CustomerServiceandService-drivenLogisticsWhatiscustomerservice?ComponentsofcustomerserviceServicelevelsvscostsService-drivenlogisticssystemSetCSprioritiesServiceis…SmilingtoeveryoneExcellentineverythingyoudoReachingouttoeverycustomerwithhospitalityViewingeverycustomerasspecialInvitingyourcustomertoreturnCreatingawarmatmosphereEyecontactthatshowswecareWhoisthecustomer?Canyousuggestthecustomergroupsforalogisticsoperator?Consumer/enduserCustomersofthecompanyOtherfunctionsofthecompanysuchassalesandmarketingOthersectionsoflogisticsdepartment

Whatiscustomerservice?CSisthecollectionofactivitiesperformedinawaythatkeepscustomershappyandcreatesinthecustomers’mindtheperceptionofanorganizationthatiseasytodobusinesswith.Itisanexcellentcompetitiveweaponandhasanadvantageoverpricecompetition.CSinlogisticsLogisticsispartofthesupplychainthatplans,implements,andcontrolstheefficient,effectiveflowandstorageofgoods,servicesandrelatedinformation,fromthepointoforigintothepointofconsumptioninordertomeetcustomerrequirements. --CouncilofLogisticsManagementTheultimatepurposeoflogisticsLogisticsistodeliver

-(therightproduct) -totherightplace -attherighttime -intherightquantity -attherightquality -attherightprice(cost) -fortherightcustomerCustomerserviceTheroleofCSistoprovide“time&spaceutility”inthetransferofgoodsandservicesbetweenbuyerandseller.I.e.,thereisnovalueintheproductorserviceuntilitisinthehandsofcustomersorconsumers.Logisticsistomakeproductsorservices“available”.Supplychainthinkingisstrengtheningthelinksbetweenvendorsandtheircustomers.ComponentsofCSPre-transactionelements1.WrittenCSpolicy;2.organizationstructureTransactionelements1.Ordercycletime;2.orderfillrate3.Inventoryavailability;4.orderstatusinformationPost-transactionelements1.Availabilityofspares;2.productwarranty3.CustomercomplaintsBasic&value-addedservicesNocompanyprovidesallitscustomerswiththesamelevelofservice.Definitionofbasicandvalue-addedservices–P52LevelsofCSThetrade-offbetweenlevelofCSandcostsCostofservice708090100Servicelevel(%)105.532.5ThelogisticsimplicationofCSOnemajormeasurementisDIFOT–deliveryinfullontime.DeliveredcompletetothequantitiesorderedDeliveredexactlytothecustomersrequesteddateandtimeNodeliveryproblems(damage,shortage,refusal,etc)AccurateandcompletedeliverydocumentationAperfectorder–DIFOTIftheactualperformanceofallordersforthelast12monthswasasfollows: on-time:90%in-full:80%error-free:70% theactualperfectorderwas: 90%x80%x70%=50.4%SetCSprioritiesTheParetoor80/20ruleprovidesbasisofacost-effectivestrategy.Notallourcustomersareequallyprofitablenorourproducts,thehighestservicelevelshouldbegiventokeycustomersandkeyproducts.SetCSpriorities80/20rule:80%ofprofitsofthebusinesscomesfrom20%ofcustomers.80%oftotalcostsofservicewillbegeneratedfrom20%ofcustomers.ABC%ofProduct/customers5%15%80%profitability20%50%30%Correspondinglogisticspractice80/20ruleprovidesabasisforinventorycontrol productcategory stockavailabilityA99% B97%C90%80/20RulereviewmaintaindevelopdevelopKeyproducts&keyaccounts(protect)A BCCUSTOMERSABCPRODUCTS80/20RuleIfthe80/20ruleappliesbothtoproductsandcustomers,thenallbusinessesareactuallyverydependentonaveryfewcustomersbuyingafewhighprofitproductlines.20%ofcustomersbuying20%ofproducts= 4%ofalltransactionsWhichprovides: 80%of80%oftotalprofit=64%Casestudy–HandyAnd,IncIsthisaCSproblem?Whyorwhynot?Logisticschannelshandlethephysicalflowofgoodsorservices.IstheproblemdiscussedinHandy