Three C’s

CUSTOMER

CUSTOMER SERVICES
VALUE

COST DIFFERENTIAL
COMPANY COMPETITOR

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Definition And Scope Stage Of Process

Process For Providing Significant Value- 1. Pre Transaction
added Benefits To The Customer In A
Efficient Way 2. Transaction
3. Post Transaction

Activity Performance Phil.Of Mngt.

Process Efficient Customer- Focused

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 Pre Transaction
Indicator Performance

Pre Transaction
Relate To Corporate Policies Or
Program: • Stock Availability
• Target Delivery
• Written Customer Service Policy • Response Time To Queries
• Accessibility
• Organization Structure
• System Flexibility

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Transaction
Indicator Performance

Concern With Customer Service
Variable Directly Involve In
Performing The Services
• Order Cycle Time
• Inventory Availability
• Order Fill Rate
• Order Status Information
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Transaction
• Order Fill Rate
• On Time Delivery
• Back-orders
• Shipment Delay
• Product Substitutions
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 Indicator Performance
Post Transaction Post Transaction
Elements That Are Generally
Supportive Of Product While In • First Call Fix Rate
Use • Customer Complaints
• Returns/claim
• Availability Of Spare Part • Invoice Error
• Call-out Time • Service Part Availability
• Product Tracing/warranty
• Customer Complaints, Claims, Etc.

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Quality ? Dimension of Service Quality

• Fitness for Use • Tangible

Appearance of physical facilities, equipment, personnel,
and communication material
• Conform To Specification
• Reliability
Ability to perform the promised service dependability and
accurately
• Responsiveness
Willingness to help customers and provide prompt service

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 Dimension of Service Quality Service Standard
• Security
1. Order Cycle Time
Freedom from danger, risk, or doubt 2. Stock Availability
• Access 3. Order Size Constraint
4. Ordering Convinience
Approachability and ease of contact
5. Frequency Of Delivery
• Communication 6. Delivery Realibility
Keeping customers informed in language they can 7. Documentation Quality
understand and listening to them 8. Claims Procedure
9. Order Completeness
• Understanding the Customer 10. Technical Support
Making the effort to know customers and their needs 11. Order Status Information

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Composite Service Index Focused On Customer

Aggregat’s Indicator Of Customer
Service That Can Be Used As A
Management Tool
CSI = Sum Of ( Iw X Pl)
Iw : Importance Weight Of Service Element
Pl : Pereformance Level Of Service Element
1. Customer Needs Are More Basic Than
Product Or Services
2. Product Become Worth Due To Services
Has Added Value To The Core Product
3. Product And Services Become Meaningful
Only When Its Available And Positioned
From The Customer’s Perspective At The
Time And Place Required
4. Volume Is Secondary To Profit

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 Service Surround Customers’ Service Need

1. Identify The Key Component Of

SERVICE
Customer Service
2. Establish The Relative Importance
CORE Service Components
3. Identify Cluster Of Customer
PRODUCT

SURROUND

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Setting Customer Service Priorities Priorities

1. Pareto Customer
2. Profit Contribution A B C
K
E DEVE
Y LOP
LOW HIGH
A P
r
SEEK COST PROVIDE HIGH H
B DEVELOP MAINTAIN
o
REDUCTION AVAILABILITY I
V G d
O H
L u
U
M
c
E
L C REVIEW t
REVIEW JIT DELIVERY O
W

PROFIT CONTRIBUTION
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 Types Of Service I. Basic Service Capability

1. Basic Services Basic Capability To Satisfy The Customers

Customer Service Program Upon Which A Firm Builds Its
Fundamental Business Relationship

2. Zero Defect Services

Customer Service Leads To Perfect Order Performance

3. Value Added Services

Unique/specific Activities That Firm Can Jointly Work Out To
Increase Effectiveness And Efficiency
Availability Performance Reliability

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A. Availability Measurement Of Availability

Capability to have goods (inventory) when 1. Stock Out Frequency
it is desired by a customer How Many Times Demand for Specific Product
Exceeds Stock Available.
2. Fill Rate
Number of Goods That Could Not Be Fulfill
Promptly
Operating Safety 3. Orders Shipped Complete
Stock Stock Number of Order That Could Be Fulfill Completely
and Promptly

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 B. Operational Performance Speed
Capability To Give The Services To The
Customers Measured By:

1. Speed Elapsed Time From When An Order Is

2. Consistency Placed Untill Shipment Arrival
3. Flexibility
4. Mulfunction/recovery

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Consistency Flexibility
Ability To Perform Orders At The Ability To Handle Extraordinary Customer
Expected Delivery Time Over A Large Service Request Caused By:
Number Of Performance Cycle
1. Modification In Basic Service Arrangement
2. Support Of Unique Sales/ Marketing Program
3. New Product Introduction
4. Product Phase Out
Compliance To Delivery Commitment 5. Disruption In Supply
Over Time 6. Product Recall
7. Customization

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 Mulfunction/Recovery C. Reliability
Ability To Prevent Mulfunction Or To Ability To Comply Planned Inventory
Prevent/ Accommodate Special Availability And Operational
Situation Performance

Measurement
1. Variable
Contingency Plans 2. Units
3. Base

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II. Value Added Services Competitive Service Strategy

• Cost Leadership
1. Customer focus services –
–
Seeking Out Low Cost Customer
Standardizing a Custom Service
2. Promotion focus services –
–
Reducing the Personal Element in Service Delivery
Reducing Network Cost
3. Manufacturing focus services – Taking Service Operation Off-line
• Differentiation
4. Time focus services – Making the Intangible Tangible
– Customizing the Standard Product
5. Basic services – Reducing Perceived Risk
– Giving Attention to Personnel Training
– Controlling Quality
• Focus
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 Challenge For Manager Challenge For Manager
• Low Labor Intensity
– Capital Decision • Low Interaction/customization
– Technological Advances – Marketing
– Managing Demand to Avoid Peaks and to Promote – Making Service Warm
off Peaks – Attention to Physical Surrounding
– Scheduling Service Delivery – Managing Fairly Rigid Hierarchy With Need for
Standard Operating Procedures
• High Labor Intensity • High Interaction/customization
– Hiring – Fighting Cost Increases
– Training – Maintaining Quality
– Methods Development and Control – Reacting to Consumer Intervention in Process
– Employee Welfare – Managing Advancement of People Delivering
Service
– Scheduling Workforces – Managing Flat Hierarchy With Loose Subordinate
– Control of Far-flung Geographical Location Superior Relationships
– Setup of New Unit – Gaining Employee Loyalty
– Managing Growth
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