Customer Requirements

The recent issue that surfaced here in Ontario with incorrectly prepared chemotherapy formulations raises the issue of dealing with customer requirements in supply chains.

Customer requirements can be both explicit (stated requirements) and implied. To ensure fitness for purpose in the final offering, it is necessary to ensure that both types of requirements are well-understood. Too often, suppliers rely only on what the customer tells them. In these cases, only the stated requirements will be captured. Implied requirements are those types of requirements that are implied by how the customer is intending to use the product. By their nature, implied requirements can vary from customer to customer and application to application. Unless firms become adept at uncovering implied requirements, an information asymmetry is likely to exist which has the potential to cause failure when the product is actually used.

Information asymmetries often exist between suppliers and customers. The supplier knows the product, the customer does not; and the customer knows the application, while the supplier does not. These asymmetries become particularly important as the degree of product customization to customer needs increases. Unless these asymmetries are closed, the potential for significant economic loss and harm exists.

 

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s