Chapter 4b: Demand Process- The "Serve" Process Flashcards
T or F: the supply chain ends with the sale of a product.
False; companies need to support their product after the initial purchase
The Serve Process is essential for customer ________ and ________; it is (upstream/downstream) focused.
satisfaction; retention; upstream
If customers’ relationship with the new product starts well: satisfaction level should go (up/down), and the likelihood that customers return the product or wreck it through improper use goes (up/down).
up; down
What are the 3 goals of optimizing after-sales support activities?
- Save money
- Reduce resources
- Boost customer loyalty
services provided after products have been sold
after-sales support
After-sales support includes customer ________ and customer _________.
service; support
Customer service or support:
focused on enhancing the level of customer satisfaction.
Customer service
Customer service or support:
focused on building an ongoing relationship between the manufacturer and the customer through the life cycle of the product; mainly for products that require a guarantee, warranty, upgrade, or repair service.
Customer support
T or F: It’s much cheaper to find a new customer than to keep a current one.
False; must cheaper to KEEP a current one than to find a new customer.
After sales support provisions can include what 6 things?
- Training on product use
- Product and software updates
- Scheduled maintenance
- Repair parts and services
- Money-back guarantees
- Warranties for replacement in case of damage/defects
After-Sales Support is accomplished through many means, such as website information, printed documentation, and service personnel. But the most common method is:
a call center operation
The focus of a reputable company’s call center is to handle customer ______ and solve customer _______ before having a dispatcher repair technician or provide a return authorization. This is much _______ than having to send a technician out to a customer’s home.
inquiries; issues; cheaper
Call centers (or contact centers) use a variety of roles/methods to engage with customers and operate. What are 4 of these roles/methods?
- Help Desk Support
- Live Customer Support
- Automated Customer Support
- Support Automation
Match each description to the role/method of call centers that they describe:
a. provides assistance 24 hours a day by phone/online
b. assisting customers with technology merchandise like PC’s, software product, and mobile phones
c. includes online knowledge like Q&A forums, 24/7 systems monitoring, and preventative support services
d. services that help the customer with product questions
a. Automated Customer Support
b. Help Desk Support
c. Support Automation
d. Live Customer Support
Call centers/contact centers/online support are important tools for both _______ and ________.
consumers; manufacturers
(They allow customers to access important info and services in the most convenient way for them (ex: phone, text, online,etc.) For the company, these operations should support the customer’s entire journey with the product.)
When properly used, TECHNOLOGY improves call center operations in terms of what 3 things?
- Improves flow-time (how long it takes to solve customer issues)
- Improves flexibility (how to handle a variety of issues)
- Reduces expenses (how much it costs to resolve those issues)
What must also improve, or the call center process and technology are just an irritant to the customer?
Quality of Service
a system for managing a company’s interactions with current and future customers.
Customer Relationship Management (CRM)
Customer Relationship Management (CRM) utilizes technology to do what 3 things?
- Organize,
- Automate,
- and Synchronize
sales, marketing, customer service, and technical support.
Out of the following, which two are highly relevant to after-sales support?
marketing, customer service, sales, and technical support
Customer service and technical support
The concept of CRM is to align the supplier’s resources with its customers in a manner that increases both customer _________ and supplier _________.
satisfaction; profiting
CRM can provide valuable insight to support customer requirement → companies collect a lot of data about customers. If they can organize it effectively with CRM software, they can analyze the data and use the knowledge to _______ _______ with us. Understanding customer’s ______, ______, _____, etc. allows companies to consistently serve customers.
improve interactions; goals, needs, habits
What is a major capability of a well designed Customer Relationship Management process?
Consistent personalized interaction with customers
T or F: Investing money in a good after-sales support center will help to increase revenue and retain customers.
True
management of the time critical delivery of spare parts to end users as part of an after sales service; informal definition: a bank account saver
Service Parts Logistics (SPL)
Service Parts Logistics is critical for _______ and ________ high value items (ex: computers, cars, appliances, an airplane, etc.)
repairing; maintaining
To build customer confidence in big purchases, companies provide ______ ________ (promises of uptime availability).
repair warranties
T or F: Service Parts Logistics has a unique supply chain that supports the repair and maintenance of equipment as it moves through its post-sale life cycle. (companies supporting products after we buy them)
True
Service Parts Logistics deals with both the __________ and _________ of new inventory, and the repair/refurbishment of major components.
management; distribution
Why is there a tendency for companies to stockpile parts in SPL, which ends up creating excessing inventory that may never be needed?
