When it comes to customer service, shippers want their carriers and 3PLs to provide the complete package.
In today’s complex supply chain environment, customer service between shippers and their logistics providers means more than just a friendly voice on the line when something goes wrong. It is more than the ability to track a shipment or expedite a delivery. Today, shippers expect their logistics providers to take a “cradle-to-grave” approach to customer service, providing insight, strategic guidance, and a wide range of capabilities from the very beginning to the very end of the supply chain. From transportation of inbound raw materials to vendor management to outbound deliveries and everything in between, shippers depend on their providers to execute flawlessly, while acting as an extension of their company.
Automotive parts and service chain Pep Boys, for example, sets high customer service standards for Agility, its global third-party logistics (3PL) provider. “We expect Agility to be on top of each part of our supply chain, every day,” says Joshua J. Dolan, director of global logistics and U.S. customs compliance for Pep Boys. “We depend on them for cradle-to-grave management.”
To meet these types of expectations, logistics providers must take the time to truly understand their shippers’ supply chains, to know the complexities of the industries they function in, to design their functionalities around desired outcomes, and to determine how to ease their customers’ customers’ pain points. It is a big job, and one that is likely to get bigger.
“With so much change in the supply chain environment, shippers increasingly need logistics providers to better support their businesses going forward,” says Dr. C. John Langley, author of the 2010 3PL Report, conducted in conjunction with Cap Gemini, which examines the global market for 3PL services. “Operational effectiveness has always been imperative, but it is underscored now because shippers are trying to run leaner and meaner without compromising service to their own customers.”
STEPPING UP THE GAME
3PLs and carriers are responding to increased shipper demands by stepping up their games, pushing customer service to the forefront. Many providers have adopted service-centric cultures to ensure they meet shippers’ service requirements— and to gain a competitive advantage in the crowded outsourced logistics and transportation field.
“From our drivers all the way up to our CEO, service is the culture at C.R. England,” says Mike Tucker, general manager, Chicago Regional, for refrigerated trucking company C.R. England. “When new drivers join our regional fleet, the importance of customer service is the second thing we talk about— after safety— because if we don’t satisfy customers, we don’t stay in business.”
At C.H. Robinson, an Eden Prairie, Minn.-based 3PL, employees are “asked each day to develop a thorough understanding of customer expectations so we can deliver unique solutions,” says Jim Butts, senior vice president, C.H. Robinson. “It’s only when we truly understand our customers’ needs that we can develop a plan, based on our technology and experience, to help them achieve a competitive advantage.”
SERVICE GETS STRATEGIC
Shippers are also turning to logistics providers for a wider range of services, and expect results on all fronts. Vendor management, inbound and outbound transportation, contingency planning, network design and optimization, and the technology systems to manage it all— these types of strategic services are being outsourced more regularly.
“Shippers are becoming more aware of ways in which providers can help them strategically,” says Langley.
One major factor in fostering satisfactory customer service is building the right shipper/provider relationship. Shippers that take a strategic and collaborative approach to logistics outsourcing— rather than viewing it as a commodity play— often form more effective partnerships, leading to improved customer service throughout the supply chain, Langley notes.
“Working closely with providers facilitates service improvements because it helps them gain detailed knowledge of shipper requirements,” he explains. “It also makes it easier for providers to determine what issues are most important to their customers.”
Keeping providers abreast of major business changes, for example, can help minimize service disruptions.
“Customers working collaboratively with us let us know when they are considering an acquisition or opening a new distribution center,” explains George Abernathy, executive vice president and COO of Transplace, a logistics and technology provider based in Dallas, Texas. “Having that information in advance allows us to determine what the changes will mean to their network and what we need to alter to continue serving them effectively.”
To truly emphasize its focus on collaborative customer service, Transplace maintains a Customer Advisory Board made up of a rotating group of about 15 customers. The goal is to facilitate discussion and brainstorm about service and technology improvements that can help Transplace better serve the shippers it works with.
“At our last meeting, for instance, we shared next year’s technology development calendar and asked the board for feedback and suggestions,” says Abernathy.
