Matching logistics to customer needs is a key challenge and opportunity for logistics managers. It involves aligning the supply chain strategy and design with the expectations and requirements of the customers, both internal and external. In this article, we will explore some of the factors and steps involved in this process.
The first step is to identify and segment your customers based on their needs, preferences, and behaviors. This will help you to tailor your logistics services and solutions to different customer groups and segments. For example, you can segment your customers by order size, frequency, delivery speed, service level, location, industry, or any other relevant criteria. Customer segmentation will also help you to prioritize your resources and investments, as well as to measure and improve your performance.
Every customer is unique and it is very important to understand your customers business and the products they move to enable you tailor a solution to meet their needs. For example I have a client who imports fresh foods which must be cleared few hours after arrival.
Most important thing is to see logistics as an asset and not a problem. In the end of the day the logistic part is where the money is. It’s your stock that allows you to provide for your customers. The bigger place the logistics planning and the more people that are involved or at least interested in the logistics chain the better. Logistics is also where companies can save the most money. Changing stock, reviewing freights, packaging etc. so more logistics manager should be more active in chasing savings.
Being able to segment out based on customers needs in my experience weights the wisdom of cognitive empathy to leverage logic and emotion to gain intel that will help with supporting the allocation resources for impact. Strategic mastery in tactical execution. Communication is vital and utilizing data and voiced insights the segmentation can be implemented, monitored and then adjusted based on the growing or decreasing needs.
Customer segmentation is a great way to better align the your customers with the services that will best help them. However, I urge caution is trying to place customers into your perceived segments and then placing them in automated workflows. Everyone is looking for ways to streamline and automate work, but it's a mistake to take the personal element out of the relationship. Get to know your customer but forging a relationship. Use this tags to serve them better, not to just funnel them into workflows that you hope will lead to organic growth. Make sure the customer's best interest is at the heart of everything you do.
off course, as all confirm listen to customer needs - as in present terminology, do proper Voice of Customer (VoC) sessions. Categorize results into Pain Points, Good to Have's & Whatever works well. Work on the pain points & good to Have's always keeping in mind that all are subject to change & may need to be again revisited at a later date. Share all findings / results with your customers
The next step is to define and offer a portfolio of logistics services that match the needs and expectations of your customer segments. This means that you have to balance the trade-offs between cost, quality, and flexibility of your logistics operations. For example, you can offer different delivery options, such as standard, express, or premium, with different prices and service levels. You can also offer value-added services, such as packaging, labeling, or customization, that enhance your customer satisfaction and loyalty.
1) Listen and understand customer needs 2) identify customer main customer currеnt pain point and make sure you solve it. 3) formulate a proposition focused on customer business (take out all non needed services not relevant to each case) 4) Make sure you master your pitch??
I’d say, keep it simple. What are the criteria’s? Do we need value added services or not? Is it a want or a must? Not all buyers or vendors have critical freight demands, so therefore it’s important to pinpoint your company needs and not use for example Time slot delivery with notification services if there is no need for it.
Don't only listen to their stated needs. Understand their whole process including the flow of goods, money and data. Sometimes you can solve a problem that the customer does not even know is 'solve-able'.
Collaborate with your customers and service providers and create an environment that allow a win-win-win situation. Identify the pain points and implement a solution that is beneficial for all involved partners.
Transportation Solutions: Provide options for various transportation modes (air, sea, land) to accommodate different delivery timelines and cost considerations. Offer expedited shipping for time-sensitive goods. Warehousing and Inventory Management: Offer flexible warehousing solutions, including both short-term storage and long-term distribution centers. Implement inventory management systems that enable real-time tracking and visibility. Supply Chain Visibility: Offer tracking and tracing capabilities so that customers can monitor the status of their shipments in real Customer Support: Offer responsive customer support to address inquiries, resolve issues, and provide updates on shipments.
The third step is to design and optimize your logistics network to deliver your logistics services efficiently and effectively. This involves deciding on the number, location, and capacity of your logistics facilities, such as warehouses, distribution centers, or cross-docks. It also involves choosing the best transportation modes, routes, and carriers to move your goods from the source to the destination. You have to consider various factors, such as demand patterns, inventory levels, lead times, costs, risks, and sustainability, when designing your logistics network.
Also is an ongoing process, as customer demands and market conditions change over time. Periodic review and adjustment of the network design are necessary to ensure optimal performance and competitiveness.
There is a fundamental saying within the area of logistics: "never fail on equipment". That comes not towards the physical means of supply chain only, but also towards the software: strategic partnerships, cooperation agreements - network in general. To initiate the process the trust is needed, and the key of success is a mutual trust built from the track of performance over the years and the care for what we do.
à cette étape, il est utile d'intégrer la notion de Mutualisation. On peut mutualiser des entrep?ts, des transports, des livraisons, ...
Optimize transport, warehousing, as well as circulation to boost effectiveness lower prices as well as fulfill consumer needs in logistics network style.
Logistics network design is the process of planning and optimizing the flow of goods and services from the source to the customer. It involves decisions such as where to locate facilities, how to allocate resources, how to route transportation, and how to balance costs and service levels. To match logistics to customer needs, one must consider factors such as demand patterns, delivery requirements, product characteristics, and customer preferences. A well-designed logistics network can enhance customer satisfaction, reduce operational expenses, and improve environmental performance.
The fourth step is to measure and monitor your logistics performance and customer satisfaction. This means that you have to establish and track key performance indicators (KPIs) that reflect your logistics objectives and customer expectations. For example, you can measure your logistics efficiency, quality, reliability, responsiveness, or agility. You can also collect and analyze customer feedback, such as surveys, ratings, reviews, or complaints, to identify and address any gaps or issues in your logistics service delivery.
