How can you make sure your clients get the right product at the right time in the right condition? Find out.
When business leaders talk about improving their supply chain, they’re mostly focused on making more money by improving lead time, product availability, and distribution. But what about the customers?
How does your supply chain influence your company’s ability to make clients happy?
If your goal is to get the right product to your customer at the right time in the right condition to ensure satisfaction, your logistics and supply chain play a critical role.
To help you succeed, we have identified seven easy ways you can keep your clients happy by improving your supply chain.
#1 – Pick the right transportation partners:
Does your business have unique needs such as special trailers, trucks or delivery requirements? If so, make sure you select partners with strengths that align with your business needs and customer requirements. If not, your customers might not get what they are expecting.
For example, we worked with a company that required specially configured trailers to safely transport caskets. To fulfill the orders, we made sure the trucks were configured to maximize the number of caskets that could be transported and minimize shipping damage.
The same careful consideration for shipping arrangements is necessary to transport many unique components in the aerospace or automotive industries.
The last thing you want is for your customers to receive a product that isn’t up to their standards or arrives damaged because of poorly planned transportation. That would make the account more difficult to service than planned. All resulting in customer dissatisfaction.
#2 – Make logistics planning an integral part of the production process:
Logistics is often figured out after the order is manufactured, but it should be part of the quoting process if you want to keep your customers happy.
Not only does that guarantee an accurate available-to-promise commitment, but it can also ensure proper shipment planning as well as lead to a potential cost savings.
We’ve seen examples of customers that did not plan for packing configuration and ended up with dead space, limited trailer capacity, or significant damage because of packaging design (such as a leaking chemicals in a shipping container).
Logistics should also be factored into the cost and transit time estimates in the quoting and planning processes. Take into account the ship-to destination country to minimize a combination of transit times and shipping costs.
For example, evaluate the differences between shipping to Asia from Singapore versus from a European or US-based facility. Determine which facilities have favorable trading agreements to destination countries to better manage international shipping and customs processes.
We’ve seen companies that did not plan for international or transoceanic shipments of products, so they experienced significant delays in delivering their products due to international shipping and customs processes. Imagine how their customers felt.
#3 – Conduct an end-to-end supply chain analysis:
Review your end-to-end process to make sure the organization is not optimizing a process at the expense of another part of the organization. For example, we worked with a business that focused on minimizing shipping costs at the expense of holding higher inventories at distribution sites.
Through an end-to-end supply chain analysis, we determined the company would actually benefit from holding lower safety stock quantities. A smaller batch would lead to:
- More frequent truckload replenishment cycles
- A reduction in inventory working capital by $11 million
- A $1.6 million decline in annual product obsolescence or damage
- While only increasing annual distribution costs by $550K
As another example, we had a customer stocking high-end, low-volume “D” SKUs with an average demand per location at less than one unit per year. Why not make the product to order and express ship it – instead of shipping on a Full Truck Load (FTL)?
This approach resulted in higher shipping costs per unit. But it significantly reduced inventory carrying costs for a product suffering from low volume and a longer shelf-life. Best of all: It increased customer satisfaction because they received less damaged products.
#4 – Define your logistical processes:
Processes need to be established for logistical operations. According to the Council of Supply Chain Management Professionals, logistics is:
- The process of planning, implementing and controlling procedures for the efficient and effective transportation and storage of goods, including services and related information, from the point of origin to the point of consumption for the purpose of conforming to customer requirements.
Are these processes documented and understood throughout your organization? Have team members been trained on these processes? Team members also need to update the processes as business and customer needs evolve and require continuous improvement.
Establishing these processes is a critical part to meeting customer requirements.
#5 – Link your back-end and front-end deliveries:
Logistics generally involves the delivery of goods from your organization, but the organization should also consider the delivery (or pick-up) of raw materials to minimize costs and improve delivery times.
Can the front-end, raw material deliveries be integrated into your back-end delivery of products?
For our clients, we always aim to identify raw material suppliers in close proximity to finished product customers. That helps avoid trucks dead heading, minimize shipping costs, and reduce delivery times. All with the goal of making that customer happy.
#6 – Increase your asset utilization:
Generally speaking, the higher the asset or trailer utilization, the better. But some companies could use improvement in this area.
Analyze which assets are utilized, when they’re utilized, and if that meets your supply chain delivery requirements. Here are some questions to consider:
- Are certain assets highly utilized at certain times and idle at other times?
- Are team members only utilizing newer trailers or rigs?
- Are they letting the older ones stay idle?
Figure out what is causing the underutilization and creatively brainstorm how to make improvements. That could mean the difference between a satisfied and unsatisfied customer.
# 7 – Measure your supply chain performance:
Measure what is important to the business. Go through the process to determine what metrics are important to meeting your supply chain objectives.
Set Key Performance Indicators (KPIs) that enable measurement of performance versus targets. Your company’s KPIs need to be meaningful, relevant, visible and understood. These KPIs will be used to drive performance improvement.
Good KPIs can include: on-time final delivery, cost-per-pound, on-time shipping, order accuracy and dock-to-stock cycle time.
One of the best over-arching KPIs in a supply chain is known as the “Perfect Order” metric. It is defined as the percentage of orders delivered:
- to the right place
- with the right product
- at the right time
- in the right condition
- in the right package
- in the right quantity
- with the right documentation
- to the right customer
- with the correct invoice
- in the manner the customer wants.
This may be daunting but it is the new baseline to keeping your customer satisfied. We know that happy customers stay with their suppliers and continue to buy!
