
vii
4.
METHODOLOGY …………………………………………………………………….. 32
5.
ANALYSIS AND RESULTS
………………………………………………………. 34
6.
DISCUSSION AND CONCLUSIONS …………………………………………. 37
BIBLIOGRAPHY ……………………………………………………………………………….. 39
SECTION
2. CONCLUSION ………………………………………………………………………………………… 45
3. FUTURE WORK ……………………………………………………………………………………… 46
VITA ……………………………………………………………………………………………………………….. 47
viii
LIST OF ILLUSTRATIONS
Paper I
Page
Figure 3.1: Distribution of Respondent Industries
…………………………………………………… 11
Figure 3.2: Individual Respondent Work Areas ……………………………………………………… 12
Figure 3.3: Individual Occupational Title
………………………………………………………………. 13
Figure 3.4: Respondents’ Length of Time Working with Quality ……………………………… 15
Figure 3.5: Industrial Organization Size
………………………………………………………………… 15
Figure 3.6: Industrial Organization Annual Revenue ………………………………………………. 16
Figure 3.7: Percentage of Business Outsourced By Organization
……………………………… 16
Figure 3.8: Percent of Products/Services That Come From
Organization’s Supply Base ………………………………………………………………… 17
Figure 3.9: Percent of Suppliers That Have Used Quality Techniques ………………………. 17
Figure 3.10: Quality Training Provided to Suppliers
……………………………………………….. 18
ix
LIST OF TABLES
Paper II Page
Table 2.1: Evolution of M-Commerce Innovations (2001-2015)
……………………………… 26
Table 5.1: User preference results ………………………………………………………………………… 35
Table 5.2: Multivariate regression results
………………………………………………………………. 35
1. INTRODUCTION
Overall, the supply chain involves managing a product or service delivery from raw
materials to the end user, or customer. Many factors impact this chain including, but not
limited to, suppliers, logistics, processes, customers, and technology. This study intends
to take a broader view of supply chain management and look at various aspects of the
customer in the supply chain. Quality management has, and continues to be, a critical part
of customer loyalty and impacts purchasing decisions. Also, technology also has proven
to be a critical role in not only managing the individual components within the supply chain
itself, but also how customers make purchases, thereby influencing the customer
experience.
Paper I presents a study of how quality management, and knowledge of quality
management tools, can impact the overall organization providing a product or service to a
customer. Over many years of study, quality management still proves to play a role in
brand loyalty and customer engagement. Knowledge of quality management within an
organization and its supply chain was demonstrated by the use of a questionnaire
distributed to quality professionals working in industry as well as end-user customers. It
was shown that while quality plays an important role in the supply chain and to customers’
experiences, many industry professionals are unaware of their organizations overall quality
management approaches, including their suppliers. Paper II presents a study on the impact
of mobile technology during consumer shopping experiences, which is ultimately one of
the end stages in the supply chain. It was demonstrated by asking participants to shop for
a specific product on a mobile device while walking on a treadmill in a controlled
environment.
2
Overall, this study has explored the role of quality management and the use of
technology within the supply chain and sought to understand the impact it may have on the
consumer.
3
PAPER
I. QUALITY’S IMPACT ON THE SUPPLY CHAIN: A SUPPLIER TO
CUSTOMER VIEW
CASSANDRA C. ELROD, SARAH M. STANLEY, ELIZABETH A. CUDNEY, AND
CUI ZOU
MISSOURI UNIVERSITY OF SCIENCE AND TECHNOLOGY
ABSTRACT
An integral part of supply chain management is the area of quality management.
Quality management ultimately impacts the supply chain from several angles. Quality
management impacts the overall function of the supply chain through reducing costs, as
well as by improving the product or service being produced so that marketing efforts can
more successful. This study explored the understanding and insights of quality
management topics in industrial professionals who are working within the supply chain in
industrial organizations. Questions regarding familiarity with quality management tools,
their organizations’ quality assurance programs, as well as suppliers’ quality measures
were explored. Overall, it is seen that the quality management tools and assurance
programs are progressing; however, quality management professionals who participated in
this study are unaware of suppliers’ quality procedures and the implementation of many
useful quality tools that may improve the overall supply chain.
