0
Chapter 9
Building External
Relationships

PPTs t/a A Framework for Supply Chains by Oakden and Leonaite
© 2011 McGraw-Hil...
Introduction
Learning Outcomes
After this lesson, you should be able to:
• Understand the different approaches to customer...
Business Type and Customer Service
A range of relationships
• Different approaches from the buyer to the seller
and from t...
Customer Service Segmentation
• Once there is an agreement to undertake a buy
and sell transaction, three factors that gui...
Customer Service Segmentation
• Due to higher value of business per customer,
commercial/industrial environment is more li...
Customer Service Segmentation
Customer service experience
• Theoretically impossible to have 100 per cent
customer service...
Customer Service Organisation Focus
• Customer service needs to be structured with
recognition of a number of aspects:
1. ...
Customer Service Organisation Focus
1. Develop a customer service culture for the
organisation
• Only about four consumers...
Customer Service Organisation Focus
2. Understand the services your customers
require
• Understanding the value that custo...
Customer Service Organisation Focus
2. Understand the services your customers
require
• Three ways to determine whether cu...
Customer Service Organisation Focus
3. A holistic view of customer service
Customer experience
• Expectations as a custome...
Customer Service Organisation Focus
4. Establish customer service standards
•

•

Customer service activities can be group...
Customer Service Organisation Focus
5. Measure customer service performance
• Companies must measure their success in term...
Being more than a Supplier of
Products
• Enterprises in the product services sector are
able to provide additional service...
Relationship Management
• Customer Relationship Management (CRM) and
Supplier Relationship Management (SRM) – IT
approache...
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A Framework for Supply Chains - Oakden - Ch 09

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Transcript of "A Framework for Supply Chains - Oakden - Ch 09"

