Service amp Relationships What is Customer Service No easy way to define May view Customer Service in 3 ways As an activity A task that is performed to satisfy customer needs Order processing billing amp invoicing product returns claims handling ID: 153817
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Slide1
Customer Service & RelationshipsSlide2
What is Customer Service?
No easy way to define
May view Customer Service in 3 ways
As an activity
A task that is performed to satisfy customer needs
Order processing, billing & invoicing, product returns, claims handling
As a performance measure
Success in achieving goals
% of orders delivered on time, time to complete orders
As a philosophy
Firm-wide commitment to customer satisfaction
A focus on qualitySlide3
Customer Service
The ability of logistics management to satisfy users in terms of
Time
Dependability
Communication
ConvenienceSlide4
Aspects of Customer Service
Time
Reduced order cycle time
Dependability
The reliability of the service encounter
Consistent order cycles
Safe delivery
Complete deliverySlide5
Aspects of Customer Service
Communication
Two-way exchange of information
Complete information exchange
Convenience
The ease of doing business with the other party
Must assess extent to which
the customer(s
) is (are) willing to pay for this easeSlide6
Customer Service Objectives
Should be
Specific
Measurable
Achievable
Cost-effective
MUST take the customer’s viewpoint into account
Benchmarking
Comparing performance to the competition’s performanceSlide7
Performance Measures
ALWAYS stated from the view point of the customer
2 key components
Measures used before shipping to customer
Measures used after shipping to customerSlide8
Pre-Shipment Performance Measures
Product Availability
% availability in base units (order, product, dollars)
Order Cycle Time
Time from order placement to order receipt
Speed and consistency
Distribution System Flexibility
Response time to special requestsSlide9
Pre-Shipment Performance Measures
Distribution System Information
Speed, accuracy, & message detail of response
Distribution System Malfunction
Response and recovery time requirements
Post-sale Product Support
Technical information, spare parts, equipment modification
Response time, quality of responseSlide10
Post-Shipment Measures
Orders received on time
Orders received complete
Orders received damage free
Orders filled accurately
Orders billed accuratelySlide11
Implementing Customer Service Standards
Set standards
Must be realistic but high enough for competitive advantage
Focus on quality
Communicate with customers
Set standards with customer input
Communicate standards with customers
Control procedures
For measuring, monitoring, and controlling
Amend or discontinue standards as appropriateSlide12
Types of Buyer/Seller Relationships
Arm’s Length Relationships
Type I Partnerships
Type II Partnerships
Type III Partnerships
Joint Ventures
Vertical IntegrationSlide13
Arm’s Length Relationships
Last for
single
transaction
No commitments made for future transactions
Price is the most typical deciding factor
Can minimize risk to both carrier & shipper
May not result in lowest price for shipper
Appropriate when carrier’s service offerings are considered commodities or standardSlide14
Type I Partnership
Short-term contractual relationship (
typical, 1 yr)
Requires little investment on part of either party
Limited scope of activities
Similar to arm’s length relationship except
Longer-termed
May include guarantees by both parties
I.e., shipper may guarantee minimum volume
I.e., carrier may guarantee delivery
times,
or minimum portion of fleet dedicated to shipperSlide15
Type II Partnership
Contractual relationship
Generally longer-termed than Type I’s (
typical,
2 – 5 years)
May require investment by either party
Scope of activities generally largerSlide16
Type III Partnership
Not normally governed by contract
No formal endpoint to relationship
Assets used in relationship may be jointly owned
Shared scope of activities is substantial
In essence, carrier performs all transportation services needed by shipper
Shipper is only client of carrier in most casesSlide17
Joint Venture
Similar to Type III
New firm is created with investments from both parties
Focus is for each party to benefit from the other party’s expertise
Example
Encompass JV
b/n
American Airlines and CSX
Railroad
created
to develop global booking & tracking system for freight movementsSlide18
Vertical Integration
Essentially, the use of private fleets
Firm requiring transportation services fulfills this need internallySlide19
Third-Parties
Company that supplies/coordinates logistics functions across multiple links in the logistics supply chain.
Essentially, a third-party acts as the link between the
Seller/shipper
Buyer/receiverSlide20
Benefits of Using Third-Parties
Lower costs
Improved Expertise/Market Knowledge & Access to Data
Improved Operational Efficiency
Improved Customer Service
Ability to Focus on Core Business
Greater FlexibilitySlide21
Third-Party Contracts:
Suggested Minimum Contents
Identify
the parties
Commit
shipper to tender shipments
Commit
carrier to transport shipments
Contain
contract rate or rates for the transportation services to be provided
Assign
vehicles for continuing time or provide that the service is designed to meet shipper’s distinct needs
Retain
by carrier while in effect and for minimum of 3 years thereafter Slide22
Common Sections Found in Third-Party Contracts
Disclosure of Goods
Describes nature of the product being shipped
Special handling or temperature requirements, nature of hazard (if any) and value
Responsibility for Goods
Routing, Mode, and Method of Operation
Term, Termination, &
ModificationSlide23
Common Sections Found in Third-Party Contracts
Volume Requirements
Scope of Operation
Performance
Standards
Transit time, pick-up/delivery, damage rates, billing accuracy
Operational Standards – Indemnification
Put at end of contract
Force Majeure
If one of the parties is in breach due to Acts of God, or force of nature, protects the party so affectedSlide24
Common Sections Found in Third-Party Contracts
Billing and Payment
ALWAYS include listing of prices and charges levied by the third party in the body of the contract
Refer to other documents or tariffs may be confusing, and in some cases, illegal
Applicable Law
Assignability
Used if third-party unable to meet its vehicle requirementsSlide25
Common Sections Found in Third-Party Contracts
Breach of Contract
Defines what constitutes breach, process to be used to rectify breach, and process for termination
Consider including “incentives to improve or comply” rather than just “punish”
Dispute Resolution
Arbitration
Confidentiality