Customer Service in the Transport Logistics

The South African transport industry is one that is changing. In terms of Customer service there are certain companies that are excelling and are able to provide service that gains them a greater measure of customer satisfaction. Good customer service is an integral part of any business or organization. The process of managing stock, warehouse inventory, and freight transportation is at the heart of logistics. Logistics is the management and coordination of moving inventory from its origination to its ultimate destination. The goal of a logistics team is to find a way to do this process in the most streamlined, cost efficient method possible. The overall High costs in the logistics industry though are a cause for concern as they hinder the ability of organisations to provide maximum efficiency, to their customers thus not achieving maximum customer service. We will discuss what customer service is and its importance in the transport industry. We will look at the challenges facing the South African Transport industry as well as current developments going into the world cup and what these developments mean for the future of the South African transport industry. Customer Service is defined by Vogt and Pienaar as â€Å"the integrated series of activities between a supplier and a buyer, which enhance the sale and facilitate the effective use of the suppliers’ products. When rendered effectively, customer service is the overriding logistics supply chain function that can create demand and retain loyalty. In a broader sense customer service is the measure of how well the logistics system is performing in providing time and place utility for a product or service (Pienaar & Vogt; 2009, 25). According to Christopher and Peck (2003) customer service includes points of contact between a supplier and buyer also including tangible and intangible elements. Logistics performance is extremely important in achieving customer satisfaction. Importance of Customer service The importance of customer service in any organisation and the transport industry as a whole cannot be over emphasized. Customer service is the most critical aspect of the whole supply and distribution chain (Ron). According to Karl it has been proven in surveys that most customers do not come back to certain business establishment because of the indifferences they might have had with the owner, manager and employees regardless if they like the product or service the business renders. Every business management must recognize the reality that customer service is imperative in the success of the business. This ensures customer loyalty and commitment to the business. The company’s ability to focus on customers needs rather than on their own will ensure that company is cost effective and efficient at all times. Characteristics of customer service in transportation There are a number of factors that make up customer service and specifically for the transport industry these include, dependability, time in transit, flexibility of mode chosen, loss and damage performance of the mode, and ability of the transport to adapt to the changing customer needs. (Craig, 2004) Most customers are more interested about receiving their delivered goods on time than whether the person delivering the goods has a cheerful face. Successful companies try to under-promise and over deliver in terms of delivery time. This allows the firms to capture their customers ensuring that the company’s reputation is not jeopardized so firms need to ensure that their lead times are accurate. Customer service excellence is about reliability and consistency. Reliability means that the suppliers commitment to maintain a promised delivery schedule and to advise customers if deliveries subsequently cannot be made on time. This shows that the suppliers are reliable and keep the customer at ease. It is better to switch to a more expensive but reliable supplier than to rely on a relatively inexpensive but erratic supplier. Customer satisfaction is highest when a customer knows they can rely on their goods to be delivered at the specified time and that the goods will be delivered. Companies such as Manline offer customers the service of being able to track their goods in transit through a customer call centre where they can monitor their cargo through real time satellite tracking of their vehicles. Such services allow customers to be more at ease. In South Africa overall this is a concern in the transport industry as the rate of hijacking is high and thus the risk of goods not arriving is high. This means that in South Africa it is imperative that an organisation gets the best security technology in order to meet customer needs. The amount of time in-transit is another important element in customer service within the transport industry. Goods need to be transported and delivered as quickly as possible as customers need their cargo on hand as soon as possible. The flexibility of any mode of transport is another important element in customer service. If an organisation is to provide the best service they need to react to a customer’s changing needs. In the South African transport industry it is sometimes difficult for there to be immediate changes in customer requirements as the most used mode of transportation is road transportation. This means that service delivery in any other form is sometimes difficult or unreliable. The idea is to move goods as quickly, efficiently and cost effectively as possible. JIT (Just-In-Time) deliveries are a powerful force in the modern epoch. Deliveries are getting smaller but more frequent. We are moving into a situation where there is a continuous flow of goods from source to final delivery. Those carriers who are able to adapt to the changes in the market and accommodate a wide set of logistical competencies will be the winners in the new age of transport. Traditional haulers must change their ideas of what industry they belong to and face the challenges of the new order. Fast-moving, 2005) Challenges affecting customer service in South Africa Within the last couple of years the country has been able to address some of the issues within the transport industry, though there is still much that needs to be addressed. There have been various challenges that have and still face South Africa’s growing transportation and physical distribution industry. One of