Logistics & Supply Chain Management 1Customer Service Unit 3.2 (2)

7/29/2019 Logistics & Supply Chain Management 1Customer Service Unit 3.2 (2)

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Logistics & Supply Chain

ManagementUnit 3: Customer Service

Strategy

Karen AdairCaribbean Maritime Institute


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Important Issues in Customer

Service delivery LSCM Four major areas that customer service must

address:

Reduction order lead time

Ensure reliability, proper frequency quality andflexibility of delivery

Optimize stock level within the supply chain

Minimize total cost of goods flow


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Customer Service

An important issues which must be address inthe delivery of customer service are:

A balance between the level of service provided

and the cost of that provision is necessary toassure a suitable trade off

Differentiate between the core product(technical content) and service delivery


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Customer Service

Customer satisfaction is a key indicator ofcompetitiveness in logistics and supply chainmanagement as failure to do so will result in lossof market share

Customer satisfaction is critical to successbecause:

a. of growing professionalism of buyers

b. market have become increasingly service

sensitive


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Customer Service

c. development of new ideas such as relationshipmarketing is important in the retention ofcustomers

d. diminution of brand loyalty


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Components of Customer Service

Maybe classified as

a. Logistical

b. Multifunctional

Logistical

Divided into:

a. Pre-transactionb. Transaction

c. Post-transaction


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Logistical

Pre-transaction: services provided tocustomers prior to actual transaction e.g.information on ordering process

Transaction: elements that are directly relatedto the physical transaction e.g. order

preparation

Post-transaction element that are done afterdelivery has taken place e.g. claim process


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Multi-dimension Refers to the fulfillment of customer service

requirements across a range of function in anorganization

Indices of customer service that are commonlyused are:

a. Time taken to fulfill an orderb. Dependability: companys ability to meet its

guaranteed delivery timec. Communication: ease with which orders can be

takend. Flexibility: ease with which systems can be

changed so as to meet changing customer


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Service Quality

Refers to the extent to which the customer isexperiencing the level of service that he/she isexpecting i.e. expectation versus experience

A mismatch between expectation and experience isreferred to as a Service Quality Gap

Service Quality Gap = perceived performance X 100

desired expectation


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Service Quality

Examples of Measuring the Service Gap

Actual service v Perceived Service Gap: thedifference between the service that the supplier isproviding and that which the customer thinks thathe/she is receiving. Difference usually arisebecause of different standards of measurement

Service Standard v Service Delivery Gap: this is thedifference between actual and planned service andis an indication of inefficiencies in the deliverysystem


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Customer Service Policy

Must be developed according to customersneeds

May require segmentation of customers Objective of policy is to meet minimum customer

requirementMethodology used in the development ofPolicya. Re-survey preparationb. Needs Assessmentc. Gap Analysisd. Development of specific customer service

packages for each segmente. Monitor and control


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Levels of Customer Service

Must be balance against cost

Way in which balance occurs depends on type oforganization


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Measuring Customer Service

Must be done according to customer needs aswell as operational requirements

For logistics companies key measurementindicator include:

a. Number of orders that have been completedsatisfactory against target

b. Number of line items delivered from a singleorder against target

c. Value of orders completed against targetd. Non-delivery weakness: damage, refusal and

shortage against target

Documents

Logistics & Supply Chain Management 1Customer Service Unit 3.2 (2)