Supply chain has become the catch all title for all activities from
sourcing, purchasing, delivery, logistics, and manufacturing. Delivery
to the customer is an afterthought today when speaking of supply chain.
Yet it is the delivery of the material that is the last contact with
the customer, so is the impression the customer is left with.
The major component to the supply chain today is sourcing raw
material and components to make the product that the company sells.
Companies are doing everything they can to cut costs in this area, from
reductions in price costs of materials to finding a cheaper
manufacturing location to saving on the transportation throughout the
manufacturing process. All of the movement adds to the cost of the
process, so having an efficient process of moving goods around the
world to take advantage of lower cost manufacturing and labor. The
cost of these movements is easily to allocate to various accounts
within the organization. But can’t be allocated is cost of delays and
exceptions along the supply chain. In the series of documents I will
post, I will discuss the affect on the customer and the costs to the
supplier.
What is the impact that Logistics has Customer Service, Marketing
and Customer Satisfaction? Failure of the Logistics process has one of
the following affects on the consumer:
Don’t Purchase
Delay Purchase
Select a Competitor’s Product
Select a Different Product from the same Supplier
Buy from the same Product from a different Source.
The supplying company needs create a level of satisfaction in the
consumer so they do not seek or feel it necessary to consider
alternative suppliers. None of the scenarios above foster that level
of satisfaction to retain customers in the long run. The company must
identify key components of customer service then establish the
importance of each component to the customer. It is important to the
company that they differentiate itself from its competitors in order to
foster satisfaction in the consumer, and retain profitable customers.
Customers want goods on time, their orders in full and error free.
It is obvious that superior levels of customer service are not
without added cost. As the service level goes up, so does the cost of
that service. Superior logistics processes add to costs, but they also
add revenue and market appeal. If the revenue created is greater than
the cost of the service, then it is a win, win situation.
In the future I will cover solutions, core competencies of the
company, accounting for customer service, and my other ideas for
creating superior customer service.
I welcome your comments and questions
