Logistics service is Concept definition, system, organization and management

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

The development of market relations, accompanied by the emergence of a huge number of commercial, trading, transport, forwarding, warehouse, information and other intermediary companies, has led to the complication and change in the forms of cooperation between them and between manufacturers, intermediaries and buyers of products.

In these respects, industrial processes are becoming increasingly important, aimed at meeting the various consumer demand of the population, which is not limited only to the demand for products.

Strengthening, on the one hand, competition, and on the other hand, various integration actions of business organizational structures also leads to an increase in demand for services.

Under these conditions, the organization must be ready to supply the market not only with a quality product in natural physical form, but also with a different set of services for this product.

At the same time, the users themselves dictate the composition and quality of products, the level of service, etc.

As a result, the decisive factor in the purchase of services is not always the price and consumerthe value of the product, but also the real ability of companies to provide the necessary services at a competitive level.

Concept

Logistics service is a set of intangible logistics operations that provide the greatest satisfaction of consumer demand in the material management process and the best level of costs.

The concept of high quality transport service is based on standardized definitions of "service" and "service".

Any company that thinks about the success of its own business focuses first on the needs of customers, and then monitors consumer demand.

The basis of demand for any product is its usefulness, which is determined by users and quality.

Reusable items require service. The more expensive the products, the more attention should be paid to the manufacturer for maintenance. If a product that is not supported by the manufacturer in the form of a service goes on sale, then such goods will not be bought in bulk and will not find their consumer.

Each of us at least once in our lives bought household appliances, and the first question that was asked to the seller about the product was regarding the guarantee of the product. If the equipment breaks down, where can it be repaired or spare parts can be purchased. Without receiving detailed information or, having heard that the guarantee for the goods is not provided, most likely, the buyer will leave without buying anything.

Customer requirementsforcing manufacturers to care about the maintenance of their own products.

The more complex the equipment and the wider the range of products, the more difficult it is to keep track of the right amount of spare parts, the frequency of their production and the geography of buyers.

To reduce the costs associated with the creation of spare parts, you need to track the optimal size of them by creating a request for spare parts that come from the service departments.

To maintain the required level of service for their products, enterprises create a special service that deals with both maintenance and the supply of spare parts.

The introduction of logistics services helps companies to classify the process, to establish a relationship between the enterprise and the service departments. This service is provided either by the supplier itself or by a forwarding company specializing in the field of services of this kind.

The entire list of types of work carried out in the field of logistics services can be divided into three main groups:

• work related to pre-sale preparation of products;
• services that are provided during the implementation of products;
• sales service.

Based on customer requests, finished goods can be pre-sales.

For example, if these are electrical or mechanical goods, then usually the buyer asks for a mandatory inspection of these products.

To implement these functions, there is nothe need to create a department or increase staff. It is enough to prepare and educate salespeople in the maintenance of equipment and goods.

Various additional services may be provided during the sale of products, for example:

• stock availability;
• use of the order, including the choice of assortment, packaging, the formation of loading units and other operations;
• ensure reliable delivery;
• provision of information on the passage of goods.

After-sales logistics service is the following set of tools: warranty service, customer claims investigation duties, exchanges, etc.

Creating registers of goods sold allows you to accurately find a list of quality products, identify defects and make suggestions to correct this marriage.

All after-sales services should be carried out by dedicated service departments with certain experience.

Level: concept and calculation

The level of logistics service is a quantitative characteristic of the correspondence between the real values of quality indicators and the number of such services.

The level is calculated according to the following formula:

Y=m / M100%, where: Y - service level. m - quantitative assessment of the real size of the provided logistics services. M - a quantitative estimate of the theoretically possible level of the likely size of the service.

The level of service can also be estimated by comparing the time for the implementation of services,practically rendered in the delivery process, with the time that would have to be expended if the full range of possible services were provided in the same delivery process.

To assess the level of logistics services, more important types are selected, the provision of which is associated with significant costs, and the absence of which leads to significant losses in the market.

A bit about quality

In the scientific literature, the characteristics of the logistics service, which determine the level of quality of the service provided, are divided into three operational groups, reflecting the specifics and timing of the provision of services before, during and after the delivery of material products to the user.

First group: presale characteristics. These are customer service factors determined prior to concluding a real contract for the provision of services. This group is usually referred to as a written customer service policy (contracts), ordering method, order size and methods of contacting the service operator.

The second group of characteristics includes operational properties specifically related to the action of providing such services - this is the cycle time, the availability of the required amount of stock in the warehouse, the delivery time and the availability of other ways to implement it, the reliability of delivery and information about the status of the order.

The third group of service quality characteristics connects all after-sales properties of the logistics service implementation, for example, a clear organization of the procedure and accuracy of billing, product return conditions,procedure for examining customer complaints and conditions.

The listed characteristics are examples of properties that reflect consumer requirements for the quality of logistics services.

The fundamental thing in assessing the quality level of a logistics service is the understanding that the assessment, based on the user's beliefs, is subjective and is based on a comparison of the expected and actual characteristics of the service.

