by Improving service level usually means an increase of costs. The service costs are caused e.g. complaints and correction of mistakes and work phase be done twice. Quality assurance contribute to reducing bad quality and mistakes, but in this case, service level production costs may increase considerably high.
Increasing the number of products stored in warehouse adds more rapid product availability to customer, but increases storage costs and the cost of tied up capital.
Therefore, it is important to find an optimum level, where service is good enough, but at the same time costs as low as possible.
Collection of customer feedback and its processing is necessary in order to identify satisfactory service level for customers.
Customer needs can be met, for example, by packing products for store handling and ensuring their handleability. Customer needs are often associated with delivery time or reliability of delivery and companies give related to them service promises. Well-managed complaint may increase company’s image and ultimately, turn to a clear competitive advantage.
Three principals of service
Service can be planned by three different principals or by a combination of them, depending on customer and product:
- Self-service principal: Customer orientation can be based on self-service principal, if customer doesn’t see service to create delivery process value. Typical to this service is customer’s own participation, use of up to date information networks, low unit cost of the process and ease of service
- Normal service: when share of service increases it is so called normal service, which means traditional customer service and requires service personnel presence. For example, visiting store’s fish desk or pharmacy.
- Tailor-made service: tailored services are characterized by customer fitting room, appointment and expensive process cost. As examples, investment advisory, legal clearance or negotiating mortgage.
The danger of part optimization
In logistics, there is a risk of part optimization. In this case, in one function service level is high, but measures implemented in other functions of the company tears it up. Such situations may arise e.g. between storage and transportation and buying and selling, for example, so that customer’s urgently needed spare parts kept in the stock, but they are transported to customer very rarely then the warehouse operates in vain or sales promises quick delivery but purchase keep deliveries from sub-suppliers with long delivery periods so that the product can not be delivered quickly.
Service may suffer too in connection with, for example, packing or delivery, and it is particularly harmful if carefully planned and implemented supply chain management fails in the final stage of logistics chain, for example, product is damaged during assembly in customer’s premises. In this case, resources being wasted and it will lead to financial losses and failure of customer promises.
Customer Satisfaction
Having good customer service in the transportation industry will ultimately improve your customer satisfaction levels. Customer satisfaction is important, even in the logistics industry in fact, especially in the logistics industry. Why the whole process might seem as simple as picking up a customer’s delivery and delivering it to its destination, customer satisfaction ultimately comes down to what your business can offer them outside of that simple process. Online services to track their shipments can work wonders, but human interaction is just as effective. Keep your customers up to date on their shipments if you can, or explain to them from the outset what will happen with their deliveries. Keeping a customer satisfied will keep them a customer.
Customer Relationships
Customer relationships play a part in customer satisfaction, but will also play a part in the success of your business. A good customer relationship will not only keep them coming back as ‘repeat customers’, but they are also more likely to suggest your business to other people and bring you in more clients over time. They chose your business initially, so make sure you give them enough reasons to come back and not look elsewhere to your competitors. Customer relationships can be a simple way of doing this with minimal, if any, costs so it’s well worth the bit of extra effort.
Brand Image
Good customer service in the transportation industry is going to make your brand look good. Poor customer service is what drives people to leave bad reviews. When someone complains about a company, it’s usually about the customer service they received as opposed to the product. If a product is faulty, customers can be appeased by good customer service whether that’s an apology or a replacement and this works in Logistics too. If your company is apologetic if something goes wrong, bad reviews and complaints are less likely. Showing you care through good customer service will do your business and your brand image a world of good.