those challenges is that with increased globalization the local industry has to compete wi th foreign industry. Customers want the most reliable yet inexpensive way of transporting their goods and foreign companies are doing this, making it difficult for local companies to stay relevant. Another major challenge which has been addressed to an extent by some companies and aspects of the transport industry is that of technology. Customers want to know the exact specifications of the transportation of their goods. They want to know time of departure, time of arrival, amount of time in transit, and even the route of transit. This then means that the best tracking technology is required. In South Africa this high technology has been slow in infiltrating the transport industry. Devices for tracking and monitoring load carriers using real time satellite tracking is not something that is widely used in the industry. A good example of a company that is doing this though is Manline . This Company has set up a 24-hour control centre operated by fleet trackers that constantly monitor all vehicles and also to apply effective route rationalizing techniques and maximize vehicle productivity and utilization. (Manline 2010). According to the findings of the ‘Research Report for the Infrastructure Inputs Sector Strategy’, commissioned by the Presidency, and compiled by Sudeo International Business consultants. One of the other major challenges facing the South African Transportation industry going into 2010 is that freight volumes travelling by all modes of transport will have to be suppressed for the duration of the world cup. This will have considerable impact on the logistics industry as a whole. Ways to improve and Developments in 2010 The challenges that face the South African industry are ones that can be remedied. The 2010 World cup in South Africa has become a catalyst event in developments in the country and the transportation industry as it is one of the most integral parts of achieving efficient customer delivery and thus achieving high customer satisfaction. An important component of ultimate improvement would be making on-time deliveries every time. When a product is ready for use, the clock starts to count down how long it will take to complete the cycle from completing the manufacturing of a product to the consumption of that product. The longer it takes to get the product into the hands of the consumer, the more money a company loses. It is important that the products are delivered quickly and on time to the customers in order to maintain the company’s customers and keep them loyal. So how does one streamline this process? By implementing a logistics plan of action, a company can do just that. Larger manufacturers will hire a logistics team that is responsible for the routing of goods from the company, to the freight transportation company, and finally to the end client. They will have a database system to track all inventory. They will monitor inventory levels to make sure that a backlog of supply occurs. An additional responsibility of transportation and logistics specialist is to account for accurate transportation times. It is vital for companies to be able to rely and trust that their shipments will arrive in a timely manner. Being well organized accounts for much of this success, but the ability to transport the shipments quickly is also important. Because the country's infrastructure has improved with better maintained highways and interstates, transportation times have decreased. Freight transportation is more reliable now because companies can more accurately predict when a shipment will arrive. Some trucking companies will even guarantee the precise day and hour that a delivery will be made. This is very important because customer satisfaction is often based around on-time deliveries and accurate accounting of merchandise. This has also helped to reduce the cost of shipping freight, since trucking companies now have reliable, more direct routes to utilize. It indirectly affects cost because better roads create less wear and tear on shipping vehicles. It is important for the organization to answer all e-mail and phone calls from customers within an hour. If possible, the owner of the business, personally take care of the problem. This will show that the organization cares about customers and will improve the service quality of the organisation. This is an important area of improvement in South Africa as clients would be able to trust load carriers as they would be in constant contact. It will give customers peace of mind if they can continuously monitor their cargo themselves and also stay in contact with their company. The organisation should offer as many contact methods as possible. Allow customers to contact you by e-mail. Hyperlink the e-mail address so customers won't have to type it. Offer toll free numbers for phone and fax contacts. Some trucking companies have contact numbers written on their trucks so that the customers can be able to contact that particular company when they need their service. The organisation should invite customers to company meetings, luncheons, workshops or seminars in the meeting the manager can inform the customers about when the products will be available in the market because it is important to give customers more than they expect. Create special events for the customers like parties, barbecue's, dances etc. This will make them feel important when the company include them in regular business operations and special events (Larry Dotson, 2004) If a logistic team only concentrates on reducing freight cost, they could potentially lower customer service quality. Therefore, the goal of a logistics manager, or third party administrator, is to find a balance between cost and customer satisfaction. They must also be able to provide accurate tracking information, correctly estimate shipping cost, and be able to calculate delivery dates and times. By being organized, keeping cost low for the clients, and by making on time deliveries, freight management can help control the overall customer satisfaction of their clients. Reducing cost in freight transport is great, but if you can improve customer service at the same time, that’s even better. Logistics software can help reduce costs in freight transportation and logistics while improving customer service quality. (Barone, 2003) In the South African