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INTRODUCTION:Logistics is the management of the flow of resources between the point of origin and the point of destination in order

to meet some requirements, for example, of customers or corporations. The resources managed in logistics can include physical items, such as food, materials, equipment, liquids, and staff, as well as abstract items, such as time, information, particles, and energy. The logistics of physical items usually involves the integration of information flow, material handling, production, packaging, inventory, transportation, warehousing, and often security. The complexity of logistics can be modeled, analyzed, visualized, and optimized by dedicated simulation software. The minimization of the use of resources is common motives.

DEFINITION:Logistics is the art and science of management, engineering and technical activities concerned with requirements, design and supplying, maintaining resources to support objectives, plans and operation. --- Society of logistics engineers (sole) 1974.

ADVANTAGES OF LOGISTICS CUSTOMER SERVICE:Logistics customer service is mainly around the customers expect goods, the expected delivery time and the desired quality and carried out, in the business have a large role. With the development in particular, competition among enterprises has weakened below the limit, the center of its competition is the competition of logistics services.


Customer service is often an important element of the logistics business, which is directly related to the logistics of marketing. Logistics activities through time and space utility to meet customer demand, the output of the logistics business function, or the final product. Logistics and customer service, whether for production logistics, logistics or market-oriented, and its final product is to provide a service to meet the needs of logistics customers.


Customer service is a business to buy their products or services provided by a range of activities. From the modern point of view the concept of marketing products, meet consumer demand, customer service has three levels of meaning that is the core product, the form of augmented products. As a customer of his concern is to buy all the products, the products of the kind and valueadded products. The logistics customer service is important to provide these value-added activities; it has an important impact on customer satisfaction. Good customer service will increase the value of products, improve customer satisfaction. Therefore, many logistics companies logistics customer service as an important feature.

TO CREATE BEYOND THE SINGLE ENTERPRISE VALUE OF THE SUPPLY CHAIN:Logistics services as a unique way to merchandise for the media, the suppliers,

manufacturers, wholesalers and retailers of organic components from production to consumption, a whole process flow system, and promote the smooth flow of goods; the other hand and logistics services through its own unique system facilities (POS, EOS, VAN, etc.) continue to merchandise sales, inventory and other important information back to the distribution channels in all enterprises, and by continuously adjusting operational resources, so that the whole process of continuously coordinated response to the circulation changes in the market, thereby creating a flow of the pipeline beyond the individual enterprise supply chain value.


Customer is a source of profit. In the modern market economy, enterprise customers and their needs is the establishment and development. How to better meet customer needs is key to business success. In the past, many companies will focus on new customer development, while research on how to retain existing customers less. In fact the strategy to retain customers is more important. Because customers and the company has a very high profit margin between the correlation retain old customers to retain business, while amortization of the customer sales and advertising costs are low, especially satisfied customers will provide business intermediaries.

MOST IMPORTANT CUSTOMER SERVICE ELEMENTS: On-time delivery Order fill rate Product condition Accurate documentation.

SERVICE DRIVEN LOGISTICS SYSTEMS:An effective starting point for logistics system design is the marketplace, in other words, companies must fully understand the service needs of the various markets that they address and then seek to develop a low cost logistics solution. The ideal logistics strategies and systems should be devised in the following steps

IDENTIFYING CUSTOMERS SERVICE NEEDS:It is important that no two customers will ever be exactly the same in terms of their service requirements. However it will often be the case that customers will fall into groups or segments which are characterized by a broad similarity of service needs. These groupings might be thought of as service segments. The logistics planner therefore needs to know just what the service issues are that differentiate customers. Market research can be of great assistance. The approach to service segmentation suggested here follow a three step process:

Identifying the key components of customer service

Establishing the relative important of customer service components

Identifying customer service segments


The first step in search of this type is to identify the key sources of influence upon the purchase decision. Ideally once the decision making unit in a specific market has been identified; an initial, small scale research program should be initiated based upon personal interviews. The purpose of interviews is to elicit in the language of customers, which are the key components of service. Once these dimensions are defined, it can identify the relative importance of each one and the extent to which different types of customers are prepared to trade- off one aspect of service with another.


