The Importance of Customer Service in Supply Chain Management

Imagine: You’ve ordered a widget. The seller provided a delivery date, but when it came around, your widget didn’t. Maybe it arrived just a day late – or maybe not all.

You’ve just experienced a supply-chain disruption, and to one degree or another, it turned you from a proven buyer into a dissatisfied customer.

Now imagine you are a supply-chain manager of a business of any size, from a mom and pop grocery to a global enterprise. It has suppliers upstream in its supply chain and customers downstream. A disruption on either side of your business felt by the customer can negatively impact relationships, bottom lines and your career.

That is why smart companies consider their supply chain such a critical factor in their customer satisfaction model that shapes their supply chain and logistics around their customers’ needs, wants and expectations.

Supply Chain Managers Make Customer Service a Priority

A strong and durable supply chain that supports an enterprise’s overall business model is “designed from the customer in,” Constantine Vassiliadis and Glen Goldbach wrote in Resilience: A Journal of Strategy and Risk.

Vassiliadis, a process systems engineer and supply-chain optimization consultant, and Goldbach, an authority in demand planning, transportation and logistics services, went on to say, “The supply chain is the instrument through which your organisation [sic] delivers its customer value proposition to the market.

“In this light, supply chain resilience is ultimately the ability of a supply chain to recover from or be prepared for a shock of a disruption or change so that it continues to deliver on the leading dimension of your customer value proposition,” the authors wrote.

Managing Supply Chains With the Customer In Mind

Advanced degrees in supply chain management cover the Supply Chain Operations Reference (SCOR) manual, the profession’s practices guide, and key processes within it for maintaining, evaluating and optimizing processes.

Among those processes is the source-make-deliver model, which includes methods for ordering and acquiring materials and services (your company as customer) and making and delivering products and services to the market (your company as maker and deliverer).

Customer Service and Supply Chain Management Are Inherently Related

Though they are distinct but intrinsically related processes, the terms “logistics” and “supply chains” are often used interchangeably. There is growing awareness and emphasis on their relationship in customer service operations.

The impact of companies’ dual role as customers and suppliers is noted in this excerpt from Logistics Transportation Systems by Bowling Green State professor MD Sarder: Supply chain “shippers expect their logistics providers to take a ‘cradle-to-grave’ approach to customer service.”

Players in today’s global economy will want to keep the customer front and center. “Customer service will influence many decisions in logistics and require much analysis for optimum performance,” concluded Dr. Sarder, who specializes in logistics, transportation and supply chain modeling and analysis.

Vassiliadis and Goldbach noted that global supply chains are so complex that making them bulletproof is impossible. However, customer service KPIs of companies that plan for disruptions suffer considerably less than enterprises that do not have contingency strategies.

Learn more about Bowling Green State University’s online MBA program with a Concentration in Supply Chain Management.

Sources: What Is SCOR? A Model for Improving Supply Chain Management

Elsevier: Logistics Transportation Systems

National Center for Biotechnology Information: Logistics Customer Services (excerpted online by the U.S. National Library of Medicine)

PWC: Resilience – A Journal of Strategy and Risk: How the Strongest Supply Chains Protect What Customers Cherish Most

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