Customer Advisory Board President Craig Boroughf, director of transportation for USG Corporation, sees the board as a way to “keep abreast of where Transplace is investing technology and innovation resources so we can determine if those plans match our service needs and business requirements.”
Another key aspect of serving shippers strategically and collaboratively is making sure to always operate with customers’ customers in mind. Because supply chains are interconnected at every level, bad service at one link will ricochet throughout the chain, ultimately impacting the end user.
“It is imperative that we understand what our customers’ customers are looking for in order to align our services, processes, and people to those goals,” Abernathy explains. “Determining our customers’ customers’ needs is our first priority, whether we are prospecting for potential customers, designing solutions for new customers, or reviewing goals with existing customers.”
C.H. Robinson’s Butts likens the idea of serving the customer’s customer to a “neighborhood watch,” logistics-style. “A big part of our role is to prevent bad things from happening,” he says. “Establishing and monitoring the correct performance metrics, reporting and analyzing to identify root causes, then taking corrective action allows providers to have a positive impact throughout a customer’s supply chain. In turn, the customer is able to make better decisions in other areas.”
Butts cites the reporting that C.H. Robinson provides on inbound vendor management as an example. “Shippers can use that information to help eliminate inefficiencies in the transportation process, which can help reduce their costs and, potentially, the costs to their customers,” he says.
Eliminating inefficiencies, reducing costs, and improving service to your customer’s customer are what cradle-to-grave customer service is all about.
Title: 3PL ( third-paty logistic )provider
In this post I want to analayze the topic of demand management in logistic, with a special care about customer service and service level agreement between companies.
The starting point to do this is an article posted on the website ‘inboundlogistic.com’, which deals with the relationship between shipping company and their external logistic provider (so called 3PL, third party logistic).
So, in this case it’s not taken into account the last-mile of the market, that involves the company and the final costumer, but one step before: the relationship between shipping companies and their customers, which could be both manufacturing companies and retailers.
Many companies think that their only contact with the customer is through the sales and marketing staff, but this is no longer the case. The customer interacts through other departments such as shipping, quality control, accounts receivable or a repairs service.
The key area on which you must work to maintain a required service level and meet customer satisfaction is logistic.
But exactly like manufacturers want to create a product that best meets final customers’needs, so also shipping and transportation companies want to satisfy to the best their ‘business-to-business’ clients.
From the many witnesses contained in this article, you see which is the prevailing strategy to succed in this purpose: SLA between 3PL ( logistic providers) and shipping company, which means service level agreement among the parties.
But why is it necessary such a strong connection? Why a company should share informations about its tecnologies, its strategies and so on? In other words, why do companies need to have integration of process?
The answer can be given analyzing, on one side, the characteristics of the actual market, and on the other side, what customers (every customer along the chain) expect.
The issues that manufacturing and hence shipping companies have to face are multiple:
– ever-changing environment
⁃ converging technologies
– shortening product life-cycle
– promotional activities
All these factors contribute to create pressure on a firm; as consequence, the logistic system that supports the interaction with market needs to be designed with a high flexibility.
What’s more, the high number of products that are sobstitutes gives customers an increased purchasing power: they expect reliability, responsiveness, easy ordering, capacity, fast delivering service and much more from companies.
So, again, these tasks can’t be satisfied only by a well-trained sales and marketing department, but need to be founded on the more solid bases of a logistic system; this must be developed to ensure speed, the possibility to maintain a certain stock level, to recover from a mistake.
Said this, it’s easy to understand the thought of the author of the 3PL report, Dr. John Langley, who states: “Shippers are becoming more aware of ways in which providers can help them strategically,”
Since logistic is becoming more and more a source of competitive advantage for a company, many oh them have understood the advantages deriving from outsoucing it to a professional provider (like DHL for example, or those mentioned in the article like Agility and Transplace);
basing on a common view focused on customer satisfaction, they ‘must take the time to truly understand their shippers’ supply chains, to know the complexities of the industries they function in, to design their functionalities around desired outcomes, and to determine how to ease their customers’ customers’ pain points’.
By: Matteo Maccarana