Logistics & Customer Service

7/29/2019 Logistics & Customer Service

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That part of the supply chain process thatplans, implements, and controls the efficient,

effective flow and storage of goods, servicesand related information from the point oforder to the point of consumption in order tomeet customers requirements


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Ensuring the availability of the Right product

Right quantity Right condition

Right Place

Right time

Right customer Right cost


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Emphasis on Quality and meeting customerrequirements

Change influence of large buyers such asWal-Mart

Increasing sophistication of all buyer types industrial and consumer


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Logistics impacts and has relationship witheconomy

Cost of business logistics increasing Transportation covers largest percentage of

logistics costs (rising due to inventorymanagement practices)


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Logistics adds value to a product Place utility - moving goods to points where

demand exists Time utility - moving goods to points at a

specific time Allows for economic development and

specialization Affects land values due to increased accessibility


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Interfaces with production in determining thelength of the production run

Interfaces with marketing in selling the product price - size, quantity

product - dimensions, packaging

promotion - inventory, channels

customer service Relationship with all areas of a company


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Transportation - physical movement or flowof goods

Storage - inventory management andwarehousing

Packaging - affected by product andtransportation

Materials handling - movement in, from, andwithin a warehouse


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Order fulfillment - completing customerorders, affects lead time

Forecasting - predicting inventory necessaryto fulfill customer demand

Production planning - product necessary tocover market

Purchasing - procurement of supplies, affectstransportation


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An activity or function to be managed such asorder processing or handling customer

complaints Actual performance within a certain period Part of an overall corporate philosophy


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Customer service is Having the right product, atthe right time, in the right quantity, without

damage or loss, to the right customer. It is defined as The measure of how well the

logistics system is performing in providing timeand place utility for a product or service.

It has a significant impact on creating demandand retaining customer loyalty

It refers to the chain of sales-satisfying activities


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1. Pre transaction elements2. Transaction elements and

3. Post- transaction elements


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Pre transaction elements

i. Written policy statementii. Customer receives policy statementiii. Organizational structureiv. System flexibilityv. Technical and management services

Transaction elements

i. Stock out levelii. Order informationiii. Elements of order cycleiv. Expediting shipmentsv. Transshipmentvi. System accuracyvii. Order conveniencesviii. Product substitution

Post transaction elements

i. Installation, warranty alterations, repairs andservice parts

ii. Product packagingiii. Product trackingiv. Customer claims, complaints, returns

v. Temporary replacement of products

Customerservice


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I. Effects of customer service on salesII. Effects of customer service on customer

loyalty


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Range of

transition

Range of

transition

Logistic customer service

Threshold Diminishing returns Decline

sales


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Differentiation Competitive advantage

Focus


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Type of customers- Brand loyalRepeat purchase

behavior

Life time value = (Average transaction value)*

(Yearly frequency of purchase)*(Customer life expectancy)


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1. Identifying customers service needs2. Defining customer service objectives

3. Designing the logistics systems


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a) Availabilityb) Operational performance and

c) Service reliability


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Value added services Customer satisfaction and success

I. Customer expectationsII. Customer success Time based logistics


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1. Reliability2. Responsiveness3. Access

4. Communication5. Credibility6. Security7. Courtesy8. Competency9. Tangibles10. Knowing the customer


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1. Anticipatory business model2. Responsive business model


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Forecast Buycomponents

and materials

Deliver tocustomer

Sell

Manufacture

Warehouse


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Sell

Buycomponents

and materials

Manufacture

Deliver


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Logistics & Customer Service

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