Keywords: Quality management; supply chain management; continuous improvement;
marketing impact
4
1. INTRODUCTION
Marketing and supply chain management have been linked in a variety of ways for
decades. In higher education, the two departments are often even housed together. For
example, Rutgers, a leading business school, hosts the department of Supply Chain
Management and Marketing Science. In practice, there are also many areas of overlap
between supply chain management and marketing. Previous research suggests that
different perspectives help to illustrate these overlaps, such as inter-functional integration,
process integration, and business concepts (Jüttner, Martin et al. 2010).
One perspective used to quantify the overlap between marketing and supply chain
management is the inter-functional perspective (Jüttner, Martin et al. 2010). Much like the
combining of academic departments in business schools to achieve efficiency, it has been
shown that the coordination of marketing and supply chain departments in traditional
businesses often result in improved customer service related performance (Ellinger,
Daugherty et al. 2000). This perceived relationship between marketing and manufacturing
goes back to the late 1970’s when Shapiro wrote an essay discussing the benefits of
managing the integration in these two areas to resolve the conflict that often arose from
turf wars (Shapiro 1977).
The process integration perspective examines the intercept of marketing and supply
chain as it relates to the consumer perspective. In this way, individual business processes
that cannot be wholly qualified as supply chain or marketing may exist in the overlap. For
instance, looking at where marketing specifications, customer service and quality
expectations are directly impacted by issues of supply chain such manufacturing and
logistics. This perspective examines the value chain, the role of supply chain, and its impact
5
on consumer value (Bagchi and Skjoett-Larsen 2005, Jüttner, Martin et al. 2010, Singh,
Sohani et al. 2013).
The last perspective analyzing the overlap between supply chain and marketing is
the direct analysis of the new business concepts that seem to have sprung up as a way to
integrate the two functional areas more effectively (Jüttner, Godsell et al. 2006, Jüttner,
Martin et al. 2010). New business models such as quick response (Christopher 2000, Mo
2015), agile supply chain management (Yusuf, Sarhadi et al. 1999, Routroy and Shankar
2015), and demand chain management (Santos and D’Antone 2014, Park, Shintaku et al.
2015) have been improving company efficiency and their ability to respond to market
demands. In any case, many of these perspectives hinge on the idea of quality and how it
relates to both marketing and supply chain management.
6
2. BACKGROUND
Quality management has experienced different phases. From the initial stage of
quality inspection to later quality control, to further development into quality assurance
era, and total quality management (TQM), it is beneficial to examine how quality
management evolves into current stage (Garvin 1988).
Quality inspection existed as early as in ancient China, Greek, and Egypt. In the
Middle Ages, the quality of high skilled craft activities was ensured with apprentices
working under master craftsmen to make sure only acceptable goods were sold to
customers (Juran 1995). During this period it was the craftsmen to monitor and take charge
over the production quality and they were proud to provide high quality products
(Feigenbaum 1983). However, when the industrial revolution started, mass production
became dominant in many organizations. Advocated by the school of scientific
management, the labor went to much more specialization to cater to higher demand (Taylor
1919). Consequently, the foremen who managed groups of specialized workers became
more important in guaranteeing and controlling the quality (Weckenmann, Akkasoglu et
al. 2012).
World War I further speed up mass production and required even higher quality
and on-time delivery. To achieve those goals, quality professionals extended their
inspection and sampling not only on the finished goods but also on the raw materials and
goods in process. (Juran 1995).
Due to the widening focus for quality, people realized that it was much more
efficient to find and eliminate the root causes of errors than to simply inspect for defects
and correct them. Accordingly, the need for control quality emerged (Yong and Wilkinson
7
2002). Shewhart, a physicist at the Western Electric Company, invented a statistical chart
in 1924 to control product variables. He applied simple statistical techniques to calculate
the variation limits and graphic methods to plot values to determine if they were acceptable.
His work is now recognized as the “process control chart” and marked as the beginning of
statistical quality control (SQC) (Shewhart 1931).
