brings us to customer satisfaction, right?
So basically customer satisfaction has long been a fundamental concept
in marketing and business strategy
and building a customer satisfaction program.
However, the first question that should be answered is
what does it mean to say that a customer is satisfied?
The simplest and the most widely accepted method
of defining customer satisfaction is based on customer expectations.
So simply stated,
if a customer's expectation of a supplier performance are met,
and exceeded the customer will be satisfied fine.
Conversely for perceived performance is less
than what the customer expected.
Then the customer is dissatisfied.
So while this framework for customer satisfaction is
relatively straightforward the implications
for building a customer service platform in logistics are not
to build this platform.
It's necessary to explore more fully the nature
of customer expectations.
So what do customers expect?
How do customers form these expectations?
What is the relationship between customer satisfaction
and customer perceptions of overall logistics service quality?
Fine.
Let's move on to customer expectations.
Now, it's clear
that when customers conduct business with the supplier,
they have numerous expectations.
Many of which revolve around the supplier's basic logistical
service platform.
That is, you know,
they have expectations regarding availability,
the operational performance and service reliability.
So frequently companies have formal programs
to monitor supplier performance with respect
to each of these dimensions of logistical performance.
So it's, you know,
basically simply put in a logistics
and supply chain context.
The notion of customer expectations
is particularly complex because the customers
are frequently business organizations made
up of numerous functions and individuals.
So if you look at a model of customer satisfaction,
you know, there are some factors
that influence customer expectation both in terms
of a prioritization of the criteria
which I've discussed with you as well as the level
of expectation related to each of the criteria basically fine.
Now related to a customer's perception
of past performance is word of mouth.
In other words,
customers frequently communicate with one other concerning
their experiences and in today's world in which,
you know,
you have internet accessibility almost every segment
of the population,
you know, within a jiffy,
you'll have customer feedbacks happening
on various social media platforms.
That's something which is supposed to be factored
into the scheme of things basically fine.
And you know,
if you talk about increasing customer expectations fine
as an important component of TQM,
the notion of continuous improvement has been accepted
by most organizations
and as a corollary of continuous improvement,
there has been a continued escalation
of customers expectations concerning supplier capabilities.
So performance that meets customer expectations one year
may result in extreme dissatisfaction next year
as customers increase their expectations regarding
acceptable performance levels to some extent basically
to some extent the increase in expectations can be traced
to the dynamics of competition fine.
So if a business wanted to be a serious competitor,
it generally had to achieve these minimum industry
service expectations basically.
So there's a there's a question does achieving
perfect order performance ensure
that the customers are satisfied,
you know on the surface,
it would seem so after all if all orders are delivered
with no defects
what basis exists for customers to be dissatisfied part
of the answer to this question lies in the fact
that perfect orders
as important they are deal with the execution
of individual transactions and deliveries
whereas customer satisfaction is a much much broader concept
dealing with many other aspects
of overall relationship between suppliers and customers.
So what are the limitations
of customer satisfaction basically because
of its explicit focus on customers a commitment
to satisfaction represents a step beyond
a basic service platform in an organization's effort
to develop customer relationships.
So it's realistic to think
that a firm satisfying customer expectations better
than the competition will gain some competitive advantage
in the marketplace.
So that brings us to customer success basically fine.
So in the recent years some businesses not
all have discovered that there is another commitment
that can be made to gain true competitive advantage
through logistical performance, right?
Now this commitment is based on recognition
that a firm's ability to grow
and expand market share depends on its ability to attract
and hold the industry's most successful customers.
Then to customer focus marketing lies
in a company using its performance capabilities
to enhance the success of those customers basically fine.
And when we sort of basically talk
about it we should understand
this customer success shifts the focus from expectations
to the customers real requirements.
For example,
a customer may be satisfied with the 98% fill rate
but for a customer to be successful
in executing its own strategy a hundred percent fill rate
in both or certain products
or components may be necessary depending upon
whatever he or she has ordered fine.
And if you talk
about achieving customer success clearly a customer
success program involves a thorough understanding
of individual customer requirements
and a commitment to focus on long-term business
relationships having a high potential for growth
as well as profitability.
As an example,
let's take Raytheon it is adapted
and trademarked the slogan customer success is
our mission think about
and arms manufacturer talking about customer success
as its mission right now
in many ways a customer success program requires
a comprehensive supply chain perspective.
I'm part of the logistics executives fine.
This is most easily explained by understanding the fact
that the typical focus in basic service
and satisfaction programs is
that the business attempts to meet standards
and expectations of next destination customers
whether they are consumers industrial end users
or intermediate or even internal customers to ensure
that a customer is successful may require a firm
to reinvent the way a product is produced
or distributed or offered for sale.
That takes us to value-added services.
So the entire notion
of value-added service is a significant development
in the evolution to customer success.
So basically by definition value-added services refer
to unique or specific services
that firms can jointly develop to enhance
their efficiency effectiveness
and of course relevance and value-added services
help foster customer success
because they tend to be customer specific.
It's difficult to generalize all possible value-added services
basically which takes us
to the last complement of customer relationship management
which is customer relationship strategy
or rather developing customer relationship strategies.
Now as we discussed,
you know marketing concept and relationship marketing
that different customers are likely
to require different approaches
and strategies for customer accommodation fine.
Basic customer service may be appropriate
for some customers customer satisfaction for others
while a success focus may be in order for others.
In fact, a basic principle of supply chain logistics
is that customers should be segmented
based on their service needs
and the supply chain must be adapted
to service those segments only.
Let me give you an example.
You know Unilever has a presence
in some around 150 plus countries around the world
with some 180,000 employees
and offers a product portfolio
that spans grocery store shelves
with well-known trademark brand names
and categories such as spreads.
I can't believe it's not butter,
sauces from Ragu,
dressings from Hellman's and Wishbone,
beverages from Lipton T's,
ice cream, Good Humor, Andreas,
frozen food, Batali dinners
and personal care products, Dow, Saw and X.
As one part of the company's supply chain 2010 initiative,
Unilever fielded a customer service survey
to develop a complete understanding
of the future requirements and anticipated trends.
Topics touched upon included ordering
and inventory management practices,
techniques to reduce retail out-of-scrog situations,
distribution models, order profiles, blah, blah, blah, blah, blah.
And of course collaborative planning
through point of sales data.
Among the other findings,
these data gathering efforts made it clear
that retailers had increased expectations
around the performance of the 2010 inbound supply chain.
A major conclusion was that Unilever US
should strongly focus
on customer specific strategies,
supply chain initiatives.
And to accomplish this,
companies such as Unilever need both a framework
for choosing the appropriate customer specific strategies
as well as programs for customer relationship management.
Fine.
And this is this is how it panned out for them.
You know, basically it involved a specific framework
for strategic choice
and the customer relationship management technology
which was developed fine.
And you know, when you really talk about it,
when you talk about customer relationship management
relevance to logistics,
it basically lies in its need
for cross-functional transparency.
Logistics has primary responsibility
for many of the processes
that drive value and customer success.
So CRM program provides a business
with the platform necessary
for the development and management
of appropriate relationships with customers.
This is all about customer relationship management.
I'll be running you through procurement after this.