Customer service defines as taking care of the customer’s requirement by providing or serving and delivering professional, efficiency and high quality service. The service will be provided during and after the customer’s needs are reached. In logistics industry, customer service is the activities, service actions that are provided and acting as added value. The purpose is to bring more value than the core service that customers need and bring the most satisfaction to customers. For businesses or business organizations today offer more services to customers besides their main products. It is also means the provision of service to customers before, during and after a purchase. It takes into account the priority an organization assigns to customer service relative to components such as product innovation and pricing. In this regards, an organization that treasures good customer service may utilize more money in training their staffs than the average organization or may eagerly follow up customers for their valuables feedback. In the organization, customer service, sales and marketing effort lead crucial role to generate revenue and reputation. To gain the customer loyalty, your service should be better than your competitor from the same industry. One good customer service experience can turn the entire perception a customer holds towards the organization. (https://lecvietnam.com)
Customer service is the direct one-on-one interaction between end user who makes the purchase and the representative of the company that is selling it. Most of the retailers understand that this direct interactions is a critical factor in confirming buyer satisfaction and encouraging repeat business. Nowadays, most of the business are serving the customer service by automated self-service systems but it can’t speak as a human being and is seemed as necessary to most businesses. The customer service representatives are the persons who have to deal directly with the prospect buyers of your products. The buyers’ regards of the organizations and the product are shaped in part by their experience in communication with the person. Customer Service can be defined as the attitude, it is everyone’s job and it is not a department. Below are the customers service quotes that every organization should realize. (https://www.investopedia.com)
- Customer doesn’t care how much you know until they know how much you care
- Get closer than ever to your customers. So close that you tell them what they need well before they realize it themselves.
To develop the long term relationships, cooperation, information sharing and trust in implementing logistics management of firm depend on the customer service activity. Because it is the important interface between supplier and customer, the customer service interface has obvious implications for relationship quality and exchange of information between 2 firms (i.e, Business to Business). The nature of interaction between the supplier and customer are fully depends on the quality of service and relationship between them in logistics management which insights the role of customer service in enhancing customer relationship and customer satisfaction.
The term ‘customer service’ in logistics considerably utilized to mention both marketing and substantial distribution activities which aimed at enhancing the product offering or facilitating the exchange process between supplier and customer. But it has been proved that an institutional client in the logistics has much greater and often different requirements than the end consumer, at the same time appearing in two role of the supplier and the customer, and first and foremost, should take an active part in creating and implementing logistics strategy.
Performance Criteria for Customer Service
Logistics is one of the management of flows products, finance, information among business functions. It performs the important part of the supply chain along with procurement, new product research and development, sales & marketing, operations, finance and customer service. Previously logistics was in the form of a supportive duties to all the functional areas but in nowadays it has been provided a far-reaching strategic role.
The crucial of logistics has significantly improved with advancements in communication and transportation technology. It has an important role to perform even in understanding the aim of regional business integration and development (Tongzon, 2011). It possess a huge impact than just transaction cost and on-time delivery (Kumar, Andersson & Rehme, 2010). During processing time, all the sales and market information strategies are combined with all aspects of logistics strategy with a clear focus on customer service, then logistics distributes to organizational competitive responsiveness. Thus the good coorperative logistics strategy improves customer service effectiveness as well (Kohn, McGinnis, & Kara, 2011).
Most of the organizations attempted to keep fully owned supply chain with the thinking of forward and backward vertical integration. According to some competition, businesses are now forecasting specialized fields to build major competencies in specific areas and strive to gain competitive advantage by delivering better outcomes to customers. Logistics management is is very important that try to possess competitive advantage.
It could be the best resource for the successful organizations because most of the competitors firms are not able to attain it. Even they can compare with other facilities but it is difficult to obtain customer satisfaction. The best practices that the latest logistics management practice is the reduction of stocks, reduce cost of production but better quality, and lead time.
To develop the positive goodwill among customers and in the industry, customer service is crucial. The key factors that should perform are to make your stakeholder satisfy your service, maintain their relationship, timely attention to the matters informed by the customers.
All logistic organizations should have the clear set of goals and objectives. It is necessary to define the logistics industry as a whole. There are several goals and objectives for logistics industry. These are:
- ncreasing Efficiency
- Rapid Response
- Fewer unexpected Events
- Minimum Inventory
- Reduced Transportation and Logistics Cost
- Quality Improvement
The most important and preference for every logistics industry is increasing efficiency for both inbound and outbound logistics and transportation. To make it success, the improvement in cost effective transportation, decrease in overhead, processing expenses for cost per order and inventory. By operating efficiently, standard operations processes, layout and process flow of warehouse operations will be better too. Working together with the suppliers who provide value added services such as packaging or quality inspections will help in efficiency increasing. Logistics management will know their flows and sharing best practices and other opportunities.
Same as the efficiency, customer satisfaction is important factor to be the successful logistics entity. Fulfilling customer service goals, is considering as a rapid response approach. The advantage of latest technology is that we can control and check the logistics operations through the system. It can manage the storage of the excessive inventories in the thinking of that customers requirement will be more. Nowadays, logistics management are fulfilling customer requirements based on a delivery-to-delivery basis.
These can occur in every aspects of logistic operations. Disruption at the time of manufacturing, goods received are damaging at the final place, Takes long time to deliver customers order or doing wrong delivery, all these are the wasting of time and resources used. To control these, the software which are capable of obtaining a positive logistics system control are used. To be the best, everyone should participate to minimize the unforeseen matters.
