This phenomenon of implicit expectations for value added occurs in nearly all bidirectional supply chains. It can both simplify and complicate the communication across the supply chain. On one hand, it can simplify the process of demonstrating the real value which is added by the service provider. Customersshouldbeabletoreadilydiscernrealchangestotheirsuppliedinputs.
On the other hand, it can put service providers in a precarious position when customers provide sub-standard inputs with unrealistic value-adding expectations for the service provider. For example, a person may have a stained shirt that they wash and dry but the stain remains. So, they take the shirt to a dry cleaner, who is unsuccessful at removing the stain. (The fact is, dry cleaners cannot remove most stains once they have been baked-in with a clothes dryer.) The customer is upset that more value was not added to the shirt by the stain being removed. The dry cleaner added as much value as he/she could and charges for the shirt cleaning anyway.
This issue implies that it is often helpful to explicitly communicate value adding expectations with customers prior to service production processes. Further, customers may need to be informed when their inputs limit the amount of value adding which is possible. This and other managerial implications willbe expounded in the nextsection.
This phenomenon of implicit expectations for value added occurs in nearly all bidirectional supply chains. It can both simplify and complicate the communication across the supply chain. On one hand, it can simplify the process of demonstrating the real value which is added by the service provider. Customersshouldbeabletoreadilydiscernrealchangestotheirsuppliedinputs.On the other hand, it can put service providers in a precarious position when customers provide sub-standard inputs with unrealistic value-adding expectations for the service provider. For example, a person may have a stained shirt that they wash and dry but the stain remains. So, they take the shirt to a dry cleaner, who is unsuccessful at removing the stain. (The fact is, dry cleaners cannot remove most stains once they have been baked-in with a clothes dryer.) The customer is upset that more value was not added to the shirt by the stain being removed. The dry cleaner added as much value as he/she could and charges for the shirt cleaning anyway.This issue implies that it is often helpful to explicitly communicate value adding expectations with customers prior to service production processes. Further, customers may need to be informed when their inputs limit the amount of value adding which is possible. This and other managerial implications willbe expounded in the nextsection.
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