The Opinion Page
News and comments about the issues facing today's SCM and Inventory Management professionals.
I have a colleague who works for a major player in the international financial services industry. This company is solid financially and is generally successful, but experiences the usual types of customer service issues that many companies face: failure to deliver some proportion of their service to a client or customer on time. These failures result in disappointed or irate customers, and frustrated customer service agents.
My colleague explained that while internal business process lead times involving exchange of information from person to person, or from department to department, are written in to policy, the lead times are frequently ignored. In the simplest of terms, documents sit on Individual A's desk for a week longer than they should, and others have to make up for the problem. The result is that tremendous pressure is put on downstream business processes to make up time for upstream failures. This pressure can come at great cost, both financially (overtime) and in human terms (stress). If the downstream work centre cannot deliver miracles, or they simply pay attention to the policy lead times that are standard for their section, the customer receives the service late. Result = irate customers, and another series of problems with which the company has to deal.
It is not good enough to articulate workable lead times in policy. They must be monitored and enforced. Their importance must be underlined by Senior Management, even in industries that deliver no hard goods. It is interesting that such a best practice in Supply Chain and Inventory Management applies even to such an industry.
By applying good logistics principles, this company could achieve considerable improvement in customer service,
It can be done!
John Skelton is the Principal Consultant and founder of Strategic Inventory Management.