customer service & logistics filmco & walmart. components of customer service before...
TRANSCRIPT
![Page 1: Customer Service & Logistics Filmco & Walmart. Components of Customer Service Before Pre-Transaction Service During Transaction Service After Post-Transaction](https://reader030.vdocuments.us/reader030/viewer/2022012903/5697bfae1a28abf838c9c9c5/html5/thumbnails/1.jpg)
Customer Service & LogisticsFilmco & Walmart
![Page 2: Customer Service & Logistics Filmco & Walmart. Components of Customer Service Before Pre-Transaction Service During Transaction Service After Post-Transaction](https://reader030.vdocuments.us/reader030/viewer/2022012903/5697bfae1a28abf838c9c9c5/html5/thumbnails/2.jpg)
Components of Customer Service
• Before• Pre-Transaction Service
• During• Transaction Service
• After• Post-Transaction Service
![Page 3: Customer Service & Logistics Filmco & Walmart. Components of Customer Service Before Pre-Transaction Service During Transaction Service After Post-Transaction](https://reader030.vdocuments.us/reader030/viewer/2022012903/5697bfae1a28abf838c9c9c5/html5/thumbnails/3.jpg)
How does this relate to SCM?
• Deliver products to customers faster and with greater accuracy
• Track shipments to ensure they reach their destination safely
• Maintain optimal inventory levels
![Page 4: Customer Service & Logistics Filmco & Walmart. Components of Customer Service Before Pre-Transaction Service During Transaction Service After Post-Transaction](https://reader030.vdocuments.us/reader030/viewer/2022012903/5697bfae1a28abf838c9c9c5/html5/thumbnails/4.jpg)
Consequence of bad Customer Service
Loss of current customers
Loss of potential customers
Loss of reputation
Loss of profits
![Page 5: Customer Service & Logistics Filmco & Walmart. Components of Customer Service Before Pre-Transaction Service During Transaction Service After Post-Transaction](https://reader030.vdocuments.us/reader030/viewer/2022012903/5697bfae1a28abf838c9c9c5/html5/thumbnails/5.jpg)
Impact of Logistics Management on Return on Investment (ROI)
Logistics Management to improve Sources of Profit:
Sources of Profit Logistics Management
Sales Revenue Good customer service
Reduced Costs Logistics efficiency
![Page 6: Customer Service & Logistics Filmco & Walmart. Components of Customer Service Before Pre-Transaction Service During Transaction Service After Post-Transaction](https://reader030.vdocuments.us/reader030/viewer/2022012903/5697bfae1a28abf838c9c9c5/html5/thumbnails/6.jpg)
Logistics Management for efficient capital employment:
Capital Employed Logistics Management
Cash Cash-to-cash Cycle time
Debtors/Creditors Debt collection, early payment discount. Closer integration of deliveries to demand
Inventory Just-in-time logistics
Fixed Assets Asset utilization
![Page 7: Customer Service & Logistics Filmco & Walmart. Components of Customer Service Before Pre-Transaction Service During Transaction Service After Post-Transaction](https://reader030.vdocuments.us/reader030/viewer/2022012903/5697bfae1a28abf838c9c9c5/html5/thumbnails/7.jpg)
Impact of Logistics Management on return on Shareholder Value
• Shareholder value is a key component in measuring corporate performance.
• It is the sum of all strategic decisions that affect the firm’s ability to efficiently increase the amount of free cash flow over time.
• Market Value Added (MVA) can be used to measure shareholder value,
MVA = (Share price * No. of issued shares) minus book value of capital added
![Page 8: Customer Service & Logistics Filmco & Walmart. Components of Customer Service Before Pre-Transaction Service During Transaction Service After Post-Transaction](https://reader030.vdocuments.us/reader030/viewer/2022012903/5697bfae1a28abf838c9c9c5/html5/thumbnails/8.jpg)
The five basic drivers of enhanced shareholder value are:
![Page 9: Customer Service & Logistics Filmco & Walmart. Components of Customer Service Before Pre-Transaction Service During Transaction Service After Post-Transaction](https://reader030.vdocuments.us/reader030/viewer/2022012903/5697bfae1a28abf838c9c9c5/html5/thumbnails/9.jpg)
Revenue Growth• Impacts of logistics
service on volume and customer retention.
