Chapter 2

Customer service The group of utilities or benefits the customer expects from the supplier

Elements of customer service 1. Order cycle time- the time taken between placing the order and receipt of delivery 2. Order cycle consistency- the extent to which order cycle time varies 3. Order accuracy- the degree to which items shipped meet order specifications 4. Order completeness- the extent the items ordered are totally filled when the order is assembled for shipment 5. Order condition- damage level at the time of receipt

Other elements Patronage Segmentation Customer perception Profit impact Competitive advantage Location Warehouse location

Expected customer complaints 1. Sale order service- late shipments, errors in invoicing, breakage errors, errors in sale coding 2. Traffic and transportation-damaged merchandise, failure of carrier to meet standard transit time, to follow customer routing 3. Ware housing and packaging-damaged merchandise delivered from field warehouse, incorrect order fulfillment 4. Inventory control- stock outs, delivery of poor merchandise, errors in product identification

Designing the customer service package 1. Identify customer service needs 2. Establishing relative importance of customer service components 3. Identify companies position and the key components of service 4. Segmenting the market by service requirements 5. Designing the customer service package 6. Establishing customer service management and control procedures

Order processing Various steps involved in execution of customer order 1. Order collection 2. Status reporting 3. Internal order communication 4. Credit checking 5. Order processing

1. Order collection Through sales persons from the field Through pre-set formats Through telephone Through fax and

2. Status reporting Consistent performance minimises complications

3. Internal order communication 1. Parallel order communication 2. Sequential order communication

4. Credit checking Prompt communication between credit in charge and local sales representative

5. Order processing Order management cycle involves various activities that include 1. Order preparation 2. Order transmittal 3. Entry 4. Filling

Functions of order processing Complete order forms and check customer orders for error Keep customers, purchase executives informed of the status Make the order available to sales, finance, accounting and purchasing for extracting necessary information Coordination with the credit department Communicate the orders to the appropriate shipping point Updating inventory control records and manufacturing schedules

Grouping them into four basic activities 1. Order acquisition 2. Order entry 3. Order document processing 4. Order status reporting

Factors affecting order processing time 1. Interaction with consumer 2. Processing priorities Relative order size Relative order volume Relative order placement time Order placement sequence Customer per sequence 3. Order filling accuracy 4. Order batching

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