Improving Customer Service Performance


Improving Customer Service Performance:


The levels of customer service a firm achieves often can be improved through one or more following actions: (i) Thoroughly researching customer needs, (ii) setting service levels that make realistic trade-off between revenues and expenses, (iii) making use of latest technology in order of processing systems, (iv) measuring and evaluating the performance of individual logistics activities.


An understanding of how customers define service forms the basis for an effective customer service strategy. Audit of both internal and external customers can be utilized to obtain customer input into service strategies, plans and programs. A firm can identify distinct logistics need of its customer through customer audit.


After the firm has determined their customer’s view of service, the management of the firm must select a customer service strategy which advances the firm’s objectives for long term projects, return on investment or other relevant measures of performance. The optimum level of customer service is the one that obtains and retains the mist profitable customers.


Order processing can have major impact on customer service levels and perceptions. Many firms have automated Order processing systems which have the primary benefit of reduced order cycle time to customers since most customers prefer consistent delivery cycle to a shorter one. But b using the additional time internally for planning, the firm can achieve saving in transportation, warehousing, inventory carrying costs, production planning and purchasing.


Automation improves customer service by providing the following benefits to the customer:


(i)          Better product availability

(ii)       More accurate invoices

(iii)     The ability to reduce stock levels and their associated inventory carrying costs

(iv)     Improved access for information on order status.

Automated order processing systems enhance the firm’s ability to perform all the transaction and post-transaction elements of customer’s service.


Finally, the development of an effective customer service program requires the establishment of customer service standards which perform the following functions:


(i)          Reflect the customer’s view point.

(ii)       Provide an operational and objective measure of service performance.

(iii)     Provide management with cues for corrective action and improvement of customer service.


Management also should measure and evaluate the impact of individual logistics activities such as transportation, warehousing, inventory management, production planning, purchasing and order processing on customer service. Achievements should be reported regularly to the appropriate levels of managers by the employees designated for that purpose. Management should compare actual performance to standards and take corrective action when performance is inadequate. Timely information is needed for a firm to be efficient and successful. But it is necessary to hold individuals accountable for performance because information alone does not guarantee improved decision making.


The success of a firm is no longer based exclusively on selling products. Instead it is the value added service than can create a differential and sustainable competitive advantage. Logistics can provide such service-based advantage.

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