Page 59 - DMGT523_LOGISTICS_AND_SUPPLY_CHAIN_MANAGEMENT

Logistics and Supply Chain Management

Notes Introduction

Logistics contributes to an organization’s success by providing customers with timely and
accurate product delivery. The key question is who is the customer? For logistics, the customer
is any delivery destination. Typical destinations range from consumers’ homes to retail and
wholesale businesses to the receiving docks of a firm’s manufacturing plants and warehouses. In
some cases, the customer is a different organization or individual who is taking ownership of
the product or service being delivered. In many other situations, the customer is a different
facility of the same firm or a business partner at some other location in the supply chain.
Regardless of the motivation and delivery purpose, the customer being serviced is the focal
point and driving force in establishing logistical performance requirements. It is important to
fully understand customer service deliverables when establishing logistical strategy. This unit
details the nature of customer service and the development of facilitating strategies.
For a logistician, a customer is any delivery location. Typical destinations range from consumers’
homes to retail and wholesale businesses to the receiving docks of manufacturing plants and
distribution centres. In some cases the customer is a different organization or individual who is
taking ownership of the product or service being delivered. In many other situations the customer
is a different facility of the same firm or a business partner at some other location in the supply
chain. It is common for the logistics manager of a retail distribution centre to think of the
individual stores to be serviced as customers of the distribution centre, even though the stores
are part of the same organization.
Regardless of the motivation and delivery purpose, the customer being serviced is the focal
point and driving force in establishing logistical performance requirements. It is critical to fully
understand customer needs that must be accommodated in establishing logistical strategy. This
unit details the nature of various approaches to accommodating customer requirements.

3.1 Customer-Focused Marketing

The logical starting point is to understand how logistical competency contributes to marketing
performance. Firms guided by market opportunity, view satisfying customer requirements as
the motivation behind all activities. The objective of marketing initiatives is to penetrate specific
markets and generate profitable transactions. This posture, often referred to as the marketing
concept, emerged as part of the post-World War II shift from seller- to buyer-dominated markets.
In this section, attention is directed to three fundamental concepts. First, the essence of a
marketing orientation to business planning is developed. Next, the increased attention to
developing logistics as a core competency is discussed. This notion of treating logistical
competency as a strategic resource is critical to customer service planning. Finally, the changing
nature of most desired logistics practice is examined in terms of product life-cycle requirements.
It is important to understand that logistical performance should be modified over time to
accommodate changing marketing requirements.

3.1.1 Managing Consumer Waiting Periods

Most good customer service benchmarks include the length of the waiting time – in airlines,
banking, health service, shopping, etc. Customers tend to lose patience, and the service firm has
to agonize in choosing speed over security. But the world over, delayed service is perceived as
inefficiency. Waiting time management is a challenge but can be creatively handled. Doctors in
their clinics have ergonomically designed lounges, magazines and softly played televisions.
Hairdressers too have magazines and extra chairs while airlines are splurging on exclusive
lounges. Some examples of customer wait management:

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