2011 Lscm Lesson2 Customer Service
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Transcript of 2011 Lscm Lesson2 Customer Service
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Customer Service:Customer Service:
A Key Element in Logistics StrategyA Key Element in Logistics Strategy
Chapter 2Chapter 2
Logistics ManagementLogistics Management- Vinod V. Sople- Vinod V. Sople
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ContentsContents
Introduction
Customer Service
Customer Service for Competitiveness
Customer Service Phases / Elements
Importance of Customer Service
Objectives of Customer Service
The Perfect Order
Seven R Rule
Customer Service Strateg
Customer Service !udit
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IntroductionIntroduction
Customer service is a measure of the
effectiveness of a logistical sstem in creatingtime"and"place utilities
#ar$eters vie% customer service %ithin thelarger conte&t of building customer relationship
'ence organi(ations constantl strive to deliversuperior customer value through customerservice) %hich is a $e element in the logistics
strateg In the conte&t of *ogistics) customer service is
more than just transportation of a shipment
from point ! to point +
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... Introduction... Introduction
The goal as a company is to have customerThe goal as a company is to have customer
service that is not just the best but legendaryservice that is not just the best but legendary
- Sam Walton- Sam Walton
In the conte&t of logistics customer service is
about
, Providing customers %ith information) options -e&pertise to ma$e the right decision
, 'elping the supplier understand trends anddnamics of mar$ets
, .or$ing %ith the customer to deliver the bestpossible value for their mone
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Customer SericeCustomer Serice
Customer Service is a set of activities and
programs) designed and implemented b abusiness firm to ma$e customers buinge&perience more re%arding
, These activities enhance the value of a productor service the customer gets from the seller
, 0ood customer service builds customer loyaltycustomer
loyalty%hich generates positive %ord"of"mouth
communication %hich attracts ne% customers, 0ood customer service is the bases for all
Customer Relationship Management (CRM)Customer Relations
hip Management (CRM)programs that man leading firms implement
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Customer Serice "or CompetitienessCustomer Serice "or Competitieness
Customers base their evaluation of a service on their
perception These perceptions are affected b
, The actual service provided 1realit2
, Intangible elements of service aspects %hich areusuall ver difficult to evaluate accuratel
Thus there gaps bet%een client perceptions andactual service provided
These gaps ma arise due to, Communication
, Standards adopted
, Service deliver
, Customer $no%ledge
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... Customer Serice "or Competitieness... Customer Serice "or Competitieness
CommunicationCommunication
, The actual service provided mabe different from%hat is communicated through advertisements -promotional campaigns
Standards AdoptedStandards Adopted
, Service standards adopted mabe different fromcustomers e&pectations
Service DeliveryService Delivery
, Services provided mabe different from servicestandards of the firm
Customer knowledgeCustomer knowledge
, The firm ma fail to understand customers perceptionof the service standard
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... Customer Serice "or Competitieness... Customer Serice "or Competitieness
3irms that can identif these gaps and bridgethem) can succeed in
, Enhancing customer satisfaction levels
, Remaining competitive, Stimulating repeat purchase
Some elements that affect client perception are
, Competence
, !ccess
, Reliabilit
, Responsiveness
, Transaction Securit
, Trust%orthiness
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... Customer Serice "or Competitieness... Customer Serice "or Competitieness
CompetenceCompetence
, The manner - accurac in %hich information is providedb the firm through product brochures) manuals) %ebsites)sales tal$ about the compans products and the serviceofferings
AccessAccess
, The ease %ith %hich the customer %ill have access toinformation on products - services before placing anorder) status of the order placed) status of product
complaints) claims - damages in the post"sales phase
ReliabilityReliability
, 4eliver of the product / services as promised in terms ofplace) time - 5ualit
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... Customer Serice "or Competitieness... Customer Serice "or Competitieness