• Superior logistics service on customers’ loyalty.
• Satisfied customers bring more customers.
![Page 10: Customer Service & Logistics Filmco & Walmart. Components of Customer Service Before Pre-Transaction Service During Transaction Service After Post-Transaction](https://reader030.vdocuments.us/reader030/viewer/2022012903/5697bfae1a28abf838c9c9c5/html5/thumbnails/10.jpg)
Tax Minimisation• Organisations have choices as to where they can locate their
assets and activities.
• Tax regimes are different country by country.
• Property tax and excise duty on fuel.
• Supply chain decisions can significantly affect the total tax bill and hence shareholder value.
![Page 11: Customer Service & Logistics Filmco & Walmart. Components of Customer Service Before Pre-Transaction Service During Transaction Service After Post-Transaction](https://reader030.vdocuments.us/reader030/viewer/2022012903/5697bfae1a28abf838c9c9c5/html5/thumbnails/11.jpg)
Operating Cost Reduction
• potential for operating cost reduction.
• Large proportion of costs are driven by logistics decisions and the quality of supply chain relationships.
• A total pipeline view of costs on a true ‘end-to-end’ basis should be taken.
![Page 12: Customer Service & Logistics Filmco & Walmart. Components of Customer Service Before Pre-Transaction Service During Transaction Service After Post-Transaction](https://reader030.vdocuments.us/reader030/viewer/2022012903/5697bfae1a28abf838c9c9c5/html5/thumbnails/12.jpg)
Working Capital Efficiency
• Supply chain strategy and logistics management linked to the working capital requirement.
• Long pipelines by definition generate more inventory; .
![Page 13: Customer Service & Logistics Filmco & Walmart. Components of Customer Service Before Pre-Transaction Service During Transaction Service After Post-Transaction](https://reader030.vdocuments.us/reader030/viewer/2022012903/5697bfae1a28abf838c9c9c5/html5/thumbnails/13.jpg)
Walmart and K-Mart
![Page 14: Customer Service & Logistics Filmco & Walmart. Components of Customer Service Before Pre-Transaction Service During Transaction Service After Post-Transaction](https://reader030.vdocuments.us/reader030/viewer/2022012903/5697bfae1a28abf838c9c9c5/html5/thumbnails/14.jpg)
Why have Walmart been successful?
• Aggressive IT investment over time: • Adopting technology early.• Spending less per sales dollar getting goods to stores than its
competitors.• Improving inventory management
• Use of EDI with suppliers to improve coordination• Exploiting economies of scale• Aggressive overall investment in supply chain• $4bn in themselves and $40bn suppliers
• High customer satisfaction:• Ability to consistently meet customer demand through use of
technology and high on shelf availability.