What does this mean in relation to managing service parts inventory?
- Because they want to provide a rapid response.
- Service parts inventory needs to be managed as closely as they do regular inventory.
About ____% of the U.S.’s GDP is spent on service parts each year.
8%
T or F: There is highly fragmented activity of the service parts supply chain.
True (Some service parts activities are done in house, some are outsourced to 3rd party logistics suppliers, and some are handled by 3rd party component suppliers)
Companies need to control/coordinate the activities of the service parts supply chain in order to avoid customer _________ and extend ______ ______ _____.
If these issues can be overcome, SPL can help build a _______ ________. → Should enhance customer retention and may allow the company to charge a premium for their product.
- frustration; product down time
- competitive advantage
Service parts network requires many of the same capabilities/facilities as a forward SC (4 things):
- Customer demand
- Inventory management
- Fulfillment
- Transportation
(There are also distribution centers, technical support, repair facilities, call center operations, and talented people using relevant technology just like in a forward SC.
What are the 4 unique challenges that Service Parts Logistics faces that aren’t faced in a forward supply chain?
- Low volume
- Infrequent activity
- Rapid response requirements
- Long tail demand (unlike new products where demand starts high and tapers off, demand for service parts is initially low and then grows over time)
What are 2 ways to overcome the unique challenges that Service Parts Logistics faces?
These two things promote service parts inventory _________.
- Set up a Multi-Echelon Fulfillment Process
- Create great cross-chain visibility of your inventory
- optimization (They’ll help you have just enough to take care of the customers without having way too much)
What is the Multi-Echelon Fulfillment Process?
- High demand products are put in decentralized depots close to the customer locations.
- Parts with low frequency demand are stored centrally, either at the factory or the parts suppliers location.
What is one company in particular that is strong in Service Parts Logistics?
Caterpillar (makes heavy equipment for road building, mining, construction, etc.)
What are the 7 goals of SPL activities (the 7 rights of SPL)?
- Right SERVICE parts
- Right quantity
- Right customer
- Right time
- Right place
- Right condition
- Right cost
Reverse Logistics: returns go from the point-of-(origin/consumption) to the point-of-(origin/consumption) for the purpose of ________ ______ or disposing of those goods.
- point-of-consumption
- point-of-origin
- recapturing value
Reverse logistics is a catch all term that includes what 3 things?
- Returns
- Remanufacturing
- Refurbishment
What involves processing of return merchandise due to damage, seasonal inventory, restock, salvage, recalls, and excess inventory?
Reverse Logistics
T or F: Service Parts Logistics includes recycling programs, hazardous materials programs, obsolete equipment disposition, and asset recovery.
False; REVERSE logistics
Product returns cost manufacturers and retailers over $______ ______ annually.
100 billion
Why is reverse logistics more challenging than traditional (forward) logistics?
Many companies haven’t properly planned for them. Instead, they focus on high volume, forward flows of new products.
What are 6 issues/challenges in reverse supply chains that we don’t face in forward supply chains?
- Product Quality Not Uniform
- Damaged or Defected
- Not Packaged Consistently or Properly
- Variety of Reasons for a Return
- Poor visibility
- Some companies don’t have a good idea of how much is returned as a percentage of their sales. (not perceived as important bc they don’t rlly understand the financial impact)
The variety of reasons for a return is a challenge and the expected response. These variations require different types of product flows.
What are the 3 types of product flows?
- Repair and Return
- Return and Redeploy (still value in the product, so it’s redeployed to another store)
- Remanufacture or Recycle (creates the need to send it off to a different facility and then sell the refurbished goods to other companies)
T or F: In reverse supply chains/logistics, it is difficult to forecast returns volume.
If true, what is the result of this poor visibility?
True (don’t know when products are gonna come back or how much labor to assign to the task)
Result: returns pile up and sit until there’s time to deal with them.
Setting up a straight-forward reverse logistics process starts with effective ________ ________. Explain this a little bit.
customer engagement;
When a customer calls about a problem/potential return, the call center must diagnose the situation (figure out if customer truly needs to return product or if they just need some information, product training, or a missing part).