COMPONENTS: One of the simplest ways of discovering the importance a customer attaches to each element of customer service is to take the components generated by means of the process described in step 1 and to ask respondents to rank order them from the most important to the least important. For example, asking respondents to place a weight from 1 to 10 against each component according to how much importance they attached to each element.


Having determined the importance attached by different respondents to each of the service attributes previously identified, the final step is to see if any similarities of preference emerge. Cluster analysis, by trying to much respondents across as many dimensions as

possible, can identify the customer service segments.


The whole purpose of logistics strategy is to provide customers with the level and quality of service that they require and to do so at less cost to the total supply chain. The definition of appropriate service objectives is made easier if the concept of the perfect order is adopted. Perfect order is achieved only when each of those service needs meets the customers satisfaction. One frequently encountered measure of the perfect order is on- time, in- full, and error- free. In order to calculate the actual service level using the perfect order concept, performance on each element is to be monitored and then the percentage achievement on each element to be multiplied together. Customer service is usually measured in terms of: The level of availability, The speed and consistency of the customers order cycle, and The communication that takes place between seller and customer.

The customer service level should be established after carefully studying the customers needs to find the appropriate level. Availability can be seen as the number of available products in stock compared to the products out of stock within a specified order cycle. The order cycle is the time that passes between the customers order and the time customers receives the product. Communication refers to the firms ability to supply timely information to the customer regarding factors such as order status, order tracking, back-order status, order confirmation, product substitution, product shortages, and product information requests. After setting the customer service objectives, it is also essential to set the customer service priorities because the objective of any logistics system is to provide all customer with the level of service they require. The Pareto rue of 80:20 can be effectively used to provide the basis for setting customer priorities and to formulate effective customer service strategy. Pareto analysis is a statistical technique in decision making that is used for the selection of a limited number of tasks that produce significant overall effect. It uses the pareto principle (also known as the 80/20 rule); the idea that by doing 20% of the work one can generate 80% of benefit of doing the whole job. Or in terms of quality improvement, a large majority of problems

(80%) are produced by a few key causes (20%). Fundamentally, the service issue is that since not the all customers are equally profitable nor are the products equally profitable.


SETTING AND IMPLEMENTING CUSTOMER SERVICE STANDARDS:Setting and implementing the customer service standard is very important for the firm. A firm following steps to successfully set and implement the customer service standards.

Setting performance standard

Deciding management philosophies

Develop policies and standards

Evaluation and Review

STEP: 1 SETTING PERFORMANCE STANDARDS: The first step in implementing the customer service standard is to set/adopt easily achievable performance standards such standards may be too low to be of practical value. While setting and adhering to a meaningful standard should help to differentiate the firm the competition, setting standards at unrealistically low levels will not help to establish a competitive advantage. If service performance is to be controlled then it must be against predetermined standards. 100% achievements refer to the conformity to customer expectations. Some of the key areas where standards are essential to be set in logistics are follows: Order cycle time Stock availability Order size constraints and convenience Frequently of delivery and delivery reliability Claim procedures Technical support Order status information.

STEP: 2 DECIDING MANAGEMENT PHILOSOPHIES: After decide the management philosophies, some current management philosophies as an total quality or on creation of the perfect order are very critical of any acceptable quality level set below 100%. This does not mean that a firm can achieve 100% performance at all times, for the use f 100% represents an attitude more than a measurement. From a practical viewpoint, however, establishing a desired quality level that is less than 100% will generally limit, rather than encourage, superior performance. STEP: 3 DEVELOP POLICIES AND STANDARDS The firm should develop customer service policies and standards through customer consultation. After adopting these standards, the firm should formally communicate them to customers. Certain firms prefer to keep silent about their customer service standards and avoid letting their customers know their exact policies and performance targets. The best approach, however, is to communicate these policies and standards to customers very openly. STEP: 4 EVALUATION AND REVIEW: The firm should develop procedures to measure, monitor, and control the customer service quality called for by the firms performance measures and standards. Using techniques such as statistical process control (SPC), obtaining feedback, and taking corrective action are essential to success. When customer service standards are ineffective, the firm should not hesitate to amend or discontinue them as appropriate.


