The Importance of Logistics in Providing
Logistics involves controlling and managing the movement of goods and services, information and products from the point where they are produced up to the market place. In other words, it deals with the information and physical flows of the raw materials to the final distribution of finished products. Logistics also involves the management of information and storage of materials, parts of the finished goods in the chains of supply, through procurement stages, work-in-progress to the final distribution.
According to cooper (1994), the goal of logistics is to maximize future and current profitability in order to acquire customer satisfaction and also satisfying their orders through the cost effective analysis (Rushton, Oxley & Croucher, 2000).
Customer service and Logistics
Majority of today’s companies consider customer service as a very crucial phenomenon in their businesses. In the past customer service was mainly based on the needs of the customer without taking in consideration what real requirements or even the perceptions of these customers. It is therefore necessary to comprehend the customer requirements and service will always differ not only between industries and companies but also between the market segments that a business might seem to have (Rushton, Oxley & Croucher, 2000).
Complexity of the provision of customer service is also another important requirement that needs to be noted and understood clearly. This is because customer service links the processes of logistics and distribution and many influences relevant to customer service may evolve within these processes; such as the range from ease of ordering stock that is available to the reliability of delivery.
It is also important to balance the cost of provision with the level of service provided. High costs of providing customer service that is even greater than what a customer actually requires has resulted in the downfall of many service offerings in companies. Therefore, the key to attaining quality and successful customer service policy is through the development of appropriate policies and objectives which involves liaison with these customers. It is also important to monitor, control and measure all the set up procedures (Rushton, Oxley & Croucher, 2000).
The components of the logistics customer service may be identified as a transaction –related elements with emphasis being placed on specific service that is provided for instance on time delivery. It may also be viewed as functional attributes related to the entire aspects consisting of the order fulfillment such as taking of orders. In order to reflect the timing and nature of particular service requirements transaction elements are usually put into three categories: Pre-transaction elements, transaction elements and post-transaction elements.
Pre-transaction elements consist of customer service factors brought about as a result of the actual transaction that takes place. They involve: accessibility of order personnel, method of ordering, system flexibility, written customer service policy single order contact point, transaction elements organizational structure and order size constraints.
Transaction elements on the other hand are the elements that are related to those other elements mostly concerned with logistics and distribution. These elements include: delivery of complete order, delivery time, order preparation, delivery reliability, order cycle time, availability of inventory, condition of goods, order status information and delivery alternatives.
The post-transaction elements consist of those elements that arise after the process of delivery has been fulfilled. These elements include: call-out time, returns policy, availability of spares, product tracing, involving procedures, customer complaints and procedures, claims procedures and involving accuracy.
Another classification of customer service elements is that one of multifunctional dimensions. This classification has the objective of assessing the various components of customer service available across a range of the whole functions of the company so as to strive to gain a seamless service provision. For instance, time is made up of a single requirement which covers the whole range of p from the placement of order to the delivery of the order – the order cycle.
This approach has the impact of enabling the delivery of some very relevant measures of logistics. The multifunctional dimensions include: dependability which means the guaranteed accurate and fixed delivery time, flexibility which is the logistics customer services ability to identify and respond to the changing needs of customers’ time that is usually order cycle time and communication which helps in the easy of order taking processes (Rushton, Oxley & Croucher, 2000).
There elements of customer service differ and their significance will also vary according to the company, concerned market and the product. Therefore, it is important that a customer service policy exists which will help in the undertaking of the various segments of the market that exists.
The customer service policy also involve the awareness of the needs of customers or those of the segmentation; identification of clearly defined quantifiable standards available for customer service, understanding any trade – off that may exist between the levels of customer service and that of the costs, measuring the service that is provided and lastly liaison with customers so as to enhance an appreciated and understanding of the provided service (Rushton, Oxley & Croucher, 2000).