![Page 15: Customer Service & Logistics Filmco & Walmart. Components of Customer Service Before Pre-Transaction Service During Transaction Service After Post-Transaction](https://reader030.vdocuments.us/reader030/viewer/2022012903/5697bfae1a28abf838c9c9c5/html5/thumbnails/15.jpg)
SWOT
StrengthsMarket leader – largest retailer in the worldLow cost products for customersGood information sharing with suppliersGood use of IT for tracking inventory
WeaknessesBig box retailer – low penetration in urban areasLow cost market sector – not appealing to all customers who want quality
OpportunitiesEmerging marketsFurther investment into new technologyFurther growth in online retailing – using existing knowledge and supplier ties
ThreatsWage warsVolatility in commodity pricesEthical issues in the supply chain
![Page 16: Customer Service & Logistics Filmco & Walmart. Components of Customer Service Before Pre-Transaction Service During Transaction Service After Post-Transaction](https://reader030.vdocuments.us/reader030/viewer/2022012903/5697bfae1a28abf838c9c9c5/html5/thumbnails/16.jpg)
Direct Product Profitability (DPP)
![Page 17: Customer Service & Logistics Filmco & Walmart. Components of Customer Service Before Pre-Transaction Service During Transaction Service After Post-Transaction](https://reader030.vdocuments.us/reader030/viewer/2022012903/5697bfae1a28abf838c9c9c5/html5/thumbnails/17.jpg)
Direct Product Profitability
• Accurate measure of the contribution of each product to profit
• Other costs involved other than purchase price
• These can be hidden and substantial
• Sales -Manufacturing -Storage -Transport -Retail (stocking/front end labour)
![Page 18: Customer Service & Logistics Filmco & Walmart. Components of Customer Service Before Pre-Transaction Service During Transaction Service After Post-Transaction](https://reader030.vdocuments.us/reader030/viewer/2022012903/5697bfae1a28abf838c9c9c5/html5/thumbnails/18.jpg)
Filmco DPP
Customer P Q R
DPP 19.6% 23.1% 33%
![Page 19: Customer Service & Logistics Filmco & Walmart. Components of Customer Service Before Pre-Transaction Service During Transaction Service After Post-Transaction](https://reader030.vdocuments.us/reader030/viewer/2022012903/5697bfae1a28abf838c9c9c5/html5/thumbnails/19.jpg)
Why is R’s DPP So Much Higher?
• R could be buying in bulk
• R could receive direct delivery- cutting out warehouse
• R could be ordering more frequently than P
![Page 20: Customer Service & Logistics Filmco & Walmart. Components of Customer Service Before Pre-Transaction Service During Transaction Service After Post-Transaction](https://reader030.vdocuments.us/reader030/viewer/2022012903/5697bfae1a28abf838c9c9c5/html5/thumbnails/20.jpg)
Customer P’s DPP
Film Type
A B
Customer P
Orders1 2 3 4
DPP 8.4% 21.6% 31.2% 30.3%
Why is Order 1’s DPP so different to the rest?
![Page 21: Customer Service & Logistics Filmco & Walmart. Components of Customer Service Before Pre-Transaction Service During Transaction Service After Post-Transaction](https://reader030.vdocuments.us/reader030/viewer/2022012903/5697bfae1a28abf838c9c9c5/html5/thumbnails/21.jpg)
Why do the orders have such different DPP’s?
• Just considering manufacturing costs…
• e.g. Film A – Order 1
• Profit a-c / c = 1210 -876 / 1210 = 27.6%
• Film B – Order 3
• Profit a-c/c = 13000-8402 / 13000 = 35.3%
• Not that different- manufacturing costs are insufficient to calculate profit contribution
![Page 22: Customer Service & Logistics Filmco & Walmart. Components of Customer Service Before Pre-Transaction Service During Transaction Service After Post-Transaction](https://reader030.vdocuments.us/reader030/viewer/2022012903/5697bfae1a28abf838c9c9c5/html5/thumbnails/22.jpg)
Why do the orders have such different DPP’s?
• There is likely semi-fixed costs eg. transport
• Film A - Order 1
• Transport cost / order weight = 79/482 = £0.16 / tonne for transport
• Film B - Order 3
• Transport costs / order weight = 343/4538 = £0.07 / tonne for transport
• This is a significant difference, and is one explanation for the large difference in DPP.
![Page 23: Customer Service & Logistics Filmco & Walmart. Components of Customer Service Before Pre-Transaction Service During Transaction Service After Post-Transaction](https://reader030.vdocuments.us/reader030/viewer/2022012903/5697bfae1a28abf838c9c9c5/html5/thumbnails/23.jpg)
How can Filmco overcome this?
• Increase the order sizes from their customers (bulk-buying discounts / MOQ’s)
• Improve relationships with Customer P
• Investigate ways of reducing costs for lower weight orders
• Reducing some of the NVA costs ( storage and opportunity costs)
• Film B is uncoated and the DPP is much higher – could they outsource the coating or stop coating film altogether.