ResponsivenessResponsiveness
, Returning customer calls) e"mails) letters etc ontime
, Resolving customer problems or complaints %ith
speed during all three phases of transactions
Transaction SecurityTransaction Security
, The confidentialit of customer information -
transactionsTrustworthinessTrustworthiness
, +uilt through evolving policies on product return)
%arrant and guarantee and honoring commitments
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... Customer Serice "or Competitieness... Customer Serice "or Competitieness
*ogistics helps in creating time - place utilities of
the product that satisfies customers needs In todas competitive mar$ets) the competitiveness
of a firm is judged b ho% efficientl - effectivel itmanages creation of time - place utilities to
, !vail of sales opportunities
, Create ne% opportunities for repeat sales to thesame customers
'ence logistics competenc is critical to customerservice planning and needs to be developed as acore competenc for sustainable competitiveadvantage for survival - gro%th
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Customer Serice 'hases ( )lementsCustomer Serice 'hases ( )lements
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... Customer Serice 'hases ( )lements... Customer Serice 'hases ( )lements
Customer service is a measure of ho% logistics createstime - place utilities for products - services
+uers loo$ for value for mone the spend
The seller tries to deliver superior customer service andstri$ing a balance bet%een customer satisfaction -
costs #eaning of customer service varies %ith the
organi(ation) product being mar$eted and transactionphase the purchase is going through
There are 6 phases to the customer service process
4egree of importance of each phase varies %ithorgani(ation) depends on the product - customerre5uirements
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... Customer Serice 'hases ( )lements... Customer Serice 'hases ( )lements
re!transaction phasere!transaction phase
Phase related %ith setting polic for defining theservice level - related activit) in 5ualitative -5uantitative terms
! non"routine activit
Provides guidelines to operating people regarding thedos / donts - limitations of the customer servicesprovided b the organi(ation
Creates a service platform to serve customers so asto
, +uild credibilit in the mar$et
, Create of good image %ith e&isting - prospectivecustomers
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... Customer Serice 'hases ( )lements... Customer Serice 'hases ( )lements
""" re!transaction phase""" re!transaction phase
Important elements of this phase
7 Customer service polic
7 Organi(ation building
7 Structuring the service
, Customer service policyCustomer service policy
7 Provides the service policy statement in written formservicepolicy statement in written form
7 Indicates the service standards of the organi(ation
7 !t this stage) organi(ation %ill have to evolve a policframe%or$ for performance measures) evaluationmethods) reporting structure - re%ard structure
7 Customer education
7 Sstem design
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... Customer Serice 'hases ( )lements... Customer Serice 'hases ( )lements
""" re!transaction phase""" re!transaction phase
, #rgani$ation building#rgani$ation building
7 'erein the service policy statement is implementedservicepolicy statement is implemented
7 Organi(ation %ill have to
Create relevant hierarch) reporting structure)
delegate authorit) allocate responsibilit
Provide customers %ith contact persons name /phone numbers for information on order status)dispatch status) %arrant claims etc
Contact person to be given full authorit in ta$edecisions on customer service %ithin their domain)made accountable for decisions ta$en
Implement a proper re%ard sstem to motivate
emploees involved in customer service
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... Customer Serice 'hases ( )lements... Customer Serice 'hases ( )lements
""" re!transaction phase""" re!transaction phase
, Structuring the serviceStructuring the service7 +asic service structure depends on customer
standards) industr standards and the servicestandard the organi(ation %ants to $eep
7 !lso depends on the tpe of product / service) stage ofP*C the product is in , %hen the product is in maturitstage) competition is fierce) firm can gain competitiveadvantage through superior customer service
7 Service innovation is a must for sustainablecompetitive advantage
7 Important element of service is its deliver %hichvaries %ith the product - clients need " firm %ill have
to allocate and coordinate resources for this purpose
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... Customer Serice 'hases ( )lements... Customer Serice 'hases ( )lements