How logistics customer service affect a company’s sales and customer loyalty
Customer service involves ways in which an organization deals with its customers and it is mostly seen in sales and after-sale service. Customer service in logistics should also include all the processes that are involved in the value chain. To acquire customer focus, there is need to obtain a good customer service. Poor customer relations on the other hand are as a result of the availability of poor customer service (Peck & Christopher, 2003).
Increasing levels of competitive pressure and difficulty with the aim of maintaining and increasing profitability is what most of today’s companies face. The management of these companies are being faced with the challenges of innovating and seeking strategies that could help in the advancement of the competitive advantage and profitability of their awareness of the significance of logistics in their organizations hence the need for a specialist.
Logistics customer service plays a very crucial role in the overall outcome of a company’s sales and customer loyalty. The outcome could be negative or positive depending on the quality of the customer service that is being provided by an organization. Poor customer service in logistics could result in poor customer loyal. The poor services include high costs, poor delivery time, and poor goods that the company could be offering, lack of enough inventory among other things. This not only affects customer relations and loyalty but also the sales of the company (Peck & Christopher, 2003).
The earlier on discussed elements of logistics customer service play a very crucial role to the buyers of the products in the company. Lack of adherence to these elements by an organization often leads to the fall in the overall company’s sales and customer loyalty. Profitability of the firm depends on how a company handles carriers out these elements.
An organization is bound to gain loyalty from its customers when it strives to strengthen the relationship between them as this will enhance the company’s sales hence profitability is increased. This relationship involves good communication and honesty from the logistics customer care service loyalty can only be enhanced through good customer service provision. Customer loyalty is bound to deteriorate if they are offered with poor services or the company’s sales are such that they are too high as compared to their expectations of the goods and services that a company provides (Peck & Christopher, 2003).
Customer service plays a vital role in logistics hence its major concern. The level and quality of logistic customer service provided will directly impact on the company’s cost and implication, its profitability and the market share. Poor logistic customer service will result in the company’s lose of customer hence losing their loyalty as well. The end result therefore means that the company will have to incur high costs in trying to shape its image and also in the recruitment of other personnel.
The company has also got to strive in order to increase its market share. On the other hand effective logistic customer care will result in the improved market share, profitability and low cost incurred by an organization (Peck & Christopher, 2003).
Customer service in logistics and be viewed as an activity which means what a company actually provides for its customer service department that mostly handles special orders, billing, complaints among other things. Similarly the provision of customer service can also be viewed as a measure of a company’s performance. For instance if a company can deliver completed orders at least 24 hours of the receipt and 95% on time, this means that this company provides good customer service.
It is therefore, important that the logistics customer service provides quality service in the manner in which they handle customer’s complaints, handling their orders and the speed of delivery. This will have a positive impact on the company’s sale and customer loyalty (Gourdin, 2006).
In addition, if the logistics customer service system is managed in a way that it can provide the customers the level and standard of services that they require, this will result into customer satisfaction hence accompany is able to reap maximum benefits and at the same time retain the loyalty of its customers.
Another factor that determines how logistic customer service impacts on company’s sales and customer loyalty is honesty. Honesty means that an organization should be able to fulfill its promises to its customers. If a company pledges more than what it can guarantee, it means that the customers will get dissatisfied. This as a result, will lead to the fall of the number of customers that a company has hence, losing the customer’s loyalty and this eventually leads to a fall in the company’s sales. It is therefore important that manager do not overstate the services they intend to offer their customers (Gourdin, 2006)
To conclude, in today’s market, competition is stiff and customers are more demanding with regards to goods and services that are offered by companies. The expectations concerning service provisions and this therefore calls for the understanding of what is valued by the customers and also a company needs to focus on the processes so that this value is delivery consistently.
Gourdin, K., (2006) Glogal Logistics Management: A Competitive Advantage for the 21st Century. Blackwell Publishing, ISBN 1405127139.
Peak, H. & Christopher, M. (2003) Marketing Logistics. Elsevier. ISBN 0750652241.
Rushton, A., Oxley, J., & Croucher, P., (2000). The Handbook of Logistics and Distribution Manage. Kogan Page. ISBN 0749433655.