6: In-house production. In-house production needs to be planned.
Production planning involves people, materials, components, machines, financial
resources, and possibly suppliers and subcontractors. In the case of assembly, manufacturing,
or both, several plant services may be needed, including possible collaboration
with business partners. Services may include scheduling of people and
equipment, shifting other products’ plans, working with engineering on modifications,
getting equipment, and preparing content.The actual production facilities may be in
a different country from the company’s headquarters or retailers. This may further
complicate the flow of information and communication.
• Activity 7: Contractor use. A manufacturer may opt to buy products or subassemblies
from contractors. Similarly, if the seller is a retailer, such as in the case of
Amazon.com or walmart.com, the retailer must purchase products from its manufacturers.
Several scenarios are possible. Warehouses can stock purchased items,
which is what Amazon.com does with its best-selling books, toys, and other commodity
items. However, Amazon.com does not stock books for which it receives only a
few orders. In such cases, the publishers or intermediaries must make the special
deliveries. In either case, appropriate receiving and quality assurance of incoming
materials and products must take place. Once production (step 6) or purchasing from
suppliers (step 7) is completed, shipments to the customers (step 3) are arranged.
• Activity 8: Contacts with customers. Sales representatives need to keep in constant
contact with customers, especially in B2B, starting with notification of orders received
and ending with notification of a shipment or a change in delivery date. These contacts
are usually done via e-mail and are frequently generated automatically.
• Activity 9: Returns. In some cases, customers want to exchange or return items.
Such returns can be a major problem, as more than $100 billion in North American
goods are returned each year