""" re!transaction phase""" re!transaction phase
, """ Structuring the service""" Structuring the service
7 e8g8
E&ide Industries *td8 introduced +at"#obile Service %hichoffers free van service for batter related problems of vehiclesirrespective of brand of batter
Service provided in all metro cities to vehicles stranded onhigh%as
E&ide Industries *td8 operates this service through its o%nfleet of vans %ith e5uipment installed in them - technicians
carring an inventor of ne% batteries dedicated to the service
#onitoring) coordinating - controlling the movements of vansis a tedious logistics service tas$
This value"added service has borne results in the form of
customer loalt - customer shift from competitors to E&ide
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... Customer Serice 'hases ( )lements... Customer Serice 'hases ( )lements
""" re!transaction phase""" re!transaction phase
, Customer educationCustomer education
7 Re5uired for minimi(ing customer complaints on productdeliveries) product operations) maintenance) spare partsinventor) service centers) freight charges) transitdamages) product recall) limits of %arranties / guarantees
7 9suall done through user manuals) training) seminars -%or$shops
, System designSystem design
7 Involves developing a sstem %hich ans%ers all possible5ueries in the customers mind before order placement
7 Sstem mabe manual or full automated
7 Essential to implement fle&ibilit to ta$e care of unplanned
events
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... Customer Serice 'hases ( )lements... Customer Serice 'hases ( )lements
Transaction phaseTransaction phase
Customer service during this phase is associated%ith routine tasks per%ormed in the supplyroutine tasksper%ormed in the supplychainchain
:eed to be coordinated for the entire sstem to beeffective - efficient in delivering the desiredstandard of customer service
;arious elements involved in this phase
7 Order fulfillment reliabilit
7 4eliver consistenc
7 Order convenience
7 Order postponement
7 Product substitute
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... Customer Serice 'hases... Customer Serice 'hases
""" Transaction phase""" Transaction phase
, #rder %ul%illment reliability#rder %ul%illment reliability
7 #ost important factor herein is reliability to fulfill thereliability to fulfill theorder within the promised time period, with respect toorder within thepromised time period, with respect toquality & quantity of product orderedquality & quantity of product ordered
7 This re5uires close coordination - management of thevarious components of the order ccle vi( orderprocessing) material planning) allocation) pic$ing)pac$ing - transportation
, Delivery consistencyDelivery consistency7 Organi(ation must ensure deliveries happen
consistentl
7 Inconsistent deliveries ma result in customer
dissatisfaction or production disruptions at customer end
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... Customer Serice 'hases ( )lements... Customer Serice 'hases ( )lements
""" Transaction phase""" Transaction phase, #rder convenience#rder convenience
7 Refers to the ease %ith %hich customer can
place an order7 +arriers to convenience are paper%or$
re5uired b supplier) compliance to variousprocedures) comple& pament terms) poor
communication net%or$ and lac$ ofcoordination in the suppliers sales net%or$
7 In competitive mar$ets this could result in loss
of sales orders - reduction in customer base
i h ( lC S i 'h ( )l
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... Customer Serice 'hases ( )lements... Customer Serice 'hases ( )lements
""" Transaction phase""" Transaction phase
, #rder postponement#rder postponement
7 3or some reason) customer ma re5uire part or anentire order to be postponed or deliveries to happen in aphased manner
7 This ma cause production reschedules at supplier end
7 The organi(ation must be fle&ible enough to cater to this
, roduct substituteroduct substitute
7 If a condition arises %herein the product ordered cannot
be shipped due to some manufacturing or 5ualitproblems) supplier ma offer a substitute product ofsimilar or better 5ualit) in order to retain the customer
7 3or obtaining customers consent for a productsubstitute) supplier needs a closer interaction - clearcommunication %ith the customer
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... Customer Serice 'hases ( )lements... Customer Serice 'hases ( )lements
ost!Transaction phaseost!Transaction phase This phase deals primaril %ith customercustomer
satis%action & building a long term relationshipsatis%action & building a long term relationship
Involves commitment of resources to offer desired