Inventory management is also very crucial for logistics management. Inventory availability and increase in turnover shows that the stocks are utilized effectively. The aim of reducing inventory movement to the minimum possible levels also makes the customers satisfying and less the total logistics cost.
Reduced Transportation Cost
It is the main cost in logistics. It is directly connected with the mode of product being shipped, the measurement of the shipment, and also the location. Most of the logistics systems that offer premium, high quality service are mostly based on high speed, small shipment transportation. Ability to make small shipments consolidated is very special. If the shipment is huge, and the location is far, cost per unit will be cheaper.
Another goals that every logistic organization should achieve is to improve in quality, increasing their services and getting customer satisfaction. Total Quality Management becomes the main issue throughout the business landscape.
All these main goals and objectives should be obtained by every logistics organization. It will benefit both the organization and the customers.
Physical Distribution is the movement of finished goods from the final step of production operation to the end users. It includes wholesaling and retailing distribution channels, and also crucial decision factors such as customer service, inventory control, materials handling, protective packaging, order processing, transportation, warehousing. It is part of the process called distribution, which wholesale and retail marketing are included.
Logistics is harmonizing the movement of goods, services, and concerned information between members of supply chain. The main target of its is physical distribution or marketing logistics, doing the planning, implementing and controlling the physical flow of materials, finished goods and concerned information from points of origin to points of consumption to reach end user requirements with profit. Physical distribution includes the handling and moving of raw materials and finished goods from the production to end user often through the agent. It is the design and administration of systems to control the flow of products. It produces ‘time’ and ‘place’ utility, which highest the value of products by delivering to the right customer at the right time and place.
Physical distribution has 2 dimensions, the process of information from the individual customer or groups of customer to the producer and the process of materials from the production to the end user. The main functions of physical distribution process are
- Customer Service – It must set the customer satisfaction that should make sure that all the product are delivering to the end users and it maintains the standard.
- Order Process – It is the most important process for the organization as it need to take orders from various customers and to ensure all the orders are satisfied by customers. It should handle efficiently. By doing this, it can minimize the cost of transportation and logistics.
- Inventory Control – It is also one of the crucial process in the physical distribution. Inventory carrying costs, depreciation costs are included.
- Transportation and logistics – It is the process to communicate with the procurement of raw materials supplier and final delivery of the finished products to the customers. Depends on the location and the urgency of the order, different transportation mode will be arranged.
- Packaging – It could be different based on the product and the level of protection requirement for the products.
Customer service is significantly important in logistics management of physical distribution operation
In nowadays, a customer experience is very important in global marketing and it can determine a reputation of a business firm. Thus, a customer service plays a vital role in the modern marketing nowadays. Sometimes, customer service looks like a science for selecting a service which is necessary to customer in order to keep and to attain the customer loyalty by providing quality service and efficient communication which will support an image of customer value. Actually, a customer service is one of the components in the modern marketing management which has changed largely from the previous time according to the current market place is basically changed from the past which leads to many challenges. Therefore, the business firm has to compete with its rivals as well as to develop or create a proper satisfaction which will keep a customer loyalty for a long term. Additionally, Ferrell et al. (2015) pointed out that a customer satisfaction is one of the most important factors in a successful business strategy.
There are two things that the people talking about in the present global market; quality of service and a quality product. Therefore, a customer service is becoming a major role of the marketing because of globalization and technology that the major forces for making new challenges in the market as well as creating different opportunities in the market.However, the present economic tendency is facing both opportunity and threats. A customer may share his experience with others in terms of a customer service of a company. A company could attain a good reputation according to its quality of service if a company makes its customers satisfy. Consequently, a happy customer will indicate others for a company’s servicing and it will help to spread the company’s image for making a business in the market. However, it is very difficult to provide or maintain a perfect customer service because it will be according to temporal and spatial factors. Therefore, it is impossible to provide a perfect service to everyone but it can be possible to provide the best service possible.
Kotler and Keller (2016) stated that the physical distribution commences at the factory and it is required to make a consideration on a place of warehouse and transportation that will influence on delivering the products or goods of the company.
For a logistics session, some companies may rely on the third party to facilitate or helping for transportation in order to deliver their products to customer in time and on time. Therefore, a business firm must consider for targeting its customer who prefers to a short response time and it is necessary to locate adjacent to customers (Chopra and Meindl, 2016).Moreover, a business firm needs to think about its rivals’ service standard. A relation with customers is more important than those with employees of a company in terms of logistics.
The business firm has to consider in terms of decision making for the company’s value proportion to its customers and it is also required to develop an operation for warehouse management and transportation management which are important to customer satisfaction. Therefore, a business firm needs to consider collecting raw material, storing, warehousing, delivery which are involved with physically distributing product.
Many companies emphasize on the logistics management by producing the right products to the right places at the right time with minimum costing (Kotler and Keller, 2016). Hence, a customer service in logistics is mainly the activities that relates with servicing that providing besides the business firm’s product. The end user will be fully satisfied if the products were available at the time they require with enough quantity.
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- Tongzon, J. (2011). Liberalisation of logistics services: the case of ASEAN. International Journal of Logistics: Research and Applications, 14(1), 11-34.
- Kohn, J. W., McGinnis, M. A., & Kara, A. (2011). A structural equation model assessment of logistics strategy. The International Journal of Logistics Management, 22(3), 284–305.
- Kumar, N., Andersson, D., & Rehme, J. (2010). Logistics of low cost country sourcing. International Journal of Logistics: Research and Applications, 13(2), 143-160.
- De Wit (2017) argued that logistics should be focused on reducing shipping distances, streamline handling and improve vehicle route.