The Various Strategies in Logistic Service Quality: the Logistics Service Provider Meeting - Research Paper Example

 Logistics refers to the efficient flow, along with the storage of goods way from their point of origin up to the point of consumption. This is the section of the supply chain process, which is responsible for planning, implementing and controlling the flow of goods. Apart from that, it can also be perceived as the management of inventory, whether in rest or in movement. Initially, the term logistics got applied in the military service thereby describing the process of supplying troops, supplies, as well as equipment to a war zone; however, this term is presently used more commonly within the field of business (Wisner 2011, p.12). According to recent US study, logistics costs account for nearly 10% of gross domestic product, with the process itself covering a diverse quantity of functional areas. Logistics not only covers transportation and traffic, but also shipping and receiving in addition to storage, as well as import/export operations. The facet of logistics is applicable to certain areas of business; for instance, acquisition logistics, deals with everything involved when obtaining logistics support equipment, together with personnel for a modern weapons system for the military. This entails identification, designing, definition, developing, production, delivering, along with installation of the new weapons system. Additionally, there is the Integrated Logistics Support, which happens to be a management function that tends to provide funding, planning, as well as controls, thereby assuring that the system achieves the expected requirements. Furthermore, there is the expectation that ILS must ensure that the price of the goods tends to be reasonable, with the product being of the required quality (Ala, Phil & Peter 2010, p.25). In the past, all service encounters virtually occurred when an employee, together with a customer are present. The service quality supposed by customers when receiving the service gets regarded as being highly significant. Considering that service quality happens to be a subjective concept, understanding the manner in which the customer thinks concerning service quality is essential to effective management. Therefore, service quality tends to be the consumers’ judgment concerning the overall excellence of a service. Thus, service quality refers to the result of an evaluation process whereby the consumer contrasts his expectations along with the service he perceives he has received. It is the disparity between customers’ expectation with their perception of the real, experienced services. As a result, consumers’ quality perceptions tend to be influenced by a cycle of four distinct gaps happening in organizations, which tend to be on the service provider’s side, thereby impeding the provision of services, which consumers believe as being significant (Berry 1999, p.39). These four gaps are: firstly, the distinction between consumer expectations with management’s views of consumer expectations; secondly, the distinction between management views of consumer expectations with service quality specifications; thirdly, the distinction between service quality specifications with the service truly delivered; and fourthly, the distinction between service delivery with what gets communicated concerning the service to consumers. Quality happens to be distinguishable and comes from customers’ expectations; therefore, it is imperative recognizing and prioritizing expectations for services, as well as improving service quality on the basis of these expectations. Understanding customers’ expectations permit managers, together with employees to endeavor satisfying them. What are the strategies in logistics service quality (customer service)? There are various strategies in logistic service quality, according to Ross (2010, p.39) asserts that logistics comprises of a number of processes beginning with purchasing, from raw materials up to supplementary materials required, tools used within the production process, as well as delivery of the product to the intended customers. All purchases required are in the logistics services for the products’ production. However, according to other logistic experts, in addition to the above involvement, logistics also comprises of inventory management, production, storing, warehousing, handling and shipping. According to Cahill (2006, p.42), logistic services are essential to an organization because the organization ends up enhancing profits, reducing costs, and increasing productivity. It eliminates the difficulty in making the correct decisions within the areas they serve. These improvements are obvious in reducing inventory costs through automating logistics services; utilizing powerful, ample software to schedule the entire organization enhances productivity. Concurrently, choosing an upright, ethical logistics services provider makes sure their effectiveness, as well as a noticeable change takes place in the organization, be it in productivity or even in work efficiency. Therefore for a new organization, it is advisable to seek operations advice from a logistics services; this action succeed in saving them money and efforts, while, at the same time maximizing benefits. However, according to all these scholars, it is agreeable that it is necessary for organizations to establish their own logistics strategies, whereby they plan how they can efficiently benefit from their logistics service provider while measuring the benefits they tend to gain against not using them. Within this logistics strategy, the organization gauges the current strategies handled through the logistics provider in comparison to their definition of the needed service quality. There is also need for the organization to define the time frame for its logistics strategy with the logistics service provider meeting the required service quality in that time frame, or an alternative provider gets introduced for handling it more effectively (James & Jerry 1998, p.71). The areas deemed in the organization logistics strategies comprise of the organization transportation strategies, with the organization logistics strategy keeping its competitors in mind while considering their offers. What are the key attributes and barriers in logistics service quality (customer service)? Different scholars have different definitions on what the key attributes in logistics service quality are; according to Thorsten, Wolfgang & Cornelius (2007, p. 79), these key attributes happen to be the degree of engagement i.e. the level to which a company thrives in creating an intimate relationship that is long-term with the customer. However, according to James & Jerry (1998, p.89), these key attributes tend to be the manner in which an organization enhances service delivery to its customers. However, Cahill (2006, p.90) does research about critical literature review of logistic service quality, and they conclude that logistic service quality has a lack of universal definition since the way of logistic service quality has been developed, so it brings about different point of view. Nonetheless, despite the diversity in the definition concerning the key attributes of logistic service quality, according to all these scholars, there are various attributes that are the primary determinants in logistic service quality; they include: 1. Rapid Response: This deals with an organization's ability in satisfying customer service necessity in a timely way. Information technology plays a key role in increasing the capability to postponing logistical operations up to the latest possible time while accomplishing rapid delivery of required inventory. This has resulted in the elimination of unnecessary inventories traditionally stockpiled in expectation of customer requirements. As a result of rapid response, capability moves operational prominence from an anticipatory posture founded on forecasting along with inventory stocking up to retorting to customer requirements on the basis of a shipment-to-shipment. Considering that inventory is normally not shifted in a time-based system till customer needs get known with performance getting committed, there is little tolerance for operational paucity. 