level of service ;arious elements involved in this phase
7 Order status information
7 Customer complaints) claims - returns
7 Product installation) commissioning - technicalsnags
7 Customer education - training
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... Customer Serice 'hases ( )lements... Customer Serice 'hases ( )lements
""" ost!Transaction phase""" ost!Transaction phase
, #rder Status 'n%ormation#rder Status 'n%ormation7 !fter an advance part / full pament of the product)
customers need constant information on order status
7 3or this purpose organi(ations provide consignment trac$ingon their %ebsites
7 Organi(ations can provide order status information throughmore modern modes such as emails / sms alerts
, Customer Complaints Claims & ReturnsCustomer Complaints Claims & Returns
7 The sellers role / responsibilit does no end %ith dispatch ofproduct to customer
7 Organi(ations must provide mechanisms to handle postsales activities such as complaints) goods damaged intransit) incomplete / incorrect shipments) product recalls
7 Implemented through reverse logistics
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... Customer Serice 'hases ( )lements... Customer Serice 'hases ( )lements
""" ost!Transaction phase""" ost!Transaction phase
, roduct installation commissioning & technicalroduct installation commissioning & technicalsnagssnags
7 Several technical products need supplier to provideafter"sales service such as installation - commissioning)
servicing product brea$"do%ns / failures during %arrantperiods
7 Implemented through a separate set"up for after"salesdepartments / teams
, Customer education & trainingCustomer education & training
7 In case of technicall comple& products) it is necessarto educate - train customers
7 Implemented through product manuals) training%or$shops - demonstrations
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*+,ecties o" Customer Serice*+,ecties o" Customer Serice
Objectives of customer service are
, 4elivering perfect orders
, Creating competitive value b delivering Seven R ;alueto customers
'er"ect *rder'er"ect *rder ! percentage of occasions on %hich customersre5uirements are met in full
Is a customer order measure for logistical 5ualit)
%hich in turn indicates abilit to provide customerservice
Is a customer order %hich is fulfilled in all respects vi(time) place) 5uantit) fault free installation anddocumentation
" * d' " t * d
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2$
... 'er"ect *rder... 'er"ect *rder
, Represents ideal performance
, #eets the follo%ing standards
7 4elivered complete? all items delivered in the5uantities re5uested
7 4elivered on time) using the customer@sdefinition of on"time deliver
7 Complete and accurate documentation
1including pac$ing slips) bills of lading) andinvoices2 to support the order
7 4elivered in perfect condition and in the correctconfiguration to be used b the customer /
faultlessl installed
' " t * d' " t * d
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2%
... 'er"ect *rder... 'er"ect *rder
Perfect order as a percentage is usuall measured across allcustomers over a period of time
Can also be measured at individual customer level or for customersegment or for individual emploee or for distribution center or countr
! common measure of perfect order is on!time in!%ull and error!%reeon!time in!%ull and error!%ree
To calculate the actual service level using the perfect order concept
re5uires performance on each element to be monitored - then thepercentage achievement on each element is multiplied together
e8g8 if the actual performance across all orders for
Error"free B =>
!ctual perfect order achievementF => G D=> G => F *+",-*+",-
FH the li$elihood that a perfect order %as achieved during the periodunder revie% %as onl =8J>
S lSe en le
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Seen uleSeen ule
States that the follo%ing seven factors must all be satisfiedto create the perfect order
, Right roductRight roduct
, Right .uantityRight .uantity
, Right laceRight lace
, Right ConditionRight Condition
! misstep in an of the above can result in customerdissatisfaction
Competitive advantage can be gained b creating anorgani(ation that routinel satisfies Rs
To provide higher levels of customer service)organi(ations see$ to fulfill Rs through the 6 phases of
customer service
, Right TimeRight Time
, Right CustomerRight Customer
, Right CostRight Cost
iC S i S
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Customer Serice StrategCustomer Serice Strateg
'aving a %ell thought out and planned customer
service strateg is critical to the development of astrong service culture
Organi(ations need to incorporate customer serviceinto their business goals) and into emploee goals to
