Consumer Customer Service Survey

Situation

We were asked by a major worldwide food company to develop a logistics strategy for one of its frozen food lines sold to restaurants. This company was experiencing nationwide competitive pressure from other suppliers who were providing superior customer service and distribution services in the form of lower laid down cost at the customer's warehouse. Since distribution costs comprised over 30% of the landed product price, logistics strategy was an important dimension in overall product marketing strategy.

Solution

We conducted a series of interviews, data analysis, on?site reviews, competitive interviews, and customer surveys. On the basis of this diagnostic review of the company's policies and practices, we developed a strategy geared to strengthening:

  • The customer service function in operations, thus relieving the sales force from assuming this role
  • Carrier negotiation activities with irregular route common carriers, contract carriers, and rail carriers
  • Order fill rate
  • In-plant materials management
  • Freight accounting practices
  • Sales forecasting, order entry and order fulfillment, inventory management, and production planning systems
  • Inter-departmental communication

Benefits

The company received benefits from the study by reducing "lost" freight charges, increasing order fill rates, and justifying a customer service function positioned at the division rather than sales level. Other benefits were received by lowering customer freight costs through negotiating railcar supply and lower freight rate rail contracts. The corresponding increase in sales volume was estimated to be in the millions of dollars.

For additional information, contact Pete Crosby 310 553-6837 Petecrosby@cgrmc.com