2. Minimum Variance: Variance refers to any unexpected event, which interrupts system performance and might result from any facet of logistical operations. Operating areas of a logistical system get subjected to potential variance. Traditionally, the solution to accommodating variance was the establishment of safety stock inventory or even the use of high-cost premium transportation; however, these practices, considering their expense, along with associated peril, have been replaced by the utilization of information technology in achieving positive logistics control. When variances are minimal, there is an improvement of logistical productivity due to economical operations hence the minimization of variance. 3. Minimum Inventory: Concepts such as zero inventories happen to be increasing as managers endeavor to reduce inventory deployment. Operational defects fail in becoming apparent until there is a reduction of inventories to their lowest possible level. Although the aim of eliminating all inventories tends to be attractive, it is necessary to remember that inventory is capable of facilitating some significant benefits within a logistical system. Inventories are capable of providing improved return on investment in case they result in economies of scale within manufacturing or procurement. Therefore, the aim is to reduce and to manage inventory to the lowest possible level whereas simultaneously attaining desired operating objectives. In achieving the objective of minimum inventory, it is necessary for the logistical system design to control commitment while turning velocity for the whole organization, not just for every business location. 4. Movement Consolidation: The most essential logistical costs happen to be transportation since its cost gets directly linked to the product, the size of shipment, as well as the distance. The majority of logistical systems that include premium service is dependent on high-speed, small-shipment transportation. In reducing transportation cost, there is a need to achieve movement consolidation; therefore, there is a need to facilitate working arrangements, which transcend the whole supply chain. 5. Quality Improvement: Total quality management happens to be a significant commitment throughout all aspects of industry since it is one of the significant forces leading to the logistical renaissance. The quality challenge tends to be magnified since most logistical work gets done under a supervisor's vision. Redoing a customer's order due to incorrect shipment or even in-transit damage tends to be extremely costly compared to performing it right the initial time. Therefore, logistics is a key part of developing, as well as maintaining continuous total quality management improvement. 6. Life-Cycle Support: It is impossible to formulate sound logistical without careful evaluation of reverse logistical requirements. The significance of service support logistics differs directly with the product, as well as with the buyer. For organizations dealing with consumer durables or even industrial equipment, their commitment to lifecycle support comprises of a versatile, as well as demanding operational requirement, in addition to one of the, biggest costs of logistical operations. There is a need for carefully designing the logistical system’s lifecycle support capabilities. Therefore, reverse logistical competency due to worldwide interest to environmental concerns, necessitates the capacity of recycling ingredients, together with packaging materials. Barriers in logistics service quality (customer service) Barnes (2000, p. 59) claims there are various forces bringing about new challenges when it comes to logistics service delivery. On the other hand, Ross (1998, p.61) asserts that these barriers are mainly brought about by the organization itself, with Lachore (2005, p.79) opposing that, despite these barriers emerging from the organization, customers tend to be influential in bringing about these barriers. However, all these scholars agree on what these obstacles that often serve to hinder the process of logistic service quality are they include: 1. Organization Structure: The aim of integration tends to be cooperation amongst functional areas; therefore, the formal organizational structure is capable of hindering success. The general perception that prevailed was that functions that get excellently executed tend to combine, thereby creating overall superior performance. Effective integration of a process like logistics necessitates managers to look past their organizational structure, thereby facilitating cross-functional coordination. Although this might not be best achieved by the creation of a modern organization structure, significant modification of the manner in which an organization handles cross-functional matters is vital for effective process integration. 2. Measurement Systems: It is necessary to develop a new scorecard so as for successfully aiding integration of logistics functions. It is vital for managers to view their exclusive functions as a section of a process instead of as stand-alone activities. A measurement system must be created, which does not penalize managers, thus making logistical integration more practice than theory. 3. Inventory Ownership: The traditional method to inventory ownership is maintaining an adequate supply, thereby gaining comfort and protecting against demand, along with operational uncertainty. For instance, the availability of inventory is capable of supporting long manufacturer runs leading to maximum economy of scale, thereby facilitating sales. Although such practices produce interests, they have a related cost. The vital issue happens to be the cost-benefit relationship, along with the risks related to wrongly located or outdated inventory. 4. Information Technology: Although this happens to be the key resource to achieving integration, information system application gets designed on organization lines with the majority of databases getting limited to specified functions, thereby not being easily accessible on a cross-functional basis. The necessity of sharing information has led to the development of data warehouses, which exist with the sole objective of sharing information amongst systems. The existing applications can only serve as an obstacle to process integration since it is impossible for readily sharing critical data until schemes get created for transferring information. 5. Knowledge Transfer Capability: In the majority of business situations, knowledge happens to be power. Therefore, the failure of transferring knowledge is capable of creating an obstacle to continuous integration in case an experienced employee retires or leaves the firm. Transfer of this form of knowledge, along with experience tends to be difficult to standardize. Logistics happens to be that section of the supply chain process, which is responsible for planning, implementing and controlling the flow of goods; however, it is also being perceived as the management of inventory, whether in rest or in movement. It is agreeable that logistic services are essential to an organization because the organization ends up enhancing profits, reducing costs, and increasing productivity while eliminating the difficulty in making the correct decisions within the areas they serve. Apparently, there are various attributes that are the primary determinants in logistic service quality; they include: rapid response, minimum variance, minimum inventory, movement consolidation, quality improvement and life support. Although there are many benefits accruing from logistics services, there are various obstacles that often serve to hinder the process of logistic service quality, which include: organization structure, measurement systems, inventory ownership, information technology and knowledge transfer capability. If these obstacles are eliminated, there will be the enhancing in the quality of logistic services hence the improvement in the productivity of any organization. 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