Improving Customer Service Series – I – Measuring Availability

The core value of business success is adapting to customer requirements in a profitable and efficient manner. Although it is accepted that customer service is important, many top managers find it extremely difficult to explain what it is and how to do it. Customer service, from a logistic point of view, represents the role of a provider in fulfilling the marketing concept. To improve customer service, it is essential to establish clear performance standards for each of the activities and measures related to those standards. In the basic customer service program, the focus is often on whether the provider is able to provide all seven rights to its customers: the right amount of the right product at the right time in the right place in the right condition at the right price with the correct information. This concept also applies to the interlining industry.

To improve customer service, careful analysis of competitive performance and customer responsiveness is critical to the process of identifying the attributes in a basic service strategy. The fundamental attributes of basic customer service were identified as availability, operational performance and service reliability. These attributes will be discussed in a series of articles in detail.

In this article, availability is discussed in detail. Availability is the ability to provide inventory when a customer needs it. Traditional practice for an interlining supplier for woven interlinings, nonwoven interlinings, and fusible interlinings is to stock inventory prior to customer orders. An inventory storage strategy is typically based not only on forecasted demand for products, but also on some differential storage policies for specific items, including an item’s profitability, popularity, importance, and value.

For a supplier of woven interlinings, nonwoven interlinings, and fusible interlinings, achieving a high level of inventory availability requires a great deal of planning. Availability performance is measured on three attributes, namely out-of-stock frequency, fill rate, and completed orders shipped.

1. Frequency of shortages.
A stockout frequency occurs when a supplier does not have a product available to meet customer demand. Stock-out frequency refers to the probability of a stock-out occurring in a business with no inventory on hand to fulfill customer orders. The aggregation of all stockouts for all products can serve as an indicator of a company’s performance in providing a basic service commitment on product availability. Therefore, taking an interlining supplier for woven interlining, non-woven interlining and fusible interlining for example, a good strategy should be applied to reduce the frequency of out-of-stock.

2. Fill rate.
The fill rate measures the impact of stockouts over time. It is important to identify units of a product that are not available for customer order. Fill rate performance is typically used to evaluate a specific item or customer, such as woven interlining, nonwoven interlining, and fusible interlining, or for any combination of business segments, such as products and customers. However, the fill rate may not always require 100% achievement. The customer can accept a new order for the short items at a later time. The essentials of the fill rate strategy must take into account the customer’s requirements for the products.

3. Order shipped complete.
Complete Shipped Order is the most accurate measure of a supplier’s performance in terms of product availability. It covers everything in a customer order as an acceptable performance standard. An order will be recorded as zero for a complete shipment even if the supplier was unable to provide an item on a customer’s order.

The three availability measures above help determine the extent to which a supplier’s inventory strategy meets customer demand. They also serve as a basis for evaluating the appropriate level of company product availability from a logistics perspective. With information technology to identify customer demand in advance and the application of forecasting theory, an interlining supplier for woven interlinings, non-woven interlinings, and fusible interlinings achieved high levels of product availability basic service performance without a corresponding increase in inventory. . Understanding product availability measurement is the starting point for planning an excellent customer service strategy.