Logistics

Impact of logistics on customer satisfaction

Introduction:

The term logistics is often misinterpreted to mean transportation. In fact, the scope of logistics goes well beyond transportation. Logistics forms the system that ensures the delivery of the product in the entire supply pipeline. This includes transportation, packaging, storage and handling methods, and information flow. The impact of logistics in the ability of a company to satisfy its customers cannot be overstated. All other efforts at modernization within a company would not bear fruit until the logistics system is carefully designed to facilitate the smooth and efficient flow of goods in the system.

The Value of Logistics:

Material handling and storage are typically labelled as "non-value adding" activities. While one can appreciate the motivation behind such labeling as one directed towards waste reduction, it can lead to is an erroneous assumption that all material handling and storage can be avoided. While manufacturing processes provide "form utility", logistics related activities provide "time and place" utility to a product. The challenge is to provide the time and place utility at a competitive cost. If a company can achieve this goal, it will gain a significant competitive advantage in the marketplace.

The interface of logistics to customer satisfaction:

Customer satisfaction is fundamental to business. The degree to which customers are satisfied determines whether customers make additional purchases and recommend the company and its products to others. Improving the quality of logistics service is particularly important because it increases customer satisfaction, which in turn heightens the occurrence of strategic partnering and corporate profitability. Unfortunately, an A.T. Kearney logistics study indicates that only about 10 percent of companies are capable of totally satisfying their customers. The marketing literature has focused on customer satisfaction with regard to...