This presentation discusses how the quality of logistics operations can leave a deep impact on customers and what impact it can leave on customer service. Also helps understand management about the tradeoff between service levels, related costs and their impact on the bottom line.

1. Logistics & Customer Service
Yonus Siddiqui
Vice President Projects,
e2e Supply Chain Management (Pvt.) Ltd.
FOUNDER SCAP
FOUNDER & CEO SCCDI

2. Tale of Two Customers
BUILD A SCENARIO FOR EACH

3. Choose your product

4. Why customer service?
 Commodity nature of products
 Cost sensitive customers
 Cost pressures
 The 3rd P of marketing
 Difference between you and your competitors is
based primarily on price OR customer service

5. Service Objective
 To create such a level of satisfaction with
customers that they do not feel it necessary to
consider alternative offers or suppliers.

6. What is Customer Service ?
 Three main components
 Pre-transaction elements
 Transaction elements
 Post Transaction elements
Core
Product
Delivery frequency,
reliability & consistency
Ease of contact
Features
Ease of transaction etc.
Quality
Durability etc. 6

7. Customer Service Drivers
• Order booking
• Handling
Process • Documentation
• Feedback
• Software
• Tracking
Tools • Technology
• Website
• Ownership
• Commitment
Culture • Teamwork
• Care & focus

8. Customer Service Economics
 Define customer service objectives
 Write a customer service policy
 Remember !
 Pareto’s law
 Law of diminishing returns.
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9. Customer Cost of Service
Service
Economics
0 Service Level 100%
Diminishing Returns
Graphically
Service
Sales Revenue Overkill
Service Zone
Threshold Level
0 Service Level 100%
Revenue
Cost
Profit
9
0 Service Level 100%

10. Setting Service Standards
 Set your priorities right 5% {
 Apply Pareto (80/20) rule to both products 15%
and customers
% Sales / Profits
 View service decision as a resource
allocation issue 80%
 Profits vary by customer & by product
 Measure of importance should be PROFIT A B C
rather than sales or volume
20% 50% 30%
 Contribution margins of each product 0 % Products / Customers 100%
SKU to be reviewed separately
20% Customers buying 20% products
 Develop service policy / standards
equals 4% of all transactions
 Key accounts
Which will provide:
 Inventory levels
 Stock point positioning 80% of 80% of total profit = 64% profit
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11. Service Standard Examples
Requires a clear and objective understanding of customer’s
requirements and willingness to shape those expectations.
 Order cycle time  Delivery reliability
 Stock availability  Documentation quality
 Order size constraints  Claims procedure
 Ordering convenience  Order completeness
 Delivery frequency  Technical support
 Order status information
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12. Bottom Line Impact for customers
 Lower inventory  lower working capital
 No headaches  life is enjoyable
 Timely supplies  more sales / availability
 Improved profitability  preferred supplier

13. A Positive Feedback on Logistics
 The service during my pick up was great. They were
very thorough and careful with all of our things.
 While my things were in transit, your service was also
good. I received calls and emails with updates.
 Also, whenever I had questions, they answered
them all to my satisfaction.
 Your service during delivery was also very great.
The guys were very nice and efficient.
 I can say that you certainly delivered my things on
time.
I will definitely recommend your moving services to
others, thank you!

14. Question / Answers