  1. 1. Chapter 9 Building External Relationships PPTs t/a A Framework for Supply Chains by Oakden and Leonaite © 2011 McGraw-Hill Australia Pty Ltd 9-1
  2. 2. Introduction Learning Outcomes After this lesson, you should be able to: • Understand the different approaches to customer service • Recognise the range of business relationships available and that all are equally valid • Structure a customer base to segment customer service • Approach customer service based on the premise that 100 per cent service is uneconomic for a business, therefore problems will occur • Consider the basis for a customer service organisation. PPTs t/a A Framework for Supply Chains by Oakden and Leonaite © 2011 McGraw-Hill Australia Pty Ltd 9-2
  3. 3. Business Type and Customer Service A range of relationships • Different approaches from the buyer to the seller and from the seller to the buyer. • Business relationships will develop particular attributes that have similarities and therefore can be grouped into types, such as:       Alliance Arms length Cooperative Consortium Project-based Imposed. (See Figure 9.1 for further examples and explanations for range of relationships) PPTs t/a A Framework for Supply Chains by Oakden and Leonaite © 2011 McGraw-Hill Australia Pty Ltd 9-3
  4. 4. Customer Service Segmentation • Once there is an agreement to undertake a buy and sell transaction, three factors that guide the future relationship between a buyer and seller: 1. Relationships are holistic – total experience also involves logistics, financial and information issues. 2. All customers are not the same – range of customers requires different services therefore customers must be segmented, based on a reasonable business criterion. 3. Customers define service differently from suppliers – customers should be involved in defining the service they require. PPTs t/a A Framework for Supply Chains by Oakden and Leonaite © 2011 McGraw-Hill Australia Pty Ltd 9-4
  5. 5. Customer Service Segmentation • Due to higher value of business per customer, commercial/industrial environment is more likely to segment customers by the type and level of services provided (and their price or cost). • Segmentation can be based on various factors, including:  the ‘importance’ of the customer (how much they spend or strategic importance)  the response time required following a service call from a customer  the ‘cost to serve’  the distribution channel used  the type of product purchased. PPTs t/a A Framework for Supply Chains by Oakden and Leonaite © 2011 McGraw-Hill Australia Pty Ltd 9-5
  6. 6. Customer Service Segmentation Customer service experience • Theoretically impossible to have 100 per cent customer service for delivery of product. • High customer service levels – increased costs (such as the cost of holding inventory) without a commensurate increase in sales. • Organisation will try and opt for a balance (although often not calculated) where sales are maximised at the ‘optimum’ cost level. • If customer service is not to be maintained at a 100 per cent level – department should be staffed with people who are capable and trained to resolve the inevitable challenges. PPTs t/a A Framework for Supply Chains by Oakden and Leonaite © 2011 McGraw-Hill Australia Pty Ltd 9-6
  7. 7. Customer Service Organisation Focus • Customer service needs to be structured with recognition of a number of aspects: 1. Develop a customer service culture for the organisation. 2. Understand the services your customers require—do not assume. 3. Have a holistic view of the services offered. 4. Establish customer service standards. 5. Measure customer service performance. PPTs t/a A Framework for Supply Chains by Oakden and Leonaite © 2011 McGraw-Hill Australia Pty Ltd 9-7
  8. 8. Customer Service Organisation Focus 1. Develop a customer service culture for the organisation • Only about four consumers in every 100 actually complain about the product or service. • Those who do not complain tell up to 13 family members, friends and acquaintances about their negative experience. • ‘Moments of truth’ – each ‘moment’ lasts a short amount of time; this is when a perception of the company is formed. • Multiple ‘moments of truth’ experiences in business-to-business relationships. PPTs t/a A Framework for Supply Chains by Oakden and Leonaite © 2011 McGraw-Hill Australia Pty Ltd 9-8
  9. 9. Customer Service Organisation Focus 2. Understand the services your customers require • Understanding the value that customers assign to different elements of the service package offered by a supplier is difficult. • In a commercial or industrial environment, the ‘customer’ can be many people, for example:  the engineer who initially specified the equipment  the purchasing specialist who undertook the commercial negotiations to buy the equipment  the operations person who uses the equipment  the maintenance person who approves the support visits  the accounts staff who authorise payments under the maintenance contract. Chains by Oakden and Leonaite PPTs t/a A Framework for Supply 9-9 © 2011 McGraw-Hill Australia Pty Ltd
  10. 10. Customer Service Organisation Focus 2. Understand the services your customers require • Three ways to determine whether customers are satisfied with our service: 1. Formal customer research (best conducted by an independent research firm), which requires time, effort and money 2. Informal sales force survey 3. Informal customer feedback. PPTs t/a A Framework for Supply Chains by Oakden and Leonaite © 2011 McGraw-Hill Australia Pty Ltd 9-10
  11. 11. Customer Service Organisation Focus 3. A holistic view of customer service Customer experience • Expectations as a customer of a company:  Empathy – Staff should be courteous, attentive to the issues and willing to be helpful.  Knowledge – Staff need to be knowledgeable about the products and the business and understand their company’s systems.  Dependability – Customers want what was promised. PPTs t/a A Framework for Supply Chains by Oakden and Leonaite © 2011 McGraw-Hill Australia Pty Ltd 9-11
  12. 12. Customer Service Organisation Focus 4. Establish customer service standards • • Customer service activities can be grouped into several categories through the order cycle – these categories can be the basis for establishing operating standards of performance. Examples of categories upon which to base service standards are:  convenience of placing an order—direct, through a sales representative or via a website  order status enquiry; response capability, direct or via a website  consistency and reliability of delivery to customers  using invoicing procedures and accuracy of invoices  documentation requirements flexibility (printed or computer). PPTs t/a A Framework for Supply Chains by Oakden and Leonaite © 2011 McGraw-Hill Australia Pty Ltd 9-12
  13. 13. Customer Service Organisation Focus 5. Measure customer service performance • Companies must measure their success in terms of the promises made to customers and not adopt a ‘tick the box’ approach. • Overall fulfilment measures are necessary to identify that customer service is being achieved. • Measures (or metrics) will not reflect activities of just one department, group or team, but will incorporate the activities of all staff who have customer responsibilities. PPTs t/a A Framework for Supply Chains by Oakden and Leonaite © 2011 McGraw-Hill Australia Pty Ltd 9-13
  14. 14. Being more than a Supplier of Products • Enterprises in the product services sector are able to provide additional services that are typically based in an after-sales environment, such as:  preventative maintenance o repairs o supply of service parts o retrofitting of upgraded modules o refurbishment and disposal with recycling o services on competitors’ equipment located at the customer’s premises. PPTs t/a A Framework for Supply Chains by Oakden and Leonaite © 2011 McGraw-Hill Australia Pty Ltd 9-14
  15. 15. Relationship Management • Customer Relationship Management (CRM) and Supplier Relationship Management (SRM) – IT approaches to integrating data and information, to better relate with customers and suppliers through an enhanced information capability. • In a business-to-business environment there is often an expectation of a repeat purchase – customer’s or seller’s details are recorded in the following ways:  credit check as a due diligence review so that undertaking business transactions will not deliver unwanted surprises  purchase orders and invoices issued (and recorded) by each party. PPTs t/a A Framework for Supply Chains by Oakden and Leonaite © 2011 McGraw-Hill Australia Pty Ltd 9-15
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