Service Quality Criteria

In order to provide the best set of services, the following customer experience criteria must be adhered to:

• Time from receipt of order to delivery. Delivery time - the interval between the dates of issue and the execution of the order. The manufacturer wins the market by providing a shorter delivery time.
• Reliable and customizable. Ready for delivery - consistency of the delivery time of the order by the supplier with the wishes of the client.
• Stability of supply.
• Completeness and availability of the order. The quality of deliveries is the proportion of orders that were completed in accordance with the order (specification) of the client.
• Easy to place and confirm an order. Information readiness - the readiness of the company to provide all the data requested by the buyer about the types of products supplied by him.
• Objectivity of prices and regularity of information on operating costs;
• Offers for loan opportunities.
• Efficiency of cargo handling technology in warehouses.
• Qualitypackaging and implementation of container transportation.
• Delivery reliability and flexibility. The obligatory accuracy of delivery is an assessment of the supplier's fidelity to the agreed terms in the contract.
• Possibility to choose the delivery method. The importance ratio of some indicators may vary. In countries with developed market economies, the reliability of supply is a more significant indicator.

Logistics Service System

When choosing a finished product, the client takes into account the manufacturer's capabilities in the field of these services, in other words, the supplier's competitiveness is influenced by the range and quality of its intended services. On the other hand, the expansion entails additional expenses.

The logistics service system is the process by which a manufacturer creates a set of services.

The list of such services and their significant range, the impact of services on the competitiveness and value of the company, as well as a number of other reasons, emphasize the need for a company to have a clearly defined strategy in this area of customer service logistics.

Shaping the system

The sequence of actions for the formation of the company's service system is carried out according to the following scheme:

• Segmentation of the consumer market.
• Identification of more important services for customers.
• Ranking services.
• Defining service benchmarks in the context of some parts of the market.
• Assessing the services provided, establishing a relationship between the level of service and the price of the services provided.
• Determine the level of service needed to keep the company competitive.
• Establish customer feedback to ensure services meet customer needs.

To reduce the costs associated with providing services, a company's resources must be focused on delivering the identified service options that matter most to their customers. This is the organization of the logistics service.

How is it managed?

Quality control is one of the properties of logistics management, which is occasionally used, partly applied, or completely ignored. However, quality management plays a major role in logistics.

One of the circumstances is the need to show the firm's ability to provide products and services that meet customer and regulatory requirements.

Logistics is a mechanism that ensures customer satisfaction, therefore quality management plays a major role in this science.

Inevitably, in the absence of quality management, almost all systems may malfunction, just as some operating systems may simply be missing.

Of course, logistics service management is used to operate efficiently and increase the productivity of a firm.

Where all processes work without errors, the possibility of failures is greatly reduced. Quality management of logistics services allowsquickly find weak areas that require immediate editing.

Distributing and maintaining a quality management program can be a difficult process. An outside supplier who has experience in quality improvement can be a valuable partner. Quality management programs are more productive when there is a collective focus and a willingness to put maximum effort into the process.

Documentation required from the supplier for the goods: certificate of conformity, certificate of origin, invoices, etc. In case of violation, the supplier must change the goods and reimburse all expenses that were associated with this substitution.

Directions of system optimization

The task of the service of logistics companies is to find the best value of the service level with the necessary quantitative and high-quality indicators. The unsatisfactory sales process with low values of logistics services appears in developed service markets. Let's imagine that a wholesale business wants to operate in a developed service market with a breadth of assortment within 10% of that offered by competitors.

The best value for service level can also be found by summing up the cost of service (service) and the loss in the market that was caused by the deterioration of the service level. The following aspects are used to assess the quality of the logistics service:

• delivery reliability;
• expiration of the period specified in the contract from the receipt of the purchase orderproduct batches;
• ability to take into account the special wishes of customers;
• availability of stock in the supplier's warehouse;
• loan opportunity.

Transportation

Formation of a logistics service system in the process of servicing passenger traffic includes the following steps:

• Segmentation of the road transport services market and its division into certain groups of buyers according to different aspects, for which certain services are typical in accordance with the features of the transport service and aspects of its assessment.
• Determine the list of more important services for passengers.
• Defining quality benchmarks in the context of selected parts of the market.
• Rating of services included in the list;
• Choosing more important services for buyers.
• Establish feedback from passengers to ensure that the quality of service meets their possible and approved requirements.
• Assessing the services provided, establishing a relationship between the level of service and the price of the services provided, determining the level of service needed to increase the competitiveness of the transport company.

When the service works in the process of transport logistics service, the main principle that must be fulfilled is a necessary element. It consists in obtaining the greatest financial effect, expressed in minimizing logistics costs.

The implementation of this principle is carried outthrough quality customer service. The principles proclaim the values of consumption, therefore the level and content of services that are provided to users are put at the forefront in the field of logistics. Reducing the time it takes to quickly complete a transportation order is becoming the most important goal of quality passenger service.

Problems

Difficulties in the formation of a logistics service include: characteristics for evaluating transport services, quality of service and determining a rational level of service.

The relevance of the issues of improving transport services is justified by the possibility of increasing competitive advantages by providing the user with good services, based on the composition and cost of services, which is determined by the specificity of logistics services.

Optimization is based on the balance of the manufacturer's interests in reducing costs, increasing the size of sales of products and, consequently, increasing the income and profitability of the company.

Conclusion

Logistics service is a set of operations that ensure maximum satisfaction of customer demand.

As a result, the increase in the company's competitiveness, which was caused by an increase in the level of service, is accompanied, on the one hand, by a decrease in costs in the market, and on the other, by an increase in the price of services. The task of the logistics service is to find the best level of service.

Studying the difficulties of logistics services, you need to take into account the following problems of service formation:

• on timeincrease service reliability and willingness to take orders and customer requests;
• reduce the overall costs associated with inventory;
• reduce the price of goods and services.