1、Contemporary LogisticsTwelfth EditionChapter 7Demand Management,Order Management,and Customer ServiceLearning Objectives7.1 To understand the linkages between demand management,order management,and customer service7.2 To introduce you to demand forecasting models7.3 To examine the order cycle and it
2、s four components7.4 To understand the four dimensions of customer service as they pertain to logistics7.5 To familiarize you with select managerial issues associated with customer service Demand Management(1 of 7)Demand management can be defined as“the creation across the supply chain and its marke
3、ts of a coordinated flow of demand.”11John T.Mentzer,“A Telling Fortune,”Industrial Engineer,April 2006,4247.Demand Management(2 of 7)Demand(sales)forecastingRefers to an effort to project future demandIs a key component in demand managementIs helpful in make-to-stock situationsIs helpful in make-to
4、-order situationsDemand Management(3 of 7)Demand forecasting models Three basic types of demand forecasting models:oJudgmentaloTime seriesoCause and effect(associative)Demand Management(4 of 7)Demand forecasting models Judgmental demand forecasting model:oInvolves using judgment or intuitionoPreferr
5、ed in situations where there is limited or no historical dataoTechniques include surveys,the analog technique,and others Surveys used to learn about customer preferences and intentions An analog(similar item to that being forecasted)is used as the basis for demand historyDemand Management(5 of 7)Dem
6、and forecasting models Time series forecasting model:oUnderlying assumption is that future demand is solely dependent on past demandoSome techniques include:Simple moving averages Weighted moving averagesTable 7.1:Forecast Example Using the Simple and Weighted Moving Average TechniquesTime period(1)
7、Demand(2)Simple MovingAverageWeightingFactor(3)ProjectedDemand(4;=2 3)WeightedMoving AverageWeightingFactor(5)ProjectedDemand(6;=2 5)Last month250.2562.5.40100Two months ago230.2557.5.3069Three months ago200.2550.2040Four months ago180.2545.1018Forecast215227Demand Management(6 of 7)Demand forecasti
8、ng models Cause-and-effect forecasting model oAlso referred to as associative forecastingoAssumes that one or more factors are related to demand and that the relationship between cause and effect can be used to estimate future demandoSome techniques include:Simple regression Multiple regressionDeman
9、d Management(7 of 7)Demand forecasting issues Selection of forecasting technique(s)depends on many factorsSelecting an inappropriate technique will reduce forecast accuracyForecast accuracy can have important logistical implicationsComputer forecasting software unable to completely eliminate forecas
10、t errorsOrder Management(1 of 10)Order management refers to management of the various activities associated with the order cycle Order cycle(replenishment cycle or lead time)refers to the time from when a customer places an order to when goods are received Order to cash cycle refers to the length of
11、 time it takes an organization to receive payment for an order Some organizations include order to cash cycle in their order management modelOrder Management(2 of 10)Four stages of the order cycle include:Order transmittalOrder processingOrder picking and assemblyOrder deliveryOrder Management(3 of
12、10)Order transmittal Refers to the time from when the customer places an order until the seller receives the order Methods of order transmittalo In persono Mailo Telephoneo Faxo ElectronicallyOrder Management(4 of 10)Order processing Refers to the time from when the seller receives an order until an
13、 appropriate location(i.e.,warehouse)is authorized to fill the orderOrder Management(5 of 10)Order processing activities include:Checking for completeness and accuracy Checking the buyers ability to purchase Order entry into the computer system Crediting salesperson with the sale Recording the trans
14、action Determining inventory location Arranging for outbound transportationFigure 7.1:Flowchart of Order Handling(Order Processing)SystemOrder Management(6 of 10)Order picking and assembly Includes all activities from when an appropriate location is authorized to fill the order until goods are loade
15、d aboard an outbound carrierOrder Management(7 of 10)Order picking and assembly Often represents the best opportunity to improve the effectiveness and efficiency of an order cycle Can account for up to two-thirds of a facilitys operating cost and timeOrder Management(8 of 10)Order picking and assemb
16、ly Examples include:o Handheld scannerso Radio-frequency identification(RFID)o Voice-based order pickingo Pick-to-light technology Order Management(9 of 10)Order delivery Refers to the time from when a transportation carrier picks up the shipment until it is received by the customerOrder Management(
17、10 of 10)Order delivery Three key order delivery issues:o Variety of options in terms of transit time are now available,such as delivery by 12 noon and delivery by 4:30 p.m.o A number of shippers are emphasizing both elapsed transit time as well as transit time reliabilityo Transportation carriers a
18、re revamping their operations to provide faster transit times to customersCustomer Service(1 of 4)Defined as“the ability of logistics management to satisfy users in terms of time,dependability,communication,and convenience.”2 Customer service is much more difficult for competitors to imitate than ot
19、her marketing mix variables such as price and promotion2Roger A.Kerin,Steve W.Hartley,and William Rudelius,Marketing,10th ed.(Boston,MA:McGraw-Hill/Irwin,2011),Chapter 16.Customer Service(2 of 4)Four dimensions of customer service include:Time Dependability Communication ConvenienceCustomer Service(
20、3 of 4)TimeRefers to the period between successive events(e.g.,order cycle)DependabilityRefers to the reliability of the service encounterConsists of three elements:oConsistent order cycles oSafe deliveryoComplete deliveryCustomer Service(4 of 4)CommunicationTo be effective,should be a two-way excha
21、nge between seller and customerGoal is to keep both parties informedRequires correct parties to be involved in the process ConvenienceFocuses on the ease of doing business with a sellerManaging Customer Service(1 of 2)Four specific customer service considerations include:Establishing customer servic
22、e objectives Measuring customer service Customer profitability analysis(CPA)Service failure and recoveryManaging Customer Service(2 of 2)Establishing customer service objectives Means by which goals are to be achieved Should be“SMART”:o Specifico Measurableo Achievableo Realistico TimelyKey Terms(1
23、of 3)Activity-based costing(ABC)Benchmarking Cause-and-effect forecasting Collaborative planning,forecasting,and replenishment(CPFR)Customer profitability analysis(CPA)Customer serviceDemand managementJudgmental forecastingMake-to-order Make-to-stockKey Terms(2 of 3)Multichannel marketing systems Order cycle Order delivery Order fill rate Order management Order picking and assembly Order processing Order to cash cycle Order transmittal Order triageKey Terms(3 of 3)Pick-to-light technology Service recovery Service recovery paradox Time series forecasting Voice-based order picking
