SERVICE QUALITY IN TRANSPORTATION AND LOGISTICS: MEASUREMENT, EVALUATION, AND IMPROVEMENT Forrest E. Harding California State University Long Beach

THIS IS A SYSTEM FOR: F SERVICE EVALUATION AND QUALITY TRACKING F INTERPRETATION OF SURVEY RESULTS F SETTING SERVICE IMPROVEMENT PRIORITIES

DESIGNED TO BE ADMINISTERED BY LOGISTICS PERSONNEL ANYWHERE IN THE WORLD WITHOUT THE ASSISTANCE OF OUTSIDE EXPERTS OR CONSULTANTS

TWO THINGS THERE ARE TWO THINGS WE NEED TO KNOW ABOUT EACH CATEGORY OF SERVICE WE OFFER: F HOW GOOD IS OUR SERVICE (Performance Rating) F WHAT IS IMPORTANT TO OUR CUSTOMERS (Importance Rating)

PERFORMANCE RATING PERFORMANCE RATING USE SURVEY RESULTS TO: F DETERMINE WHAT WE ARE DOING WELL F DETERMINE WHAT NEEDS TO BE IMPROVED

IMPORTANCE RATING IMPORTANCE RATING F DETERMINE WHAT CATEGORIES OF SERVICE MOST CONTRIBUTE TO CUSTOMER SATISTACTION F REGRESSION ANALYSIS F ADDING IMPORTANCE ITEM

DEVELOPING THE EVALUATION INSTRUMENT DEVELOPING THE EVALUATION INSTRUMENT : F VISUALIZE SERVICE FLOW F IDENTIFY QUALITY INDICATORS F IDENTIFY FUNCTIONS THAT DEFINE SERVICE F WRITE “ALL THINGS CONSIDERED” QUESTIONS F ADD CLASSIFICATION CHARACTERISTICS

VISUALIZE SERVICE FLOW VISUALIZE SERVICE FLOW : F WHERE DOES SERVICE BEGIN? F WHERE DOES IT END? F WHAT SHOULD HAPPEN BETWEEN?

IDENTIFY SERVICE QUALITY INDICATORS IDENTIFY SERVICE QUALITY INDICATORS: F FOCUS GROUP RESEARCH F SURVEY RESEARCH AND FACTOR ANALYSIS F INTERVIEWS F LITERATURE REVIEW F PROFESSIONAL MEETINGS

SERVICE QUALITY INDICATORS: INTEGRATED CARGO CARRIER SERVICE QUALITY INDICATORS: INTEGRATED CARGO CARRIER F CUSTOMER SERVICE F TRANSIT/DELIVERY TIME ESTIMATES F SHIPMENT PICKUPS F RECOVERY FROM DELIVERY PROBLEMS F TRACKING F PODs F BILLING

SERVICE QUALITY INDICATORS PASSENGER CARRIER SERVICE QUALITY INDICATORS: PASSENGER CARRIER F RESERVATIONS F CHECK-IN F BOARDING F CABIN APPEARANCE F COMFORT F CABIN PERSONNEL F MEAL AND BEVERAGE SERVICE F ENTERTAINMENT F BAGGAGE RETRIEVAL

SERVICE QUALITY INDICATORS SUPPLIER SERVICE QUALITY INDICATORS: SUPPLIER F PERSONNEL F QUOTATIONS F ORDER INTEGRITY F DELIVERY F POST ORDER SERVICES F INVOICING F DISPUTES AND RETURNS F CREDIT SERVICES

PUBLIC SCHOOLS (K-8) PUBLIC SCHOOLS (K-8) F TEACHERS F PRINCIPAL F PHYSICAL PLANT F SUBSTANCE ABUSE F LOCATION F EXTRACURRICULAR ACTIVITIES F DISCIPLINE F TEST SCORES F STUDENT CONDUCT F RECEPTION BY EMPLOYEES F COMMUNICATION WITH PARENTS F OVERCROWDEDNESS F PARENTAL SUPPORT F SCHOOL CLIMATE F TRAFFIC/NOISE

FUNCTIONS THAT DEFINE SERVICE: SUPPLIER PERSONNEL F ABILITY TO REACH OUTSIDE REPS F ABLITY TO REACH CUSTOMER SERVICE F PROPMPT RETURN OF CALLS F FREQUENCY OF REP VISITS F HOW KNOWLEDGABLE? F ATTITUDE OF REPS F ATTITUDE OF CUSTOMER SERVICE PEOPLE

WRITING QUESTIONS F THREE OR FIVE POINT POINT SCALE SUPERIOR TO SAME AS WORSE THAN COMPETITION COMPETITION COMPETITION GOOD AVERAGE POOR (3) (2) (3) F OBJECTIVE DESCRIPTORS F COMPARE TO COMPETITION

“ALL THINGS CONSIDERED” QUESTIONS: F FOR EACH QUALITY INDICATOR F All things considered, I would rate my satisfaction with the performance of...