Expressing ourself only with logistics KPIs or OKR will create distance between operations and commerciality. We shouldn’t forget that logistic process is a toll to deliver a clear result, GOODS IN THE CUSTOMER HANDS AT LOWEST COST AS POSSIBLE. But if expenses are coming and as a result you can get a better commerciality and higher NPS why not? I believe it always worth to add sales benefit in ROI calculations.
Measuring and monitoring logistics performance and customer satisfaction is crucial for success. By establishing and tracking KPIs aligned with objectives and expectations, you can measure efficiency, quality, reliability, responsiveness, and agility. Analyzing customer feedback helps identify and address any service gaps. It's a proactive approach to continuously improve logistics service delivery.
We can measure on the below lagging indicators of logistics 1.On-time-delivery time metric is key performance indicator.this should always be 100% 2.Delivery order completion rate.The rate at which customers accepted the goods and services.
performance measurement should align with an organization's overall business objectives and industry-specific requirements. KPIs may vary based on the nature of the business, products, markets served, and customer expectations. Regular monitoring, analysis, and reporting of logistics performance indicators enable organizations to make data-driven decisions, identify areas for improvement, and implement continuous improvement initiatives. This leads to enhanced operational efficiency, customer satisfaction, and profitability.
Regresando al concepto principal "lo que no se mide, no se mejora" hay que establecer los KPI′s necesarios para entender la eficiencia de la operacion logistica, los que pueden variar o aplicar de acuerdo al giro de negocio o necesidad del mercado.
The final step is to continuously improve your logistics processes and practices to match your customer needs and expectations. This means that you have to review and evaluate your logistics performance and customer satisfaction regularly and systematically. You also have to identify and implement improvement opportunities and initiatives, such as process redesign, technology adoption, innovation, or collaboration. You have to involve and communicate with your customers, suppliers, and other stakeholders in your improvement efforts.
Matching logistics to customer needs is not a one-time or static task. It is a dynamic and ongoing process that requires constant adaptation and alignment. By following these steps, you can achieve a competitive advantage and create value for your customers and your organization.
When we talk about services, it importatin to consider OKR sa well as KPI. Do not forget when your outcome is service its hard for client to find out your value and also compare your service with another ones. Accordingly, customer satisfaction is the one of the main metrics. Its not about delivery time or order prefection cause ultimately there will be an end point for this kind of metrics(you cant deliver order sooner than scheduled cause thats make your client angry:) )
"Continuous improvement is possible when continuous evaluation occurs. After every transaction, a few key questions should be asked to facilitate this improvement. Some standard questions include: What was the committed timeline, and how much time was actually taken to deliver the cargo? If the cargo was delayed, what were the top three reasons, and how can we improve? In case of delay, which customer-side processes contributed to the delay? In case of delay, which of our processes contributed to the delay? If we delivered the cargo on time, which processes were most helpful? If improvement is needed, which processes should be changed? What learnings can be shared with the customer and other stakeholders?"
By analyzing data and feedback, you can continuously refine your logistics strategies to better align with the diverse needs of your customer segments.
This is my favorite one... never stop improving. There is also room for improvement. The improvements you make will reflect on the service that you are able to provide to your customers. Lastly, keep in constant communication with your customers good or bad. Everyone loves a success story!
It is highly important to continuously receive the customer feedback in order to ensure that the services are maintained within and further exceeding the customer expectations. Having regular joint particular project related meetings or educational seminars where the customer learn more about specifics of the services with the aim for further improvement and mutual benefit - can be a solid way to validate the metrics of performance measurement.
How important the drivers (operator) are? they are the real logistics customer... We need to keep them safe, comfort and happy. If they take the hardest part, how can we help them to make the day smooth... Most of the time, driver's smile will be the last point of contact the end customer will remember... Your operation may be hard and it is normal, but caring about logistic operators will make you have a bigger team-work. You can reduce rotation that will reduce many KPIs that will impact positively your Customer expectations and needs.
In our industry, there are two customer types. 1. Deliveries to customers for stocking inventories 2. Deliveries to customers immediate order for immediate consumption. The first one is easy because you can schedule your deliveries ie. Increasing your truckload efficiency and optimizing your route schedule. No stockout can occur on the customer side. The 2nd is more difficult to schedule which results in less truckload efficiency. The approach here is to use a smaller delivery vehicle or co transfer with other products, thus maximizing truckload utilization. Monitoring both separately for truckload efficiency will bring transport savings without affecting customer service levels.
Collaborate openly with customer to define and separate the following: - Compulsory needs. These must have direct impact to customer's business. - Nice to have. This could help to strengthen the customer's reputation but less or indirect impact to the business. - Unecessary activities/services. These consume time, effort and financials with no impact to the business. Alignment with the customer on above three factors will bring clarity on what to focus from both logistics provider and customer end.
Un aspecto importante y no nombrado es la ventaja de incorporar tecnología para mejorar la visibilidad de los envíos: Utiliza sistemas de rastreo en tiempo real y plataformas digitales que permitan a los clientes monitorear el progreso de sus pedidos. Esto aumenta la confianza del cliente al proporcionar información actualizada sobre el estado de sus compras.
In a consulting project in which I worked, after segmenting the clients, we identified that there were clients whose marginal contribution was negative, this led to rethink if we should optimize the process, finally the decision taken was to stop serving these clients... directly. We talked to the customers and they were assigned to distributors, who due to their capabilities could serve them in a more profitable way for all of them.