Another key element of SQC was Dodge and Romig’s sampling technique, which
was the idea of only checking a portion of the total products and then deciding whether the
entire batch of products was acceptable. This advanced practice of sampling avoided time-
consuming 100% inspection (Yong and Wilkinson 2002). However, before World War II
industries didn’t recognize the value of SQC and hence didn’t use those mathematical and
statistical tools broadly. During the quality control era, management was not as actively
involved in the implementation of sampling techniques as the shop-floor workers and
engineers (Yong and Wilkinson 2002).
When the earlier history of quality management was based on detection and fire-
fighting activities, the quality assurance (QA) era was focused on preventing defects.
Customers joined in auditing and assessing suppliers’ quality without consensus standards.
In an effort to make QA more efficient, British Standard – BS 5750 was introduced and
adopted by British industries in 1979, which served as “a structure of QA bodies with
mutual acceptance of approvals to avoid multiple assessments” (Warner 1977). Later, ISO
9000, initiated by the International Organization of Standardization, replaced BS 5750 and
became the new standard for industry.
Apart from standards, quality costs were also drew attention from organizations.
Before the 1950s, in general people believed that they must create more costs to improve
8
quality. However, Juran challenged this point by measuring costs of quality (COQ)
thoroughly. He divided COQ into unavoidable and avoidable costs. The unavoidable costs
are the expenses spent on prevention activities, including inspection, sampling, etc. While
avoidable costs are those expenses related to rework, repair, scrap, and customer service
dealing with complaints. According to Juran, those avoidable costs could be diminished
through quality improvement programs and should get more attention throughout the
organization (Juran 1951). Feigenbaum advanced Juran’s COQ concept by developing
“total quality control (TQC)”, which addresses the importance of cooperation among all
divisions and control throughout every step (Feigenbaum 1983).
During the QA era, reliability engineering and the principal of zero defects were
also developed and adopted widely in the USA. While reliability engineering focused on
adapting the laws of probability to predict equipment stress (Garvin 1987), the zero defects
philosophy centered on changing the attitudes of employees and giving them constructive
criticism (Garvin 1988). The QA era saw the quality prevention was more important than
the pure inspection and control. Both the quality management tools and cross functions
teamwork were needed to achieve the goal to filter root causes of failure and eliminate
them (Dale 1999).
Total quality management (TQM) was originally developed in U.S.; however, it
was then exported to Japan and gained a wide and successful application in manufacturing
industries. Being considered as the secrets of Japanese business success, TQM was
subsequently re-exported to the West (Pollitt and Bouckaert 1996). It permeated the
manufacturing industry, then the commercial service areas, and finally the public services
(Dahlgaard-Park 2011).
9
Quality management has evolved into new topics of research such as lean and
sustainable production (Cudney and Elrod 2010). This research looks at how quality is
perceived by individuals in industry who deal with quality on a daily basis. It was designed
to better understand where industry practice was with regard to quality management. Does
academia have something to learn from practitioners or is industry lagging behind?
10
3. METHODOLOGY
A questionnaire was created to gain insights related to quality techniques/practices
implemented in organizations, the success rates for firms in industry that practiced quality
techniques, and also to find possible relationships in the quality training offered to suppliers
and its impact on the supply chain. The questionnaire data was collected through
distribution on Qualtrics.com to individuals working in the quality management area in
industry. The redundant responses were prevented through setting each participant could
only complete the questionnaire once. The following analysis includes responses from 65
respondents. Figure 3.1 illustrates the distribution of industries represented by the
respondents for the data set for this research. The majority of the subjects were from the
manufacturing industry (17%), followed by the computer hardware/software/internet
industry (15%).
The respondents were asked to provide their individual functional work areas to
ensure their familiarity with quality techniques in their industry. These responses are
represented in Figure 3.2. Operations/production was the majority response (18%),
followed by engineering (14%). These functional areas are typically quite familiar with
quality techniques throughout the supply chain. As shown in Figure 3.3, their occupational
title was also requested from the respondents; manager/assistant manager represented the
majority of responses (27%) followed by staff (20%).