“ALL THINGS CONSIDERED” QUESTIONS: F AT THE END OF THE QUESTIONNAIRE... “THE BOTTOM LINE”QUESTION: F Considering all the services I have received, I would rate my overall satisfaction with ____Company to be:

IMPORTANCE RATINGS: IMPORTANCE RATINGS: REGRESSION ANALYSIS F INDEPENDENT VARIABLES ARE SERVICE FEATURES F DEPENDENT VARIABLE IS “ALL THINGS CONSIDERED” (BOTTOM LINE) QUESTION F HIGH REGRESSION COEFFICIEMNTS DETERMINE OVERALL IMPORTANCE OF SERVICE FEATURES

IMPORTANCE RATINGS: IMPORTANCE RATINGS: ADDING IMPORTANCE ITEM F SMALLER POPULATIONS F NO STATISTICAL SOPHISTICATION REQURED F NO OUTSIDE CONSULTANTS OR ANALYSTS REQUIRED F IMPORTANCE MEASURE ADDED TO PERFORMANCE QUESTION: 3 = CRUCIAL 2 = VERY IMPORTANT 1 = MODERATELY IMPORTANT

CLASSIFICATION QUESTIONS: Who thinks what? F What is your annual logistics budget? F How many international dutiable shipments do you make each month? F What does your company ship?

EVALUATIONING SURVEY RESULTS Use survey results to determine: F What we are doing well F What needs to be improved F What is important to our customers

Performance- Importance Action Matrix F How Good is Performance F What is Important to Customers F What to Promote F What to “fix now” F Where to cut budgets

SERVICE QUALITY EVALUATION ACTION PLANNING TOOL H I G H O E R A T E L O W M (1) (2) (3) (1-1)(1-2)(1-3) (2-1)(2-2)(2-3) (3-1)(3-2)(3-3) IMPORTANCE TO CUSTOMERS D USE PROMOTIONALLY SAME AS (3) (2) (1) 0 CUT ENCOURAGE THESE SERVICES UPGRADE SERVICES IMPROVE THESE NOW! FIX RESOURCES EXPENDITURES THESE QUESTION BUDGET REALLOCATE THESE STAFF CONGRATULATE STAFF COMPETITION ABOVE COMPETITION BELOW COMPETITION SERVICE PERFORMANCE RATINGS

Cost-Time Analysis F Set Priorities for “Fix Now” Services F Create a “Low Cost” Strategy” F Create a “Quick Fix” Strategy F Identify What Should be Done First F Establish Longer Range Priorities

H I G H M E D I U M L O W (1-1)(1-2)(1-3) (2-1)(2-2)(2-3) (3-1)(3-2)(3-3) RUN (1) RUN (2) RUN (3) INTERMEDIATELONG TIME RELATIVELY SLOW AND EXPENSIVE RELATIVELY SLOW RELATIVELY EXPENSIVE STRATEGIC CONSIDERATION LONG RANGE PLAN LOW COST APPROACH Q U I C K F I X COST SHORT

LOW COST APPROACH SERVICE IMPROVEMENT PRIORITIES: LOW COST APPROACH F 1-1SERVICES F 1-2 SERVICES F 1-3 SERVICES LOW COST SHORT RUN LOW COST INTERMEDIATE RUN LOW COST LONG RUN

QUICK FIX APPROACH SERVICE IMPROVEMENT PRIORITIES: QUICK FIX APPROACH F 1-1SERVICES F 2-1 SERVICES F 2-3 SERVICES SHORT RUN LOW COST SHORT RUN MEDIUM COST SHORT RUN HIGH COST

OTHER SERVICE IMPROVEMENT PRIORITIES: F 2-2SERVICES F 2-3 SERVICES F 3-2 SERVICES F 3-3 SERVICES INTERMEDIATE RUN MEDIUM COST LONG RUN MEDIUM COST INTERMEDIATE RUN HIGH COST LONG RUN

CONCLUSIONS F This is a service evaluation technique designed to be administered without consultants or outside experts F It is based on customer research F The technique will tell us what to promote and what to improve F Top priority for service improvement are services most important to customers that are the least expensive and time consuming to fix.

SERVICE QUALITY Produces REPEAT BUSINESS

ProducesPROFITABILITY

FOR COPIES OF THIS PRESENTATION : FOR ADDITONAL INFORMATION SEE : SEE : Harding, Forrest, E. “Logistics Service Provider Quality: Private Measurement, Evaluation, and Improvement”, Journal of Business Logistics 15, No. 1(1998):