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BALLOU04 - Logistics/Supply Chain Customer Service...

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4-1 Logistics/Supply Chain Customer Service “Logistics is no longer the ‘last frontier of cost reduction ,’ it’s the new frontier of demand generation .” Chapter 4
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4-2 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 Logistics service
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4-3 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
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Customer Service Elements Customer service Pretransaction elements Written statement of policy Statement in hands of customer Organizational structure System flexibility Technical services Transaction elements Stockout level Ability to back order Elements of order cycle Time Transship System accuracy Order conveniences Product substitution Posttransaction elements Installation, warranty alterations, repairs, parts Product tracking Customer claims, complaints Product packaging Temporary replacement of product during repairs 4-4
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4-5 Common Customer Service Complaints 12% Damaged goods 31% Product or quality mistakes 7% Other 6% Frequently cut items 44% Late delivery
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4-6 Most Important Customer Service Elements On-time delivery Order fill rate Product condition Accurate documentation
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4-7 Appraise This Measure of Logistics Customer Service Percent of customer orders shipped by customer request date Parker-Hannifin Corp.
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4-8
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