Customer Service

A Key Element
in
Logistics Strategy

Customer service

Who is the customer ?

How does product Life cycle

impact Logistics strategy?

Few Cues affecting

Customer Perception of
Service Quality

Competence
Reliability
Responsiveness
Transaction security
Trustworthiness
Access

Basic Service Capability

AVAILABILITY
Stock out frequency
Fill rate
Orders shipped

PERFORMANCE
Speed
Consistency
Flexibility
Malfunctioning recovery

RELIABILITY

Customer Service
How much basic service should a
logistical system provide ?

Value Added Logistical Services

- Customized transportation
- Payment collection on delivery
- Price marking and labelling
- Product mixing and packaging
- Cross docking
- Reverse logistics
-consignment tracing and tracking

Physical distribution
performance cycle
Order processing

Order selection

Order transmission

Order transportation

Customer order

Order delivery
to the customer

Significance of physical
distribution performance
Itcycle
resolves conflicting interface between
marketing & manufacturing.

As marketing is dedicated to delighting

customers, it would like to maintain broad
product
line
with
high
inventory
regardless of each products profit
potential. By doing so, any customer's
requirement, no matter how small or large
would be satisfied.

Traditional mindset in manufacturing

is to control cost, which is achieved
by long production runs. Therefore,
a narrow line of products is mass
produced.

Inventories are kept to resolve the

inherent conflict between these two
philosophies.

How to reduce physical

distribution operational variance

Improve accuracy of forecast

Improve order management and

coordination with the customers.

Have responsive and flexible cycle.

Manufacture Support
Performance Cycle

It provides production logistics being

positioned
between
the
physical
distribution and procurement operations
of a firm.

Movement and storage of product,

materials, and semi-finished parts and
components between enterprise facilities
represent
the
responsibility
of
manufacturing support logistics.

Features of manufacturing
support performance
cycle. provision of materials and
Initiates
externally manufactured components at a
place and time needed.

After completion of manufacturing cycle

the finished goods inventory is allocated
and deployed either directly to the
customers or to distribution warehouses
for further customer shipment.

Procurement Performance
Cycles
Sourcing

Receiving

Order placement and

Expediting

Transportation

S
U
P
P
L
I
E
R
S

The procurement operations are identified

as inbound logistics.

International procurement often requires

large shipments necessitating the use of
barges, ocean going vessels, trains and
multiple truckloads for transportation.

Procurement performance cycles are

invariably longer excepting in those
cases where the value of material or
component may justify paying higher
freight
rates
for
faster
inbound
transport.

A critical issue in procurement is

uncertainty in respect of price change,
and/or supply discontinuity.

Reducing performance
cycle uncertainties

Use of electronic data interchange

Monitoring daily changes in workloads
Human resource availability
Availability of specialized unloading
and loading handling equipments
Establishing safety stock/ buffer
inventory to cover variances so as to
avoid delays.