6customerservicescm2009 - Prof . Dr. Füsun Ülengin 1...

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Unformatted text preview: Prof . Dr. Füsun Ülengin 1 Fusun Ulengin, 2009 Customer Service in Planning Triangle PLANNING ORGANIZING CONTROLLING Transport Strategy • Transport fundamentals • Transport decisions Customer service goals • The product • Logistics service • Ord. proc. & info. sys. Inventory Strategy • Forecasting • Inventory decisions • Purchasing and supply scheduling decisions • Storage fundamentals • Storage decisions Location Strategy • Location decisions • The network planning process PLANNING ORGANIZING CONTROLLING Transport Strategy • Transport fundamentals • Transport decisions Customer service goals • The product • Logistics service • Ord. proc. & info. sys. Inventory Strategy • Forecasting • Inventory decisions • Purchasing and supply scheduling decisions • Storage fundamentals • Storage decisions Location Strategy • Location decisions • The network planning process 2 Fusun Ulengin, 2009 Customer Service Defined Customer service is generally presumed to be a means by which companies attempt to differentiate their product, keep customers loyal, increase sales, and improve profits. Its elements are:- Price- Product quality- Service It is an integral part of the marketing mix of:- Price- Product- Promotion- Physical Distribution Relative importance of service elements- Physical distribution variables dominate price, product, and promotional considerations as customer service considerations- Product availability and order cycle time are dominant physical distribution variables Customer service here 3 Fusun Ulengin, 2009 Service Level Optimization Optimal inventory policy assumes a specific service level target. What is the appropriate level of service? May be determined by the downstream customer Retailer may require the supplier, to maintain a specific service level Supplier will use that target to manage its own inventory Facility may have the flexibility to choose the appropriate level of service 5 Fusun Ulengin, 2009 Service Level Optimization Service level inventory versus inventory level as a function of lead time 6 Fusun Ulengin, 2009 Trade-Offs Everything else being equal: the higher the service level, the higher the inventory level. for the same inventory level, the longer the lead time to the facility, the lower the level of service provided by the facility. the lower the inventory level, the higher the impact of a unit of inventory on service level and hence on expected profit 7 Fusun Ulengin, 2009 Profit Optimization and Service Level Target inventory level = 95% across all products. Service level > 99% for many products with high profit margin, high volume and low variability....
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This note was uploaded on 11/10/2009 for the course LOGISTICS 20091 taught by Professor Fusunulengin during the Spring '09 term at Istanbul Technical University.

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6customerservicescm2009 - Prof . Dr. Füsun Ülengin 1...

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