Customer Accomodation Revised[1]

Customer Accomodation Revised[1] - Customer Accomodation...

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Unformatted text preview: Customer Accomodation Accomodation …. for the purpose of conforming to customer service requirements. Customer Defined Customer End user as the customer. Firms within the supply chain are Firms customers. customers. Any delivery location could be considered Any a customer. customer. Focal Point Focal Regardless of the motivation and Regardless delivery purpose, the customer being served is the focal point and driving force in establishing logistical performance requirements. Explain! performance Customer Focused Marketing Customer The marketing concept. Greater efficiency and effectiveness in Greater marketing. marketing. Differentiation in service levels. Why? Differing requirements. Differing willingness to pay Concept of Utility Concept Four economic utilities have value to Four customers: customers: Form Possession Time Place Logistics is directly responsible for which Logistics directly of these? of Transactional vs. Relationship Marketing Marketing Transactional = short term interaction Relationship = long-term relationships. Supply Chain Management emphasizes Supply transactional relationships. transactional Service Outputs Service Efficient supply chains help overcome Efficient space, time, quantity, and assortment discrepancies. discrepancies. A discrepancy in time refers to the discrepancy difference between production and consumption, i.e., goods are produced at one time and consumed at another. Does this apply to services as well? Does Assortment and Quantity Assortment Refers to the fact that manufacturers Refers typically specialize in producing large quantities of a limited variety of goods. goods. Consumers, on the other hand, Consumers, require small quantities of a large variety of goods. variety Bucklin’s Theory Bucklin’s Four basic service outputs required to Four accommodate customer requirements. accommodate Spatial Convenience Lot Size Waiting Time Product Vaiety and Assortment Spatial Convenience Spatial Refers to the amount of shopping time Refers and effort that will be required by the customer. customer. Higher levels of spatial convenience are Higher achieved if a good is available in a large number of locations. number Distribution Intensity is related to product Distribution categories (shopping, convenience, and specialty goods). specialty Lot Size Lot Refers to the number of units that must Refers be purchased in each transaction. be Smaller lot sizes enable the matching of Smaller purchasing and consumption requirements. requirements. Larger lot sizes suggest that the Larger consumer is responsible for holding inventory. inventory. Waiting Time Waiting Amount of time between placing the Amount order and receiving the product. order Also known as order cycle or Also replenishment cycle or performance cycle. cycle. Implications for inventory levels? Flexibility important to consumers. Product Variety and Assortment Assortment Depends on the nature of the Depends customer, e.g., grocery store vs. specialty shop. specialty Related to marketing strategy, Related including market target and differentiation. differentiation. Customer Service Customer Represents logistics’ role in fulfilling the Represents marketing concept. marketing Customer service adds value throughout Customer the supply chain. Explain! the Does the cost associated with achieving Does a specific level of service represent a sound investment? Explain! sound Dimensions of Customer Service Service Availability = capacity to have inventory Availability available when desired. Americans are spoiled in this respect. spoiled Stockout frequency = occurs when no Stockout product is available to fulfill customer demand. No stockout if not demand even if products are not available. Why? even Availability Continued Availability Fill Rate = percentage of items requested Fill that are available, e.g., 100 items requested – 98 are available = 98% fill rate (should be aggregated across all customers over time). customers Orders shipped complete = percentage Orders of orders that had 100% fill rates. of Operational Performance Operational Speed – time from placing the order until Speed receiving the order. receiving Consistency – How often does the actual Consistency cycle comport with the planned cycle. cycle Impact on the consumer? Flexibility – Ability to accommodate Flexibility special situations. special Malfunction recovery. Customer Satisfaction Customer Expectancy Disconfirmation Expectancy Paradigm Paradigm A model of customer satisfaction, model figure 3.1, page 57. figure Note the six gaps that can lead to Note dissatisfaction. dissatisfaction. Figure 3-1 Satisfaction and Quality Model Model Gap 1: Knowledge Gap The difference between customer’s real The expectations and managers’ perception of those expectations. of A fundamental lack of knowledge and fundamental understanding of the customer. understanding Can be remedied through more effective Can communication. communication. Gap 2: Standards Gap Exist when internal performance Exist standards to not meet customer expectations. expectations. Problem occurs because even if a Problem firm meets their internal goals, customers are not satisfied. customers Gap 3: Performance Gap Exist because of a gap between Exist performance standards and actual performance. performance. Operational limitations. Gap 4: Communications Gap Customers failing to communicate their Customers real needs and expectations. real Firms failing to communicate their real Firms capabilities. capabilities. The danger of overpromising or “the The destructive salesman.” destructive Gap 5: Perception Gap Difference between actual performance Difference and customers’ perception of performance. performance. You are only as good as your last You delivery. delivery. Issue of immediacy and recall. Remedy – communication. Gap 6: Satisfaction/Quality Gap The existence of any of the above gaps The leads to customer perception that performance is not as good as expected. performance In other words, these gaps lead to In customer dissatisfaction. customer Danger in this? Limitations of Customer Satisfaction Satisfaction Satisfied customers are not necessarily Satisfied happy customers. happy There are degrees of satisfaction, see There figure 3.2, page 59. figure Competitors may provide superior Competitors service at the same price. service Satisfied customers are not necessarily Satisfied loyal customers. loyal Figure 3-2 Satisfaction Is Not the Same as Happiness as Evolution of Management Thought Thought Table 3.2, page 60. Philosophy is related to focus. Customer service = Meet internal Customer standards standards Customer satisfaction = Meet Customer expectations expectations Customer success = Meet customer Customer requirements. requirements. Table 3-2 Evolution of Management Thought Thought Table 3-2 Evolution of Management Thought Thought Forecasting Forecasting Accommodating customer requirements Accommodating requires a forecast. requires The forecast drives the process. Explain! Accuracy of forecasts are more critical Accuracy with long replenishment cycles and significant economies of scale. Why? significant To allow for production and To transportation economies. transportation Forecasting Con’t Forecasting Accurate forecasts are not as critical Accurate when replenishment cycles are short and economies of scale not as large. economies Focus in this situation shifts to Focus responsiveness and flexibility. responsiveness Forecasting Requirements Forecasting Logistics systems requires forecasts to Logistics match demand with the capabilities of the supply chain. supply Logistics forecasts: Support Collaborative Planning Drive Requirements Planning Improve Resource Management Forecasting Components Forecasting Forecast components include: Base Demand Seasonal Adjustments Cyclic Consideration Affects of Promotion Irregularity of Demand Forecasting Techniques Forecasting Qualitative = based on experience, Qualitative surveys, panels, consensus meetings. surveys, Quantitative = examples include time Quantitative series and causal such as regression. series Forecasting error is often high. Why? ...
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