industry research shows that there should be plans to shift back to rail-freight and reduce that of road as the overall cost of damage to roads will eventually filter down in costs to the customer. Although currently there are greater cost savings and cost competition in using road freight. Measuring Customer Service. Measuring customer service in logistics for any organization is crucial to determine whether the organization is doing what the customers are expecting. The needs of the customers differ to a large extent and the reason being is not all customers are treated the same. Since the needs of the customers differ to a large extent, organizations end up knowing so little in general about the customers’ real requirements hence they end up setting the service levels that are too high and hence too costly (Ballou, 1978). The high service levels result also in higher distribution costs and therefore the overall price of a product. Even though the aim of any organization is to meet the needs of each and every customer, the organizations should however try to generalize about customer service as much as possible to drive down the costs. The problem that is encountered while trying to measure the customer service is what factors to measure exactly. There has always been a contradiction on whether the service levels should be determined by the customers or be set by the organizations. The firms normally select factors that are easier to measure such as order handling, order picking times whereas customers might be interested or concerned about the order transmittal and delivery which tend to be more difficult to measure. Therefore to determine those factors or aspects that the customers value the most, the organizations normally use the performance model (Murphy and Wood, 2004). The performance model is a questionnaire that the customers fill on receipt of their orders; its main objective is to determine the percentage of times the firm accomplishes specific goals and objectives. Managers normally set some visible goals against which performance can be measured. These come in two forms; standards and policy statements (Ballou, 1978). The managers might for example set a standard whereby the target is to ensure a 95% in-stock rate, filling customer orders within 24 hours of receipt or a one day order cycle time for all customers staying close to the organization. Against these standards managers can be able to tell if they are meeting and exceeding the customer service levels the organization had set. I should be further noted that it is inefficient and costly to provide more service than the customer expect or requires hence the firm should try to meet to break-even. Some companies take customer service seriously in a sense that they even have the written printed statements. The policy statements promise the customers that the company intends to act in a specified way with regard to service. There are five ways in which the organizations measure or test the customer service levels (Gwilliam M, 2008). Firstly, if the organization is able to fill the orders then it must be meeting the customers’ expectations. Normally the acceptable standard is the 95% fill rate whereby it is only 5% of the time when there is stock out. Secondly it is the delivery of the goods on time. It is vital to measure how fast the organization can deliver the products that have been ordered. If most of the time the goods are not delivered at the targeted date then major changes need to be done. Furthermore, it is important to measure how successfully the customers’ concerns can be resolved. Since the customers use the enquiries to express their concerns, the proportion of the number of customer enquiries that have been effectively resolved can be used as a means of measuring customer service given the number of enquiries that have been received. Another way to measure customer service can be how quick the organization responds to the customers’ mails, emails, and phone calls. If the organization is able to respond to the customers within 24 hrs than the level of customer service is up to standard. The last way of measuring the customer service in logistics is by letting the customer decide. The customers can let the organization know if it is fulfilling the needs of its customers. The customer surveys that focus on the customer service issues can be conducted and from the response of the customer surveys the organization can be able to improve on the areas that the customers are not happy with. Once the level of customer service is known it becomes easier to control it. When the level of customer service is below the standard the customers become dissatisfied, however if the level of customer service is above or exceed what the customers require it increases the costs of the organization. Control is therefore defined as a process of taking corrective action when measurement indicates that the goals or objectives of customer service are not being achieved. For example, if the delivery targeted dates are not met there might be a need of changing the mode of transport or simply the route being used. Firstly the service level standards are set, and then the actual is compared to the standard. If there is a variation then the corrective measures need to be done so that the standard is met. At times the reason why the standard is not met is because it was set too high that it cannot be matched, in this case the standard itself needs to be revised. Conclusion â€Å"The success of South Africa’s infrastructure growth challenges will be dependent on the ability of logistics infrastructure and, in particular, transportation, to cope with the demands placed on it. †(Engineering news, 2007). In the future the quality of customer service will be the main determining factor in the survival of a company as customers become more aware of product offerings that will suit them. The transportation industry in South Africa is changing, with greater emphasis being placed on the customer and their level of satisfaction. This will bring a greater move forward in the industry that will see South Africa competing on the world stage in terms of transportation. Customer service is vital to the survival of any company, organisation or industry and establishing and implementing customer service policies that work is what will lead organisations and industries to greater growth and success.