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Prestige Institute of Management & Research

Logistics & Supply Chain Management

Assignment No. 02

Submitted By:Hemant Raghuvanshi MBA (PT)-IV

(4) Convenience. customer service can be viewed as having four dimensions:(1) Time. The power of the brand has steadily declined and customers are willing to experiment with substitutes even technology differences between products has been removed so that it is harder to maintain competitive edge through the product itself. From the point of view of logistics function. (3) Communication. Dimensions of customer service Demand forecasting principles & methods Order processing & management system Answer No 1 Dimensions of customer service The ultimate or primary objective of any business in to provide excellent service.Questions & Answers Q1 Briefly explain the following. The objective of supply chain should be to establish a chain of customers that links people at all levels in the organization directly or indirectly to the marketplace. The source of competitive advantage is found firstly in the ability of the organization 2|Page . there are sign to show that this is quickly changing. It follows then that the main purpose of any logistics system also is to satisfy customers. It is an activity that might not be well understood if you are a manager responsible for production scheduling or inventory control which are activities that seem to be some distance from the marketplace. (2) Dependability. Quote suitable examples wherever necessary. The marketing and logistics interface The right product at the right place at the right time has rarely been considered in mainstream marketing to be very important. However.

thus making product differences difficult to perceive at least to the average buyer. parts and repair service.g. written statements of service policy. By this it is meant that increasingly the power of the brand is diminished as technologies of competing products differentiate in the eyes of the customer. Secondly. In any particular product market situation. For example the core product can be said to be quality. A major study conducted recently has suggested that customer service could be examined under the following 3 headings: • • • Pre-transaction elements Transaction elements Post-transaction elements Pre-transaction elements of customer service relate to corporate policies or programs i. durability and augmented product can be delivery and lead time 3|Page .e. adequacy of organizational structure and system flexibility. product and delivery reliability. from its competition and secondly from operating at lower cost and hence at lower cost and greater profit. Customer service and customer retention It is apparent from issues discussed that organizations that compete only on the products features will find themselves at a severe disadvantage to those companies that augment the basic product with value-added services. some of these elements may be more important than others and there may be factors other than those listed above which have significance in a specific market. In these situations it is customer service that can provide the distinctive difference between the company's offer and that of its competitors. technology. The concept that should be recognized here is that the product in the warehouse is very different from the product in the customer’s hands since the customer looks at the benefit from the product rather than the product itself.g. product warranty. it is also recognized that there is a slow but indubitable movement to commodity type markets. The transaction elements are those customer service variables directly involved in performing the physical distribution function e. procedures for customer complaints and product replacement. product features. The post transaction elements of customer service are generally supporting of the product while in use e. What is customer service? In practice many companies have varying views of customer service. In the now famous management book 'In search of excellence' it was identified that excellent companies are those that can attract customers and maintain long term relationships with them.

Define customer service objectives 3. Design the logistics system Identify customers service needs The approach to service segmentation suggested here follows a three stage process: 1. Identify 'clusters' of customers according to similarity of service preferences. bringing with it new complexities and concerns for management generally. Establish the relative importance of those service components to customers. Identify customers' service needs 2. single point of contact. it also has to be recognized that the impact of these changes on logistics can be considerable. The main idea of service driven logistics systems is to meet predefined service goals. Identify the key components of customer service as seen by customers themselves. Service driven logistics systems The role of logistics can be seen as the development of systems and the supporting co-ordination processes to ensure that customer service goals are met. Of the many issues facing organizations today perhaps the most challenging are in the area if logistics. Another important concept that should be clearly recognized is the lifetime value of a customer is much greater than the profit generated from just a single deal with that customer. A simple formula follows: Lifetime value = Average transaction value * Yearly frequency of purchase* customer life expectancy More on customer service and customer lifetime value can be found here. 4|Page .flexibility.  Identifying key components of customer service. Ideally all logistics service systems are defined along the following lines: 1.  Establishing relative importance of customer service components  Identify customer service segments  Defining customer service objectives Setting customer service priorities As the new competitive context of business continues to change. delivery reliability and consistency. 2. ease of doing business and after sales support. 3.

is by visiting a selection tree. or alternatively to less formal judgemental methods. embraces both statistical forecasting and a consensus process. also sometimes referred to as supply chain forecasting. is the relationship it holds with planning. An important.g. There is no single right forecasting method to use. Prediction is a similar. Box-Jenkins • • Extrapolation Linear prediction 5|Page . Usage can differ between areas of application: for example in hydrology.' Demand forecasting principles & methods Forecasting is the process of making statements about events whose actual outcomes (typically) have not yet been observed. such as the number of times floods will occur over a long period. Categories of forecasting methods Time series methods Time series methods use historical data as the basis of estimating future outcomes. while the term "prediction" is used for more general estimates. The method uses Forecasting to reduce the energy needed to heat the building. The discipline of demand planning. Forecasting can be described as predicting what the future will look like. Forecasting is used in the practice of Customer Demand Planning in everyday business forecasting for manufacturing companies. the terms "forecast" and "forecasting" are sometimes reserved for estimates of values at certain specific future times.Setting service standards We are entering the era of supply chain competition . whereas planning predicts what the future should look like. Risk and uncertainty are central to forecasting and prediction. A good place to find a method. it is generally considered good practice to indicate the degree of uncertainty attaching to forecasts. Both might refer to formal statistical methods employing time series. The process of climate change and increasing energy prices has led to the usage of Egain Forecasting of buildings. • • • • • Moving average weighted moving average Exponential smoothing Autoregressive moving average (ARMA) Autoregressive integrated moving average (ARIMA) e. albeit often ignored aspect of forecasting. A commonplace example might be estimation for some variable of interest at some specified future date. but more general term. thus reducing the emission of greenhouse gases.the fundamental difference here is that the company cannot act individually but must act as a supply chain entity to ensure competitiveness in the marketplace. cross-sectional or longitudinal data. Selection of a method should be based on your objectives and your conditions.

