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Improving Customer Service Series – I – Measuring Availability

The core value of business success is adapting to customer requirements in a cost effective and efficient manner. Although it is accepted that customer service is important, many senior managers find it extremely difficult to explain what it is and how to do it. Customer service, from a logistical point of view, represents the role of a supplier in fulfilling the marketing concept. To improve customer service, it is essential to establish clear performance standards for each of the activities and measures related to those standards. In the basic customer service program, the focus is often on whether the supplier is able to provide the seven rights to its customers: the right amount of the right product at the right time in the right place in the right condition at the right price with the correct information. This concept also applies to the interlining industry.

To improve customer service, careful analysis of competitive performance and customer responsiveness is critical to the process of identifying the attributes in a basic service strategy. The fundamental attributes of the basic customer service were identified as availability, operational performance and reliability of the service. These attributes will be discussed in a series of articles in detail.

In this article, availability is discussed in detail. Availability is the ability to provide inventory when a customer needs it. The traditional practice for an interlining supplier for woven interlinings, nonwoven interlinings, and fusible interlinings is to stock inventory in advance of customer orders. An inventory storage strategy is typically based not only on forecast demand for products, but also on some differential storage policies for specific items, including an item’s profitability, popularity, importance, and value.

For a supplier of woven interlinings, nonwoven interlinings and fusible interlinings, achieving a high level of inventory availability requires a lot of planning. Availability performance is measured on three attributes, namely, out-of-stock frequency, fill rate, and completed orders shipped.

1. Frequency of stockouts.

A stock-out frequency occurs when a supplier does not have a product available to meet customer demand. Stock-out frequency refers to the probability that a stock-out will occur in a company with no inventory available to fulfill customer orders. The aggregation of all stock-outs of all products can serve as an indicator of a company’s performance in delivering a basic service commitment on product availability. Therefore, taking an interlining supplier for woven interlining, nonwoven interlining and fusible interlining for example, a good strategy must be applied to reduce the frequency of stock-outs.

2. Fill rate.

Fill rate measures the impact of stockouts over time. It is important to identify the units of a product that is not available for customer order. Fill rate performance is typically used to evaluate a specific item or customer, such as woven interlining, nonwoven interlining, and fusible interlining, or for any combination of business segments, such as products and customers. However, the fill rate may not always require 100% achievement. The customer can accept a new order for the short articles at a later time. The essentials of the fill rate strategy must take into account the customer’s requirements for the products.

3. Order shipped complete.

The completed order shipped is the most accurate measure of a supplier’s performance in terms of product availability. It covers everything in a customer order as an acceptable performance standard. An order will be recorded as zero for a full shipment if even the vendor was unable to provide an item on a customer’s order.

The three availability measures above help determine how well a supplier’s inventory strategy meets customer demand. They also serve as a basis for assessing the appropriate level of availability of the company’s products from a logistics perspective. Using information technology to identify customer demand in advance and applying forecasting theory, an interlining supplier for woven interlinings, nonwoven interlinings, and fusible interlinings achieved high levels of product availability basic service performance without a corresponding increase in inventory. . Understanding the measurement of product availability is the starting point for planning a great customer service strategy.

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