Optimization Logistics and Supply Chain Management

Question: Discuss about the Optimization for Logistics and Supply Chain Management. Answer: Introduction The complaint data has been obtained from the ERP of a company which deals in electronics industry. Owing to a lot of SKUs and wrong practices, a large number of customer complaints have been observed. Resolving these complaints is a key to reduce growing customer dissatisfaction Method Total number of complaints by customer: 719 Total number of complaint types: 10. They fall under the heads - Damaged Delivery Invoice Error Lost In Transit Other Packaging Poor Response Quality of workmanship Wrong Product Wrong Quantity Total number of customer complaints raised by Product Family: There are a total of 15 product families against which complaints have been registered. They are: PF1 47 PF2 54 PF3 48 PF4 47 PF5 44 PF6 41 PF7 48 PF8 49 PF9 43 PF10 55 PF11 46 PF12 60 PF13 42 PF14 48 PF15 47 Total number of complaints raised by CSR staffs: There are a total of 10 CSR staffs. P1 63 P2 81 P3 71 P4 96 P5 77 P6 78 P7 62 P8 74 P9 58 P10 59 Task 2 Problem Definition Top 3 problems in terms of complaint types: 1. Wrong Quality = 264 2. Wrong Product = 176 3. Poor Response = 76 Fig 1 Complaint Type wise count of complaints Top 3 problems in terms of product family: 1. PF 12 = 60 2. PF 10 = 55 3. PF 2 = 54 Fig 2 Product Family wise count of complaints (Srinivas, 2011) Top 3 problems in terms of customer: 1. C4 = 19 2. C3 = 8 3. C31 = C27 = 7 Fig 3 Customer Name wise count of complaints Top 3 problems in terms of CSR staff: 1. P4 = 96 2. P2 = 81 3. P6 = 78 Fig 4 CSR staff wise count of complaints Recommendations Task 3: Suggestions and Solutions The top 3 complaint types have been identified as Wrong Quantity, Wrong Product and Poor Response. A customer not receiving the quantity he/she ordered might feel cheated and this may also cause further delay to ship the order again. Since complaints very often would arise only when the quantity is less than ordered, it is important to note that quantity might have been delivered more than ordered to a few customers leading to further loss. Around 37% of the complaints registered fall in this category which makes it an important issue to handle. To tackle this, check-weighers or product counters need to be in place in the warehouse both in the inbound and outbound section. This will ensure receiving and dispatch of the correct quantity and eliminate complaints in this category. In case automation using check-weighers is not feasible due to capital or space constraints, additional labor needs to be trained/ employed to cross check the quantity being received/dispatched by the inbound and outbound supervisors. By analyzing the data of customer complaints, it can be seen that major f ocus should be on product families PF 12, PF 10, PF 4 and PF 11 where the complaint count is quite high. (Christopher, 2011) Not receiving the product the customer ordered will lead to disappointment on the customer side and this badly reflects on the service offered by the company. To add to this, it leads to further delay in processing the orders. Wrong product complaints are often a result of poorly organized warehouse. It must be noted that the warehouse keeps 30,000 stock keeping units (SKUs) which can easily create confusion if mismanaged. To tackle this problem, the layout of the warehouse should be such that proper sections should be allotted to products of different types where products are stored in pallets. (Ridler, 2016). Further, to identify products, bar codes may be used and scanning systems might be installed which will reduce dependency on manpower to do such tasks of product identification. Processes should be in place to allocate sections/pallet positions to new products which must be checked on a regular basis (weekly or fortnightly). Use of forklifts can help ease the process. (Suryava nshi, 2010). Forklift drivers should be trained and well guided to locate the correct product being asked for. Major focus should be on product families PF 15 and PF 10 where the complaint count for this type is quite high. The response time for every complaint is 7 days as can be inferred from the given data. Moreover, it takes additional 3 to 13 days to close the complaint. For a customer this implies a total lag of 10 to 20 days. Implementing the above solutions should reduce the no. of complaints received. This in turn should be utilized to reduce the response time. With lesser complaints registered now, response time should be brought down to 2-3 days. (Anholcer, 2012). The second issue with respect to poor response might be due to the inability of the responder while dealing with domestic and international customers. This should be dealt with by training the responder to enhance his/her communication skills. A workshop regarding the same will be very handy. (Herder, 2013) Other prominent complaints come in the heads of delivery, packaging and damaged goods. Delivery time should be notified to the customer well in time. Further, follow ups need to be taken to ensure timely delivery. (iSight, 2016). Secondly, delivery address need to properly noted from the customer (example, PIN code should be asked) and communicated to the goods delivery service provider. For proper packaging and ensuring there are no damaged goods, proper sampling should be done during inbound to check the goods. Goods which fall below the set specification should be rejected. Further, forklift drivers should be trained so that goods are not damaged while handling them. Stacking norms in the warehouse should always be followed. Packaging should also be done properly so that goods are not damaged while in transit. (Myerson, 2012) References Christopher, M 2011, Logistics and Supply Chain Management, FT Press. Myerson,P 2012, Lean Supply Chain and Logistics Management, McGraw Hill Educations Anholcer, M 2012, Optimization of Supply Chain via Reduction of Complaints Ratio, viewed on 19 August, 2016 from https://kbo.ue.poznan.pl/anholcer/publ/201201supply_chain_optimization.pdf Suryavanshi, P 2010, Customer Complaint Handling, viewed on 19 August, 2016 from https://pradipsuryavanshi.blogspot.in/2010/03/customer-complaint-handling-customer-of.html Srinivas, M 2011, Building Lean Supply Chains with the Theory of Constraints. McGraw Hill Educations Ridler, B 2016, Six Steps to Dealing with Customer Complaints, viewed on 19 August, 2016 from https://www.eonetwork.org/octane-magazine/special-features/sixstepstodealingwithcustomercomplaints Herder, A 2013, How to handle customer complaints, viewed on 19 August, 2016 from https://trainingmag.com/content/how-handle-customer-complaints iSight 2016, A Practical Guide to Handling Consumer Complaints, viewed on 19 August, 2016 from https://www.customerexpressions.com/CEx/cexweb.nsf/(GetPages2)/A_Practical_Guide_to_Handling_Consumer_Complaints