Page 69 - DMGT523_LOGISTICS_AND_SUPPLY_CHAIN_MANAGEMENT

Logistics and Supply Chain Management

Notes 3.3 Customer Satisfaction

Customer satisfaction is the degree to which customer expectations of a product or service are
met or exceeded. Logistics exists to satisfy customer requirements by facilitating important
manufacturing and marketing operations. The most demanding service commitment is to focus
on facilitating customer success. By definition, a success program and its related commitments
focus on long-term business relationships that have growth potential and offer high probability
of achieving the desired results.

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Caution To ensure that a customer is successful may require a supplier to help reinvent
the way a product is sold or distributed.

3.3.1 Measurement of Customer Satisfaction

There are a lot of challenges that service marketers face due to the basic difference that prevails
between service and goods. Some of the challenges that they constantly face are:
 Understanding customer needs and their expectations from service;

 Tangibilising the service offering;
 Dealing with different types and varieties of people – internal as well as external customers
– as also the delivery issues;
 Keeping promises made to customers.

But the most intriguing challenge is the measurement and monitoring of quality.
Some questions regarding quality of service still elude any definitive answers:
 How can service quality be defined and improved when the product is intangible and
non-standardized?

 How can new services be designed and tested effectively when the service is essentially an
intangible process?

 How can the service firm be certain that its communication has been effective, consistent
and relevant, especially when its other marketing mixes are also communicating? This
apprehension is especially true with respect to the role played by the providers in the
service transaction.
The various operational objectives which logistics help in achieving and hence maximizing
customer satisfaction and success are as follows:

 Rapid Response: Rapid response is concerned with a firm’s ability to satisfy customer
service requirements in a timely manner. Information technology has increased the
capability to postpone logistical operations to the latest possible time and then accomplish
rapid delivery of required inventory. The result is elimination of excessive inventories
traditionally stocked in anticipation of customer requirements. Rapid response capability
shifts operational emphasis from an anticipatory posture based on forecasting and
inventory stocking to responding to customer requirements on a shipment-to-shipment
basis. Because inventory is typically not moved in a time-based system until customer
requirements are known and performance is committed, little tolerance exists for
operational deficiencies.
 Minimum Variance: Variance is an unexpected event that disrupts performance of the
system. Variance may result from any aspect of logistical operations. Delays in expected

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