1. Fixed capital efficiency
2. 1. Identify the key components of customer service as seen by customers themselves. 2. Establish the relative importance of those service components to customers. 3. Identify ‘clusters’ according to similarity of service preferences.
3. 20% of customers buying 20% of the products = 4% of all customer/product transactions
3.1. Which provides: 80% of 80% of total profit = 64%
3.1.1. Just 4 per cent of transactions (measured order line by order line) gives us 64 per cent of all our profit!
4. · Order cycle time · Stock availability · Order-size constraints · Ordering convenience · Frequency of delivery · Delivery reliability · Documentation quality · Claims procedure · Order completeness · Technical support · Order status information
5. Net operating income less Taxes less Working capital investment less Fixed capital investment = After-tax free cash flow
6. Is a true measure of what the business is worth to its shareholders
7. The bottom line determines the direction of the company and in some cases this has led to a limiting, and potentially dangerous, focus on the short term
8. Are generally supportive of the product while in use (Product warranty, parts and repair service, procedures for customer complaints and product replacement).
9. Customer Value
9.1. Perceptions of benefits –––––––––––––––––––––––– Total cost of ownership
9.2. Total cost of ownership: -Management -Operating -Inventory -Technical -Training -Etc
9.3. Quality Service Cost Time
9.3.1. Are you competitive?
10. Customer Service
10.1. Pre-transactions elements
10.1.1. Are relate to corporate policies or programmes
10.2. Transaction elements
10.2.1. Are those customer service variables directly involved in performing the physical distribution function
10.3. Post-transaction elements
11. Out-of-Stock
11.1. Having what you need every single time, so the consumer won't substitute the product
12. Customer service and customer retention
12.1. Service surround
12.2. How many of the customers that we had "x" months ago do we still have today?
12.2.1. An existing customer can provide a higher profit contribution and has the potential to grow in terms of the value and frequency of purchases than a new customer.
12.2.1.1. Lifetime value
12.2.1.1.1. If customers can be persuaded to remain loyal to a supplier, their lifetime value can be significantly increased.
12.2.2. In addition to the core product, these characteristics enter into the final value: • Quality • Product features • Technology • Durability, etc. • Delivery lead time and flexibility • Delivery reliability and consistency • Order fill • Ease of doing business • After-sales support, etc.
12.2.2.1. Average transaction value × Yearly frequency of purchase × Customer ‘life expectancy
13. Market-driven supply chains
13.1. Low-cost producer
13.2. Customer-centric
13.2.1. Design the supply chain around the needs of the customer
13.2.1.1. This new perspective sees the consumer at the start of the supply chain
13.3. Linking customer value to supply chain strategy
13.3.1. Identify value segments
13.3.1.1. What do our customers value?
13.3.1.1.1. Needs vs Wants
13.3.2. Define the value proposition
13.3.2.1. How do we translate these requirements into an offer?
13.3.3. Identify the market winners
13.3.3.1. What does it take to succeed in this market?
13.3.4. Develop the supply chain strategy
13.3.4.1. How do we deliver against this proposition?
14. Customer service priorities
14.1. The ‘Pareto’ or 80/20 rule
14.1.1. The top 20% of products and customers by profitability are the ‘A’ category; the next 50% are labelled ‘B’; and the final 30% are category ‘C’.
14.2. Managing product service levels
14.2.1. Seek cost reduction
14.2.2. Provide high availability
14.2.3. Review
14.2.4. Centralised inventory
15. Service standards
16. Logistics and the bottom line
16.1. ROI = Profit ––––––––––––––––––– Capital employed
16.2. Logistics and shareholder value
16.2.1. what is the company worth to its owners?
16.2.2. Shareholder is determined by the net present value of future cash flows.
16.2.3. Economic Value Added (EVA)
16.2.3.1. Is the difference between operating income after taxes less the true cost of capital employed to generate those profits
16.2.4. Market Value Added (MVA)
16.3. The drivers of shareholder value
16.3.1. Revenue growth
16.3.2. Operating cost reduction
16.3.3. Working capital efficiency
16.3.4. Tax minimisation