If there’s a need for a customer to return a product, the company should provide a ______ _______ ______ and specific instructions on how to ____ and _____ the goods for retrieval.
return authorization number; pack; label
After a company provides a return authorization number for returns, what is the next step in the returns process?
Company identifies the best option for retrieving the goods from the customers location.
(Usually, companies like UPS/Fed-Ex are used to pick up the return, transport it to a consolidation point and move it to the sellers warehouse or return center)
A companies _______ ________ is responsible for accurately receiving the goods (that are returned) and logging them into the system. This speeds their ability to ______ the customer’s account.
return center; credit
What is the next step in the returns process after the return center receives returns and logs them into the system to speed their ability to credit the customer’s account?
Why is this next step needed?
- The quality/condition of the goods must be assessed.
- An inspection is needed to come up with an appropriate disposition for the goods.
What is the goal of the Returns Condition Assessment?
recover as much of the economic value as possible while minimizing the environmental impact and resource waste.
In the value recovery/redemption phase of a return, the disposition is determined by the most _______ alternative.
profitable
What are the 7 options companies can choose from for the disposition of returns?
Which is most profitable? Which is most expensive?
- Resell - most profitable (bc it will recapture revenue)
- Recondition
- Refurbish
- Remanufacture
- Cannibalize
- Recycle
- Dump - most expensive (bc company will have to pay for disposal of goods)
Match each of the descriptions to the disposition option of returns that they describe:
1. retrieve reusable parts from products that are otherwise unrepairable or too costly to fix
2. do simple product repairs like basic parts replacement or resolve minor defects
3. retrieve materials for conversion into other products with different purposes
4. conduct extensive product repairs which may require product disassembly and rebuilding
5. market unused products as new; best option because it will recapture revenue
6. send defective/broken products to a landfill
7. repackage/clean the product to return it to a like new state
- Cannibalize
- Refurbish
- Recycle
- Remanufacture
- Resell
- Dump
- Recondition
What are the 3 steps of an effective returns process?
An effective returns process will help the company _________ _______.
- Retrieve the product
- Identify the purchaser for credit purposes
- Inspect the product to determine what to do with it
- recapture value.
What are the 4 strategies for managing reverse flows (to reduce costs and minimize the amount of product that ends up in the landfill)?
- Avoidance Technique
- Gatekeeping
- Leverage Technology to Gain Visibility
- Centralized Returns Center
Which strategy for managing reverse flows does this describe:
- provides visibility and control of the Reverse Logistics Process.
- Enables companies to enhance customer service and recover the inventory dollars lost to inefficient returns operations.
- Ex: returns management software → can manage the entire return lifecycle from the time the return merchandise authorization is created through final product disposition.
Leverage Technology to Gain Visibility
Which strategy for managing reverse flows does this describe:
- Do things right the first time to minimize returns.
- Build a high quality product and protect it with appropriate packaging.
- Be realistic with your product advertising, provide logical directions for use and have customer support available
Avoidance Technique
Which strategy for managing reverse flows does this describe:
- ensuring that the customer has a legitimate problem and is eligible for return. → Involves verifying that the customer actually purchased the goods from your company and that the product is still within its returns window or warranty period.
- Also, run through your call center protocol to make sure the product is defective rather than something that the customer doesn’t understand how to use.
Gatekeeping
Which strategy for managing reverse flows does this describe:
- Having all returns processed at a single facility, which gives you greater control over return. That facility will develop an expertise in dealing with unique issues of reverse SC flow.
- Allows other facilities to focus on fulfillment of customer orders without the forward flow being interrupted by returns.
- May be company owned or run by a SC service provider that’s developed an expertise in returns management.
Centralized Returns Center
What are the 5 benefits of having better control of reverse logistics?
- Quick response to customers
- Capturing problem products for inspection/ proper disposition.
- Recapturing value (through product remanufacturing and parts reuse).
- Limiting waste (by using materials rather than throwing them in a landfill)
- Protecting brand image (as a good corporate citizen who rectifies customer problems, promotes safety, and conserves resources)
These post-sales processes (after-sales support activities, SPL, and reverse logistics methods) are important because they pay (long/short)-term dividends of customer ________ and ________.
long-term dividends; satisfaction; retention
