| Overview A mid-sized U.S. company is a manufacturer of consumer products. It was frustrated by its consistent inability to deliver full and on-time orders. Sales were lost, orders were cancelled, stock-outs were common, and customers were not satisfied with the quality of services they were receiving. Objectives This project involves an evaluation of the client's current service process and a review of the various types of problems that interfered with the achieving of the desired customer service quality. Our strategists found that there was an uncontrolled customer service policy by the sales department and that, freight carriers, the last ones in the chain, were generally blamed for delays in the delivery of orders to the customers. Therefore, frustration and overpressure regularly appear in their daily businesses. Our approach includes an upstream evaluation of the client's order-processing method. AddReal's team conducted a process-mapping dashboard that reviewed the flow of orders from the sales and sales broker staffs, through the credit approval process, and through each customer service phase. We mapped the flow of materials and information through production planning, manufacturing, and the transportation/logistics departments. In order to develop a new strategy, AddReal highlighted, among other issues, that sales brokers tended to hold orders with delivery dates assigned up to seven days before a customer decided whether any changes were required in the quantities ordered, and that the average "hold time" was just over four days. Another important factor was that the client's credit department tended to hold orders for up to an additional four days, even though 95% or more of the client's customers showed no credit problems whatsoever. By the time orders were delivered to production planning and manufacturing, AddReal determined that the major problems were the lack of anticipation of the needs of the sales department and the lack of early notification of next order deliveries to the transportation and shipping department. Freight carriers were called each evening and were only then told about the client's trucking needs for the following day. In many cases, carriers experienced problems getting equipment to the client's place of business in a timely manner, resulting in delivery delays. Solution AddReal developed a strategy that involved a digital customized system in order to reorganize the customer's team for each part of the process. By doing so, each participating department in the supply chain was notified by the system when each task needed to be done. The task was then sent to the next in line in the process with detailed instructions about the required date and time so that they could be aware of pending orders. While this advance information enabled departments to improve their planning, contingency plans were established to handle exception orders that needed to be changed or held for credit reasons. Another benefit enabled the transportation and shipping departments to notify freight carriers of pending shipments well in advance of actual ship dates. Carriers were then able to participate in the planning process, which allowed them to make the necessary equipment readily available for each day's shipment needs. Feedback received from the client's customers showed a substantial increase in customer satisfaction with the quality of service provided by this client. Results - The new system provided the sales staff and the client's sales brokers with the ability to follow pending orders. This increased the visibility of current orders early in the cycle and allowed more efficient management of the credit approval process, all with a 3 day average cycle. - The production planning and manufacturing department was able to receive preliminary input forecasts and new orders instantaneously. - The shipping department could receive future deliveries 3 days prior to the delivery date and was able to improve the previous logistics process by 67%. - The executive staff now had a completely customized dashboard that allowed the tracking of flow caps in real time and helped them devise solutions to problems at any level of the chain. - 3 months after the launch of the strategy, our client reported a complete recovery of the company and an 86% customer satisfaction rate. |
