Professional Documents
Culture Documents
SCM-Lect 2 Supply Chain Drivers
SCM-Lect 2 Supply Chain Drivers
SCM-Lect 2 Supply Chain Drivers
Logistics/Supply
Chain Product
“Logistics/Supply Chain managers are
‘owners’ of the product-flow process from raw
material sources to final consumers, not
activity administrators.”
Social Value Stimulant
Strategic, Tactical, and Operational Decision Making
Decision area Strategic Tactical Operational
Functional Innovative
Products-- Products--
Predictable Unpredictable
Low margin
demand demand
Efficient Staple food
supply chain products
Responsive Electronic
supply chain equipment
High margin
Classification of Products
Predictable/Mature Unpredictable/Introductory
Products Products
Supply Chain
Strategy
Efficiency Responsiveness
Supply chain structure
Logistical Drivers
70
60
50
40
30
A items B items C items
20
10
0
0 20 40 60 80 100
Total items (%)
Customer Service Elements
Customer
service
12% Damaged
goods
7%
Other
6%
Frequently cut
items
44%
Late delivery
Penalties for Customer Service
Failures 29%
Reduced the
2%
volume of
Refused to
business
support
promotion
16%
Discontinued
items
18%
Stopped all
purchases
with supplier
9% 26%
Refused to Called in
purchase new salesman or
items manager
CR (2004) Prentice Hall, Inc.
Most Important Customer
Service Elements
•On-time delivery
•Order fill rate
•Product condition
•Accurate documentation
Customer Service Strategies
• Traditional customer service focused on
internal service levels and goals:
– Percent defective products
– Percent on-time delivery
– Fill rate
• Without feedback, we can only provide
customer service ….. A One Way customer
service that leads to …
– Service Gaps
Customer Satisfaction Strategies
Customer satisfaction strategies require direct
input from a customer. Questions to be
addressed should include:
– How do important customers define quality, on-time
delivery, responsiveness and other key value areas?
– Are our internal measures consistent with customers’
measures?
– Does our current performance meet our customers’
requirements?
– Would an improvement in our performance be valued
by our customers?
Barriers to Customer Fulfillment
• Customers identify the following as the cause of
dissatisfaction in almost 80% of “horror stories”:
– Training - employees do not know how their behavior and
performance affects customer perceptions.
– Measurement - measures do not reinforce appropriate
attitudes and behavior toward customers.
– Empowerment - employees do not have authority to
solve problems and respond to customer needs.
– Policies - policies and procedures are inflexible and often
run counter to real service and satisfaction.
Process
• Regularly and routinely receiving
information on customer end about
demand
• Vital information only
• On-hand inventory balances
• Order schedules and statuses
• Point of sales data sharing is key
• Forecasts to be shared
• All kinds of system updates or changes anywhere to be shared
everywhere.
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