How to Improve Customer service in Supply chain : 9 Useful Tips
Improving Customer service in supply chain is an essential element of today’s business. Customer service can be defined as support and service offered to customers during purchase and usage of products and services.
It can be a great opportunity to build excellent relationship with customers and deliver competitive advantage to grow business or lost opportunity to lose customer trust rapidly if not delivered well.
Many times business is not able to understand the aspect of improving customer service in supply chain. They believe once the product is dispatched from their premises as per the order, the job is done and does not require any further intervention.
But that is the point from where customer service starts. Did the goods reach to customer on timely basis and in the right quality condition, was documentation correct, were the right products delivered as per the order and were the quantity and product mix correct. Adherence to all these points will also enable supplier to get the payment on timely basis.
9 Useful Tips to improve customer service in supply chain are as follows:
1. Efficient order management process :
An efficient order management process is the base and if not executed perfectly, then no other tips are going to work.
It is first measure of service reliability in order to cash management process and essential to improve customer service in supply chain
Order management process needs to be well defined and entire process need to be made efficient from receiving the correct customer orders, order capturing, picklist generation and creating accurate invoices in warehouse.
Stock availability to be ensured, dispatches to be done and goods to be received timely at customer end. Establish a process that customer can track its order through end to end process from sharing the purchase order, sales order creation at supplier end, planned order and process order for manufacturing and dispatch execution to delivery.
Initiatives can be taken to reduce order cycle time, improve orders accuracy, timely delivery and efficient payment process. Reduce waste and improve efficiency by reducing level of changes and failures and better cash and credit management which will lead to improved customer perception.
2. ABC classification :
All customers are not equal and they also don’t require same type and level of service.
Classify the customers on ABC criteria basis the value and growth and decide the service levels. It is required to build strategic relationship with Class A Customers and deploy resources and levers to fuel their growth.
With Class B customers , find opportunities for improvement in service, quality and cost and with Class C customers improve delivery reliability. Work out a continuous improvement plan in joint collaboration with the customers.
3. Performance management system to improve customer service in supply chain :
A performance management system needs to be established and in place to measure, compare and take actions on various aspects to improve customer service in supply chain.
Various measures that needs to be tracked through this system are order changes at customer end and sales end, order capturing accuracy and execution, stock availability , quality defects, warehouse perfect execution and delivery management.
Customer claims, disputes and deductions should be regularly reviewed and managed proactively and timely
4. Listen to voice of customer :
Customer feedback is essential to understand their expectations and priorities. It provides unbiased view to drive internal improvements.
Regular surveys need to be conducted at defined frequency. It captures customer feedback on delivery, addressing the issues, response time, delivers accurate orders, orders on time, complete orders, customer return process, effective business planning, update about stock non availability and order changes, responsive customer service, queries and how complaints were addressed.
5. Joint business planning :
Joint business planning to be done with customers to arrive at consensus sales plan. An aligned plan will ensure adequate stock availability, product freshness, timely promotions and new product launches. There can be gap between service measurement between suppliers and customers as both may have different criteria.
For same supplies, Supplier may be measuring product case fill rates which will be 95% + and customer may be measuring order fill rates ( % of orders fully filled ) which can be at 50%+
Joint KPIs can be reviewed for example fill rates, delivery cost, dispatch schedule attainment, sales growth and availability, order fulfilment rate, invoice accuracy rate and cycle times.
Align service levels with customers which includes product service level, quality of product, drop size, delivery point and replenishment frequency.
6. Improve stock availability :
Stock non availability is one of the biggest reason for loss of sales and plays very important role to improve customer service in supply chain.
Stock availability and serviceability should be reviewed on daily basis with proper root cause analysis for lost orders and sales. Immediate corrective action should be taken to resolve availability issue.
Prioritization rules to be set for priority customers and allocation of critical out of stock items.
Common reasons can be production capacity constraints, higher sales, transit delays, New product delays , Quality issues, material availability.
Master data to be setup timely and accurately at both the ends. Any changes in master data like product details, pricing and bar codes to be communicated to customers well in advance so that there are no sale loss due to billing issues due. Correct master data setup will also enable smooth new product launches, innovations, and timely promotions.
7. Collaborate to reduce cost :
Explore and identify cost reduction opportunities in Order and load optimization, improving vehicle fill rates, optimal routes and vehicle size optimization.
Build logistics efficiencies by ensuring no trucks leave empty and focusing on direct deliveries will reduce distribution cost.
Evaluate the total transportation cost between need based market hired vehicles or fixed duration dedicated vehicles. Look for win win opportunities to save cost and improve customer service in supply chain.
Share your best supply chain practices and expertise with customers on service, inventory management, warehousing and quality for their upgradation. This level of expertise is not easily available and will be vouched for to create engaged customers.
Key projects that could be driven can be on warehouse redesign and efficiency improvement, Vendor managed or customer managed inventory and streamlining Distribution to Retail delivery.
9. Proactive checks to minimize returns and refusals :
Customer returns can be one of the big pain areas and lead to reduced satisfaction levels, higher costs and rework of activities. Maintain a checklist of required checks to be done before dispatch to ensure that orders are delivered as per customer requirement. It will enhance satisfaction levels and improve customer service in supply chain.
These 9 Tips will enable to build a customer focused and serviced oriented supply chain and improve customer service in supply chain. Customer service is going to play an important bridge between supplier and customer and if not handled well can lead to all efforts in value chain go in vain.
Businesses need to understand the importance of Customer service and should have a dedicated team to service and build strategic relationship with the customers.
Also read more on Customer service in supply chain