The moment I wake up
Before I put on my makeup….
I think about unpaid work…
At the end of many supply chains* you find consumers that are not only concerned about the price the pay for a product, but also the time they spend on various activities of acquiring these produtcs or services.
The number of books available on time management are not in shortage. A quick browse here reveals promises such as “Getting things done…”, “The one minute manager” (wonder if managerial problems can be put into a microwave?), and “Do It Tomorrow and Other Secrets of Time Management”. The idea of time management and stressful life has even translated into the chick lit genre. Take for example “I Don’t Know How She Does It” and “The Secret Dreamworld of a Shopaholic“.
‘Allo ‘Allo! — back to the more serious issues: Consumption, unpaid work, lean solutions and total cost of ownerhip.
In Lean Solutions from 2005, Womack and Jones assert that “consumption is often hard for the consumer and is unpaid work to boot”. One of the most expensive pieces of furniture we have bought at our house is a changing table. Unassembled.
Womack and Jones (2005:8) explain further: “…too many managers act as if production stops atthe office door or the factory gate. So we now use the term lean provision, which comprises all of the steps required to deliver the desired value from producer to customer…”.
Here is the problem: “… consumption often isn’t easy and consumers can’t get what they desire” (op cit, p. 9, my emphasis in bold). Let’s consider the first aspect, how easy (or difficult) it is to acquire products or services as consumers. To do this, it may be helpful to get some insight from the concept of total cost of ownership.
In this paper on Total cost of ownership: an analysis approach for purchasing, Lisa M. Ellram defines TCO as “purchasing tool and philosophy which is aimed at understanding the true cost of buying a particular good or service from a particular supplier”. This includes costs that may occur before transaction (e.g. searching for suppliers), during the transaction (e.g. transport) and after the transaction (e.g. acquiring after-sale services).
Although TCO has emerged as a tool within purchasing and supply management, it may be interesting to understand to what extent consumers are ignoring and/or appreciating the time dimensions implied in both Lean Solutions and Total Cost of Ownership. We could ask: what is the total cost of a mobile phone that has to be sent to repair by the consumer within 10 days of purchase, and the lead-time of this after-sale-service was 3 weeks? In addition, how will this articulation of consumers view on e.g. after-sale services translate into practices at the upstream level of the particular supply chain?! Will upstream levels of supply chains ever learn about the lead-times and costs of consumers at the downstream level of the supply chain, e.g. in the situation of after-sale services?
Árni
*We use many supply chains here, but this will be extended to include reverse logistics in some of the forthcoming blogs.
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Announcement: Since the nerds of service operations have a voice on this blog, we have decided to give them a particular tag for these entries: socks and sandals.
