Page 71 - DMGT523_LOGISTICS_AND_SUPPLY_CHAIN_MANAGEMENT

Logistics and Supply Chain Management

Notes shipment or due to in-transit damage is more costly than performing it right the first time.
Logistics is a main part of developing and maintaining continuous TQM improvement.

 Life-cycle Support: The final logistical aim is life-cycle support. Very few items are sold
without some guarantee that the product will perform as advertised over a period. The
normal value-added inventory flow toward customers must be reversed. Product recall is
an important competency that results from increasing rigid quality standards, product
expiration dating and responsibility for hazardous consequences. Return logistics
requirements also result from the increasing number of laws prohibiting disposal and
encouraging recycling of beverage containers and packaging materials. The most important
aspect of reverse logistical operations is the need for maximum control when a potential
health liability exists. A recall programme is similar to a strategy of maximum customer
service that must be executed regardless of cost. The operational requirements of reverse
logistics range from lowest total cost, such as returning bottles for recycling, to maximum
performance solutions for critical recalls.

Notes The important point is that sound logistical strategy cannot be formulated without
careful review of reverse logistical requirements.

The importance of service support logistics changes directly with the product and buyer. This
applies especially to firms marketing consumer durables or industrial equipment. The
commitment to life-cycle support constitutes a demanding operational requirement as well as
one of the largest costs of logistical operations. The life-cycle support capabilities of a logistical
system must be carefully designed. Reverse logistical competency, as a result of worldwide
attention to environmental concerns, requires the capacity to recycle ingredients and packaging
materials.
Logistical service is measured in terms of:
 Availability: Availability denotes having inventoried to consistently meet the need of
the customer material or product requirements.
 Operational Performance: Operational performance means the elapsed time from order
receipt to delivery. Operational performance involves delivery speed and consistency. A
firm’s operational performance can be measured in terms of how flexible it is in
accommodating unusual and unexpected request of customer.

 Service Reliability: Service reliability pertains to the quality attributes of logistics. For
logistics performance to continuously meet customer expectations, it is necessary that
management should be committed to continuous improvement.
3.3.2 A Model of Customer Satisfaction

This model can help a firm desirous of improving service quality to focus better on its strategies
and service processes. This model can not only be used to find and identify areas in service
delivery and designs (which might lack quality), but also measure and monitor quality in
service.
Quality in service is as perceived by the customer. There is no other way to either comprehend
or administer. As service is intangible; the only way to measure quality in service is to measure
the expectation of the customer before the receipt of service and measure his perception after the
experience, that is, the service encounter. The gap between the two is a measure of the service
quality. The larger the gap, the worse is the service quality; the narrower the gap, better the

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