The length of time each respondent spent working with quality techniques is
illustrated in Figure 3.4. Twenty-five per cent of the respondent population spent 1-2 years
working with quality techniques, and another 25% of respondent population spent 3-5 years
working with quality techniques. The familiarity with quality techniques of the respondent
11
population is therefore established and the remaining questions can be used regarding the
success and failure of quality techniques and how quality techniques impact the supply
chain.
To gain insight on the size of the organization the respondents work(ed) for, Figures
3.5 and 3.6 represent the workforce size and annual revenues of the organizations. A
variety of organization sizes were represented in this study, which shows a variety of
perspectives in industry. Figure 3.6 shows that 18% of the responses were industries with
annual revenues of $1,000,000 to $9,999,999 and another 18% are in organizations that net
over one billion in revenue.
Figure 3.1: Distribution of Respondent Industries
12
The respondents were asked to indicate what percentage of their organization’s
business was outsourced. These results are shown in Figure 3.7. The majority indicated
that up to 25% of their business is outsources. Figure 3.8 indicates the per cent of
products/services that come from an organization’s supply base. It is a bit concerning that
the largest number of respondents indicated that they did not know how much of their
products come from a supply outside of their organization. One possible explanation is the
compartmentalization of a large company, meaning that employees may not have
knowledge of the whole firm but only team or segment specific information related to
quality. The next most common response was 26-50% of supply coming from a base
outside of the organization, which is quite substantial.
Figure 3.2: Individual Respondent Work Areas
13
In order to reduce cost throughout a supply chain that contains many cause and
effect relationships, steps throughout the chain must be applied in order to reduce the total
cost. Introducing quality techniques can aid this process by things such as reducing the
amount of defects in the production process or increasing customer satisfaction when a
higher quality product/service is produced. As shown in Figure 3.9, the majority of the
respondents (30%) questioned indicated that they were unaware if their suppliers use
quality techniques. However, 23% of respondents indicated that 51-75% of their suppliers
use quality techniques.
Figure 3.3: Individual Occupational Title
Often, as a means to improve the supply chain process, organizations will offer
training to suppliers. The respondents in this study were asked to provide the types of
0
2
4
6
8
10
12
14
16
18
20
CEO/President/O…
Vice…
CFO/Treasurer/C…
Director/Asst.…
Manager/Asst.…
Small business…
Clerical/Administ…
Doctor / Physician
Developer /…
Lawyer
Supervisor
Educator
Staff
Other
Don’t work
14
training that their organizations provide to suppliers. Figure 3.10 shows that 30% do not
provide training, while the most common techniques offered via training are flowcharts,
check sheets, and cause and effect diagrams. Approximately 3% indicated “other;” these
responses were “lean and six sigma,” “quality program development,” and “n/a.”
Respondents were also asked what types of quality techniques they have paid for via
consultants to assist their suppliers. Almost 40% indicated that no such consultant training
was provided to suppliers.
When suppliers did use quality techniques, this study was interested to learn the
benefits that organizations realized by using these suppliers. The largest benefit seen (27%
of respondents) was “significant quality increase,” followed by “significant time saving
benefits” (26%). Twenty-one per cent of respondents indicated that their organization had
seen “significant financial benefits.”
Finally, the respondents were asked for insight on methods their organization had
used to encourage their suppliers to implement quality techniques. The majority of
responses (33%) indicated the use of “split quality programs savings,” followed closely by
31% who “dictated prices to suppliers.” The remaining population used things such as
“bonus process implementation,” and a few respondents were unsure.
15
Figure 3.4: Respondents’ Length of Time Working with Quality
Figure 3.5: Industrial Organization Size
0
2
4
6
8
10
12
14
16
18
No experience with
quality tools/programs
Less than 6 months
7 months to 2 years
3 to 5 years
6 to 10 years
11 to 20 years
More than 20 years
0
2
4
6
8
10
12
Under 10
10 to 19
20 to 49
50 to 99
100 to 149
150 to 499
500 to 999
1,000 to 4,999
5,000 to 9,999
10,000 to 14,999
15,000 to 25,000
25,000 or more
Don’t work
