2.4.26 Striving for Logistics Customer Service

Striving for the best logistics customer service. The goal of your logistics network is to make sure your customers are happy, and you keep them happy by keeping your promises to them. So for example, if you tell your customer you will buy a product from me and two days later, it will be at your door step, you should make it happen.
Now, the way to make it happen is to make sure you have built the logistics network that can accomplish that and that is not by accident.
In order to provide your customers with that top logistics customer service, you can have no stock-outs and you should have the lead time that you advertise, two concepts I will discuss next. Lead time is one of the most metrics and logistics, it’s measured from the time of order submission to the time of order receipt. And we want it to be short, as short as possible but we also do not want it to vary at all because we cannot plan for variability.
An example of that would be if you’re shipping parts to a car manufacturer and that line is moving, if your part is delayed and they cannot build their cars, the cost of waiting for a part is astronomical.
So you want to avoid any delays in your lead times as much as possible. An equally important metric is fill rate, which is defined as the percentage or orders that is shipped from inventory.
Lead time will be affected by the fill rate because if you don’t have the item in inventory, you will not be able to meet your aggressive lead time. Therefore we need to maintain enough inventory to ensure our fill rate is as high as possible and we don’t have any stock-outs. Ultimately, the overall goal of logistics is to deliver the right product, at the right price, to the right customer, at the right place, at the right time, in the right quantity, in the right condition. Those are known as the seven Rs of logistics, companies are striving to achieve the seven Rs, but there’s a wrinkle. Not every item that they sell is equally important. So, for example, we have different SKUs, known as stock keeping units, and some sell a lot, others sell a lot less.
In general, for most companies, there are a few products that sell the most, also known as our A items. While we have B items and C items, and there are lots of them, they are not as critically important to our success because we don’t make as much money on them. Our A items is where we need our best fill rate and our lowest lead time. And then, the other items, we can reduce cost while offering lower levels of service. And that is how most companies achieve low cost in logistics while maximizing their service levels when it matters.

Jim Rohn Sứ mệnh khởi nghiệp