The service level of a company can be defined in many ways. This blog concentrates mostly to reliability of delivery and supply capacity as parts of service level from wholesale businesses perspective.
Reliability of delivery generally means that a product or service is delivered in accordance with a contract between the buyer and seller at the right time, in the right way, at the right price and quality. Shorter; the desired quantity will be delivered on the promised day. On the other hand, supply capacity means how well a company is able to respond to customer needs in terms of the scope of the product range, the quantities desired and the delivery times. Again shorter version; is it possible to deliver all the products the customer wants with the desired delivery time.
Reliability of delivery is part of quality measures and customer satisfaction. Reliability of delivery links directly to the company’s profitability. Complaints, persistent or repeated deficiencies in deliveries and post-deliveries cause unnecessary extra work and costs. And surely doesn’t improve customer satisfaction and customer experience.
Supply capacity can affect the company’s bottom line even more. At worst, a poor selection or long delivery times lead customers to order some goods or even the entire order from a supplier who has the goods available “on the shelf”.
Both delivery capacity and delivery reliability are good indicators of the quality of operations. They act both as an internal measure and towards customers and to other internal groups. Monitoring both at the daily, weekly and monthly basis provides a good overall view that can even be used to predict trends and develop and scale activities accordingly. Efficient inventory management and control is a must for good delivery capacity and reliability.
With the help of efficient inventory management and control, you always know exactly which products are in stock, how many and where the products are located. For batch and serial number traceable or obsolete products, identifying information is also important. In this case, there won’t be date-old goods left and the back of the warehouse, which has to be sold at a lower price or even disposed of at one’s own expense. In addition to this information, it is essential to know customers’ purchasing history and strive to understand buying behavior anyway. That, of course, is not directly related to inventory management, but even this information can be enriched from inventory management and delivery data.
Let’s go back to the service level for a moment. In addition to availability, the service level is also affected by other things, such as the quality and reachability of customer service. All of these incur costs. A team of 10 customer service representatives is expected to be able to answer the phone faster than three. The cost is also multiple in this example. Similarly, if every product in the product catalog is stored, the service capacity of the warehouse is certainly high, but the cost is also considerable. The key is to find the right level for all your activities. In this case, costs remain under control and the service level of both the warehouse and customer service is high.
WMS, or warehouse management system, provides the company an excellent tool to manage and develop its inventory management. With WMS, you can control and optimize the functions in your warehouse and continuously develop them based on the right data. In this case, you always have the right number of staff in your warehouse in proportion to your orders and workload, and the products can be found in the right places. This streamlines operations and makes warehouse an efficient service for your business and customers instead of an expense.
CEO, Metsys Oy