The desire to expand product variety to satisfy customers’ demands is a major challenge to many supermarket chains. This has been worsened by the dynamism of the business environment. Today, success in this sector goes beyond the traditional programs such as a lead-time reduction. Our plan to provide our clients with a complete “package” is a brilliant idea. However, our approach could prove not only costly, but also ineffective. Our best option in this scenario is to redesign both our processes, and products, that is, to adopt delayed differentiation.
How delayed differentiation will work.
The approach will adopt process restructuring, where instead of packaging the complete product, basic meals (family products) will be prepared and sent to retail shops where different mix options will be given to customers. For instance, instead of supplying rosemary potatoes, pan roasted potatoes, and mashed potatoes as whole dishes, the company should supply prepared potatoes to its various branches. Branch managers should intern prepare the various blends depending on local demand.
The concept of standardization should also be applied. Customers always enjoy consistency and we should not deprive them of that pleasure. Branch managers will be allowed to control the quantity, taste, and presentation of their customized blends, provided they comply with the set standards. The concept will be more effective with the use of modular design since it allows flexible restructuring.
The potential benefits of delayed differentiation
i. Delayed differentiation enables quick reaction to the demands of customers, thereby increasing efficiency and customer satisfaction.
ii. By adopting a modular design, it will be easier to control the operations of retail outlets.
iii. Inventory cost will also be low.
The disadvantages of delayed differentiation
i. Delayed differentiation can hardly stand stiff competition.
ii. Market uncertainties can affect business operations adversely.
iii. Its success is dependent on hiring highly qualified personnel, which is expensive.
Despite the shortfalls of delayed differentiation, it gives the firm a better opportunity to succeed. Its customer-oriented approach will enable the firm to manufacture product blends favored by many customers, hence increased sales.
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