LOGISTICS - CUSTOMER SERVICE PART 2 . The aim of this lecture is to clarify customer service audit and the importance of standards in the field of customer service Šárka Čemerková Lecturer Logistics - Customer service Part 2 . Customer service audit Determination and evaluation of the level of customer service LIS EDI Structure of the lecture CUSTOMER SERVICE AUDIT •Audit = Formal and systematic review by qualified professionals to: odetermine the extent to which specific organizations meet management goals ofind out which conditions need to be improved o •means of rating the current level of CS provided by the company •provides some benchmark for evaluation of the impact of changes in CS strategy •goal: oto identify critical components of CS oto identify how the performance of these components is controlled oto evaluate the quality and capabilities of internal IS Customer service audit phase: 1.External audit 2.Internal audit 3.Identification of opportunities and methods of improvement 4.Introduction of standards in the field of CS 1. External audit •main goal: oto identify those service components that customers consider important in their purchasing decisions oto find out how customers perceive the service (quality, level of service) offered by the company and offered by the company's main competitors •interview with several selected customers of the company •questionnaire •to engage the marketing department •possible problems: oCS is on the same level as the competition have Þ the customer is difficult to distinguish between suppliers oindicator important for the customer none of the suppliers provide Þ market opportunity ocustomers cannot appreciate the service provided operformance is better than perceived •internal audit can also be performed during an external audit 2. Internal audit •goal: oto identify differences between established business practices and customer requirements oevaluate business-to-customer communications and intra-company communications, including assessing and reporting customer service performance •interviews with managers: oDefining the scope of responsibilities oSize and organizational structure oDecision-making powers and decision-making processes oMeasurement and evaluation of performance and results oCS definition oOpinion on how customers define CS oCompany plans to change or improve CS oInternal communication between departments oCommunication with key customers 3. Identification of opportunities and methods to improve the level of customer service • •utilization of information obtained from external and internal audit •comparison with the competition •what and how to improve • 4. Implementation of standards in the field of CS •goal: ocreation and implementation of specific standards (levels) of customer service and system of their measurement •different target service levels for different segments •motivation of employees to meet the company's goals in the field of CS • The whole process of customer service audit must be repeated regularly by management !!! Obstacles to customer service strategy •inability to distinguish specific market segments •different levels of CS vs. different price •unrealistic expectations •seeking general and common market requirements •disregard of geographical differences Determination and evaluation of CS level •setting standards, performance norms of CS components •performance in the field of CS can be measured and controlled as follows: oto introduce quantitative performance standards for each service component oto measure the actual performance of each component oto analyze the differences between actual performance and standards otake corrective step to improve actual performance •motivation customers to cooperate Measurement of CS performance •pre-sales components onotification of product unavailability oquality of sales representatives oregular visits by sales representatives omonitoring the customer‘s storage level oconsultations for new product / package development ocommunication of the planned delivery date •sales components opercentage of pending orders opercentage of availability / reliability of order fulfillment oincomplete deliveries / losses on deliveries osimplicity of ordering oorder confirmation ooffer credit terms ohandling queries ofrequency of supply oorder cycle time oorder cycle time reliability otimeliness of deliveries oexpedition delay (fluctuations in the cycle) ocomplete order fulfillment oorder status information oability to track orders •after-sales components oinvoice accuracy oreturn / leveling oproduct damage (hidden and visible) owell stacked pallets oeasy-to-read information on the expiry date on the packaging (use by date, ...) oquality of the packaging of goods intended for display in the shop Standards in customer service •must reflect real customer requirements (not what management thinks) •appointed workers regularly measure actual performance in specified indicators and compare it to standards •importance of the order processing system •importance of IS Examples of standards in the field of CS •percentage of availability of the goods in stock: oby product or product group oby storage location oby customer or customer category oby period oby completeness of orders •transportation time: oby mode of transport oby storage location oby customer or customer category oby period oby order size •even distribution of supplies: oby timely delivery oby storage location oby customer or customer category oby date range oby order size Improving the quality and performance of CS •level and quality of CS can be increased by: ocarefully examining the needs of customers osetting service levels that respect the interrelationship between revenue and costs ousing the latest technology in the order processing system omeasuring and evaluating the performance of individual logistics activities •utilization of CS audit •influence of the ordering system Logistics information system (LIS) •IS focused on logistics data •support for logistics management •order-handling system is the nerve center •goal: ocreate an information environment in which it is possible to effectively plan and coordinate all logistics activities related to material flow management in the logistics chain Orders processing Orders issuing to suppliers of resources Production plan Supply plan for production Orders transfer Receipt of stocks, accounting documents Warehouse of finished products Production Transfer orders to suppliers of resources Dispatching, invoicing Supplier Customer Material and information flow of customer order LIS requirements •simplification of administrative tasks with documents •data for operational management •data for economic decision-making •openness to other systems and its interconnection in SCM etc. LIS is decomposed into: • order processing subsystem • demand forecasting subsystem • logistics planning subsystem • stock management subsystem EDI (Electronic Data Interchange) •modern way of communication between two independent subjects, where standardized structured business and other documents are exchanged electronically (without human intervention) •for the first time in the 1960s. in the automotive industry •in the Czech Republic in the greater after 1998 •clear legal framework until 2004 •initially negative attitude towards EDI: othe enforcement methods of the chains themselves and the sanctions against their suppliers ocosts odemanding implementation into enterprise IS odemanding maintenance and expansion ominimum price competition in EDI solutions •negative experience Þ EDI will bring something only to big suppliers and chains •today, virtually everyone can benefit from EDI: oaffordability oeasy integration into business IS otraditional and proven technology ocommon part of business relationships applicable to any industry or industry oEDI is also used by the state administration Advantages of using EDI: •speed •reliability •lower costs • The most widespread types of EDI business reports: • •Order •Invoice •Advice of dispatch of goods •Business objection •Stock overview •Product catalog and prices Summary of lecture You can: •Explain the essence of a customer service audit •Describe ways to evaluate customer service performance •Give examples of customer service standards •Define LIS •Characterize EDI