In the final step, ultimate designing the service driven logistics system takes place which is based on the identifying customers service needs, customer service objectives, priorities, and their service standards. Designing the service driven logistics system boosts the morale of intermediaries and the interest of the customers as well due to concentrating on the service levels and thereby adding value at each stage.


Defining wrong customer service Overlooking customer profitability Using unrealistic customer service policies Failing to research Blurring customer service costs Misusing customer service as a sales incentive Blurring lines of authority Equaling the number of warehouses with customer service Adding bodies rather than systems Employing under trained, under compensated personnel Misreading the sellers market


Excellent customer service performance seems to add value for all members of the supply chain. Thus, a customer service program must identify and prioritize important to accomplish operating objectives. A customer service program also needs to incorporate measures for evaluating performance. Performance needs to be measure in terms of goal attainment and relevancy. The critical question in planning a customer service strategy remains. Does the cost associated with achieving the specified service goals represent a sound investment and, if so, for what customers. Finally, it is possible to offer key customers something more than high- level basic service. Extra service beyond the basics is typically referred to as value added services, by definition, are unique to specific customers and represent extensions over and above a firms basic service program. Three fundamental dimensions of customer service were identified: availability, performance and reliability.


Availability Operational performance


Availability:Availability means having inventory to meet customer requirements of materials or products consistently without fail. It is the capacity of a firm to have inventory when it is desired by a customer. The usual practice to ensure availability is to stock inventory in anticipation of customer orders. Logistical system design provides for an appropriate number of warehouses, their location and the inventory policy. Generally, higher inventory availability requires grater investment in inventory. But technology provides new ways to achieve high inventory availability without associated high capital investments. For example , technique such as just-intime, quick response and vendor managed inventory system facilitate higher availability without greater investment in inventory. The inventory policy is based on forecasted demand and may incorporate differential stocking strategies for certain specific items based on brand image critically of the specific item to the overall product line, profitability etc. inventory comprises a base stock to meet the forecasted demand and a safety stock to meet the excess demand and also to safeguard against stock out occurring because delayed deliveries by the suppliers.

Operational performance:Operational performance is concerned with the elapsed time from order receipt to order delivery. It involves delivery speed and consistency. Other aspects of the logistics performance cycle are flexibility and malfunction/ recovery. To achieve smooth operations, firms seek first

to achieve consistency of service and then to improve delivery speed. A firms operational performance can be viewed in terms of how flexible it is in accommodating unusual and unexpected customer requests. Malfunction refers to the probability of logistical performance involving failures such as damaged products, errors in documentation, wrong assortments etc. when such malfunctions occur, a firms performance can be measured in terms of required time to recover (i.e... how quickly malfunctions can be rectified).

Service reliability:Service reliability is concerned with quality attributes of logistics. The key to quality is how accurately availability and operational performance can be measured. To determine whether overall logistical operations are achieving the desired service goals or not, comprehensive performance measurement is necessary. Logistics performance can continuously meet customer expectations if the management is committed to continuous improvement. Increasing customer expectations: understanding customer expectations in an important consideration in determining a firms basic service program. Many firms use logistics as a core strategy to gain customer loyalty. When firms commit resources to achieve high level of basic service competency, the resulting competition among them in their approach to logistical operations tends to increase overall customer expectations. The ultimate logistics quality that customers would expect is the perfect order. It is to do everything right and do it right the first time, the notion of perfect order is that desired customer service capability in terms of availability and operational performance should be synchronized to achieve target service goals each and every time. The total order cycle must be completed with zero defaults.

CONCLUSION:Thus, firms must be providing services to the customers within the time and those services are meet the customer requirements then firms goodwill is going to be increase and customer loyalty is also increase.