help the organi(ation reach their corporate objectives
Steps to developing a customer service strateg
, Customer Service ;ision
, !ssessment of Customer :eeds
, 'iring the Right Emploees
, Customer Service 0oals
, Training
, !ccountabilit
, Re%ard - Recognition
C t S i St tCustomer Serice Strateg
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... Customer Serice Strateg... Customer Serice Strateg
, Customer Service /isionCustomer Service /ision
7 Communicating the customer service vision to emploees
7 Emploees need to understand %hat the vision and goal forcustomer service is and understand their responsibilit to helpachieve that vision
, Assessment o% Customer 0eedsAssessment o% Customer 0eeds
7 In order to meet the needs of their customers) organi(ations musthave a good understanding of customer needs and e&pectations
7 !n assessment is done b soliciting customer feedbac$ through
customer focus groups) satisfaction surves) or customer commentcards) and developing a comprehensive plan to meet and e&ceedthe customer needs
7 Organi(ations must $eep in mind that customer needs ande&pectations $eep changing " .hat a customer %ants toda %ill be
ver different from %hat the customer %ants a ear or ears later
C stomer Ser ice StrategCustomer Serice Strateg
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... Customer Serice Strateg... Customer Serice Strateg
, 1iring the Right 2mployees1iring the Right 2mployees7 Screening emploees and ensuring that the possess
the disposition and s$ill set to help support a strongcustomer service environment is important
7 S$ills can be taught but attitude and personalit cannot
, Customer Service 3oalsCustomer Service 3oals
7 !fter customer needs and e&pectations are identifiedand customer satisfaction is measured) ne&t step is tocreate goals for achieving customer satisfaction
7 Emploees need to understand %hat the target is so thecan help the organi(ation reach their corporateobjectives
Customer Serice StrategCustomer Serice Strateg
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... Customer Serice Strateg... Customer Serice Strateg
, TrainingTraining
7 Emploees must be trained regularl to ensure customer servicesare in $eeping %ith the organi(ations standards - re5uirements
7 #uch of the training should be practical teaching for ho% theorgani(ation %ould li$e the emploee to behave in ever situation)ho% to respond to customer complaints) ho% to be responsive to
customers) ho% to meet customer needs) being empo%ered toperform service recover) ho% to ans%er the phone and customerservice standards
, AccountabilityAccountability
7 Emploees need to be held accountable for achieving customer
satisfaction goals
7 This is part of a comprehensive performance management sstemand should be culturall e&pected
7 Emploees should have a good understanding of ho% their service
to the customer affects the organi(ation@s overall performance
Customer Serice StrategCustomer Serice Strateg
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... Customer Serice Strateg... Customer Serice Strateg
, Reward and RecognitionReward and Recognition
7 There should be a %ell thought out sstem forac$no%ledging and re%arding emploees for goodcustomer service
7 Emploees need positive reinforcement %hen the
demonstrate the desired behaviors of a strong customerservice culture
'aving a strong vision and strateg for customer service isa critical componentcritical componentto the success of an organi(ation
Organi(ations need to identif %ho their customers are)%hat the %ant and develop strategies to achieve thosecustomer re5uirements
! strong customer service strateg is %hat separates the
successful organi(ations from the rest
C t S i / ditC t S i / dit
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3!
Customer Serice /uditCustomer Serice /udit
!ssignment
" "
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e"erencese"erences
httpB//en8%i$ipedia8org/%i$i/SamK.alton
Seven R Rule httpB//boo$s8google8com/boo$sLidFDM#N%9Ks+c=C-pgFP!6D-lpgFP!6D-d5Fr
>Asofcustomerservice-sourceFbl-otsFpppc4NbP-sigFD!s6gTf(c5j$:R"b(5;$4ef$!-hlFen-eiFbQjKTbAN4sG#re*6*4c4%-saFG-oiFboo$Kresult-ctFresult-resnumFN-vedF=CEN!E%+vFonepage-5-fFfalse
Customer Service Strateg
httpB//thethrivingsmallbusiness8com/articles/"steps"to"creating"a"customer"service"strateg/
httpB//%%%8aberdeenshire8gov8u$/about/customerservice/CustomerServiceStrateg8pdf
Objectives of Customer Service - Perfect Order
Elements of *ogistics - Suppl Chain #anagement , ;ishal #ehta - #ihir #ehta
*ogistics - Suppl Chain #anagement , #artin Christopher
http://www.aberdeenshire.gov.uk/about/customerservice/CustomerServiceStrategy.pdfhttp://www.aberdeenshire.gov.uk/about/customerservice/CustomerServiceStrategy.pdf