Q2 With the help of a diagram depict the various classifications / types of Supply Chain strategies. Types of Logistics Strategies • Time Based • Asset Productivity Based • Technology Based • Relationship Based 6|Page .

more responsive decision making can lead to dramatic reductions in lead time or cycle time. performing those processes faster will reduce cycle time. and there is much evidence to indicate that companies have been successful in reducing inventory levels or investment. and decision-making. the response to this matter is more of a strategic matter than one related to logistics operations. empowering individuals to make decisions can be one of the most important ways to speed cycle time. and enhance customer service. for example-can significantly reduce the time needed to complete the transaction. Some reductions have occurred here as a result of contraction of this equipment and smarter. improve cash flow. The utilization of faster. leadingedge companies have used a number of initiatives to improve their competitive position by reducing cycle time. If logistics is seen as a series of processes. producing significant benefits in terms of efficiency and effectiveness. Technology-based strategies It has been evident for some time that the realization of future logistics goals will depend significantly on the further development and utilization of information technologies.Time-based strategies Reductions in cycle time are based on three factors: processes. Finally. information. because of the potential to reduce costs. Another key area that has had a dramatic impact on asset productivity is the use of third party logistics (3PL) service. Overall. faster and more accurate flow of information. have been the focus of much attention and have enabled companies to gain a competitive advantage. The decision to utilize 3PL companies has been fostered in part by the interest in reducing asset investment to improve asset productivity. Whether it is in the 7|Page . Asset productivity strategies One of the first assets to receive attention has been inventory. Many famous companies are users of 3PLs. Time-reduction strategies. Strategy to keep the goods moving throughout the logistics system has contributed to effective use of logistics facilities thus squeezing more productivity from these assets. more sophisticated equipment dispatching software. It is true that there must be some firms that actually provide the asset-based services. The move to utilize a 3PL is also the trend of 5 focusing upon core competencies as a strategy to operate more efficiently and effectively. and quicker. focusing on managing logistics services rather than on the assets themselves. The combination of improved (faster) logistics processes. more efficient forms of order transmission-EDI or the Internet.

to foster new different and innovative ways to solve business problems and capture new business. Order processing operations or facilities are commonly called "distribution centers". and technologies are achieving higher levels of Integration. these technologies will be the springboard for progress and innovation. increase supply chain efficiency. It creates a synergistic business environment in which the sum of the parts is greater than the whole. Since it is difficult to imagine very many logistics or supply chain improvements that involve only one firm. There is no "one size fits all" process that universally provides the most efficient operation. Order processing & management system Order processing Order processing is a key element of Order fulfillment. predefined trading partners. Properly executed. It means that companies leverage each other on an operational basis so that together they perform better than they did separately. the goal of which is to provide perfect information and to facilitate tight management of deliveries. and costs. Relationship-based strategies An area of significant strategic interest is that of relationships and relationship formation in the logistics processes. collaborative logistics can significantly reduce costs. Collaborative logistics is defined as mutually beneficial cooperative problem solving and opportunity exploitation – beyond traditional.form of hardware. and make trading partners more flexible in addressing shifts in consumer demand. Some of the factors that determine the specific process flow of a distribution center are: 8|Page . "Order processing" is the term generally used to describe the process or the work flow associated with the picking. software. appearing in various guises. The specific "order fulfillment process" or the operational procedures of distribution centers are determined by many factors. by a single integrated process. but. enterprises. Collaboration goes well beyond vague expressions of partnership and aligned interests. or connectivity. the need for effective relationships is obvious. packing and delivery of the packed item(s) to a shipping carrier. It is clearly emerging that information. inventories. increasingly. The movement of materials and products is not governed by discrete functions. Each distribution center has its own unique requirements or priorities.

consolidation of orders. The effect of Globalization has immense impacts on much of the order fulfillment but its impact is felt most in transportation and distribution.the ratio of the value of the shipped product and the order fulfillment cost Seasonality variations in outbound volume .cases.can create trade-off decisions in automation and manual processing operations Timeliness of shipment windows . Because each factor has varying importance in each organization the net effect is that each organization has unique processing requirements. Q3 Differentiate between the following: i) Technology based strategies v/s relationship based strategies ii) SCM planning v/s SCM implementation iii) Order forecasting v/s order processing 9|Page . product and order profiles Predictability of distribution network .influence on manual verses automated process decisions and longer term benefits Value of product shipped . totes.the number of differing items and quantities of each item in orders The nature of the shipping packaging .when shipments need to be completed based on carriers can create processing variations Availability of capital expenditure dollars .• The nature of the shipped product . shipping pre-sort can change processing operations Availability and cost and productivity of workforce . pallets can create process variations Shipping costs .amount and duration of seasonal peaks and valleys of outbound volume Predictability of future volume. envelopes.whether or not the network itself is going to change • • • • • • • • • • This list is only a small sample of factors that influence the choice of a distribution centers operational procedures.shipping eggs and shipping shirts can require differing fulfillment processes The nature of the orders .

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