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A Supply Chain Customer Service Evaluation
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Pao-Tiao Chuang
Department of Asia-Pacific Industrial and Business Management National University of Kaohsiung
Kaohsiung, Taiwan 811, R.O.C.
Abstract---This paper aims to evaluate and analyze the supply chain customerserviceperformancein Taiwan’s IC packaging industry. It, first, reviews literatures and conducts a pre-interview with the management personnel of IC packaging industry and the customers to draw up customer service items of the supply chain. Then, a questionnaire is designed to rate the importance degree and to evaluate the performance degree of each supply chain customer service item. The questionnaires are mailed to the management personnel of the enterprises that place orders to the IC packaging company. The returning data is collected and analyzed by a performanceimportance matrix. The resource allocation priority for the improvement opportunity of each customer service item is identified according to the location of the particular customer service item that falls in the performanceimportance matrix. Finally, suggestions regarding to the effective operations and competitiveactionsofTaiwan’sIC packaging industry in the supply chain are provided.
Key Words: Supply Chain Management; Customer service; PerformanceImportance Matrix.
1. INTRODUCTION
The global competition in current volatile business environment has forced the enterprises to strengthen the ability and performance of supply chain management. A supply chain consists of all stages involved, directly and indirectly, in fulfilling a customer request. The supply chain not only includes the manufacturers and suppliers, but also transporters, warehouses, retailers, and customers themselves [2][3]. Therefore, to ensure customer satisfaction, an enterprise should not only enforce the relationships among the inter-firm functions but also increase the supply performance among the intra-firm activities. In this regards, customer service is a measure of the effectiveness of the supply chain in creating value added to the product or service exchanged. Customer service has a direct impact on a firm’s market share, its total logistics costs, and ultimately its profitability [8]. Customer service determines whether customers will remain customers. Existing research [4][5][7] shows that the higher the customer service is, the higher the customer satisfaction and the more possibility that the customers will be retained. Therefore, to ensure the customer satisfaction and the long-term profit of a supply chain, a continuous evaluation that compares the performance and the importance for each customer service items is imperative for continuous improvement of supply chain
operation.
Therefore, this paper evaluates and analyzes the supply chain customer service performance in Taiwan’s IC packaging industry,followed by suggestionsto Taiwan’s IC packaging industry on the resources allocation. As shown in Figure 1, this research, first, reviewed literatures and conducted a pre-interview with the management personnel of IC packaging industry and the customers to draw up customer service items of the supply chain. Then, a questionnaire was designed to investigate the importance degree and the performance evaluation of each supply chain customer service item. The questionnaires were mailed to the management personnel of the enterprises that place orders to the IC packaging company. The returning questionnaire data
was collected and analyzed by a
performanceimportance matrix to identify the resource allocation priority for the improvement opportunity of each customer service items. Finally, suggestions regarding to the effective operations and competitive actionsofTaiwan’sIC packaging industry in thesupply chain were provided.
Figure 1. Research Process Pre-interview management personnel and customers of IC packaging industry Literature review on customer service measurement of SCM
Draw up supply chain customer service items in IC packing industry
Design questionnaire and investigate the management personnel of the enterprises that place
orders to IC packaging company
Analyze performance importance Matrix to conform the resource allocation priority for the
improvement opportunity
Advise the effective operations and competitive actionsforTaiwan’sIC packaging industry Proceedings of The Fourth Asia-Pacific Conference on Industrial Engineering and Management Systems
2 2. CUSTOMER SERVICE ITEMS
The supply chain customer service items in this paper are synthesized from the existing literatures [1][5][6][9][11] and the pre-interview information of the management personnel and customers in IC packaging industry. In this aspect, the customer service is categorized into four dimensions: applicability, availability, affordability, and serviceability. Each dimension involves several customer service items that the customers concern and are used to evaluate the supply chain performance. The definition of each dimension and the involved customer service items is described below.
Applicability: the IC packaging company should not only increase its own production capability but also satisfy the customer requirements on the product and the manufacturing process. The applicability dimension includes five customer service items: quality (yield), technology specification conformance, production facility conformance, packaging scale and size specification, and technology innovation and patents. Availability: the IC packaging company should establish strong, close, and cooperative relationships with its suppliers to ensure that the supply capacity is sufficient to satisfy the downstream customers’ needs. The availability dimension includes seven customer service items: supplier’s capacity, flexibility, on-time delivery, delivery place, the possibility of order stock-out, ability of quick response, responsiveness of expediting orders. Affordability: the IC packaging company should commits to reduce the total logistics costs and sharing the profits with its partners in the entire supply chain. The affordability dimension includes three customer service items: price, transportation cost, and degree of mutual benefit and profit sharing.
Serviceability: the IC packaging company should enforce the customer services on pre-transaction elements, transaction elements, and post-transaction elements to avoid customer complaints and increase customer satisfaction. The serviceability dimension includes six customer service items: post-sale service, willing to implement manufacturing/service improvement project, timeliness of complaint and liability manipulation, in-plant representative, responsiveness to order inquiry and order tracing, and convenient communication of the sales representative.
3. PERFORMANCE-IMPORTANCE MATRIX ANALYSIS
To identify the resource allocation priority for the improvement opportunity of the IC packaging company, a performanceimportance matrix analysis is performed by using data from questionnaire investigation. The questionnaires were post-mailed to the customers of the IC packaging companies. The respondents were asked to rate the importance degree and evaluate the performance degree of each customer service item. A Likert-five-scaled was used to represent the relative degrees of importance and performance for each
customer service item. That is, for rating the importance degree, a numerical value of 5 represents the highest importance degree and 1 the lowest important degree. Also, for evaluating the performance degree, 5 represents the highest and 1 the lowest. In this regard, 33 out of 97 mailed questionnaires were returned.
Collected data was used to compute the arithmetic average of both the importance degree and the performance degree, respectively, for each customer service item. The results are shown in Table 1 and the performanceimportance matrix is shown in Figure 2. In Figure 2, the horizontal axis represents the performance degree and the vertical axis represents the importance degree for the customer service items. The matrix can be divided into four quadrants by the mean value of each axis. The first quadrant represents high degree of performance and high degree of importance. Those customer service items that fall into the first quadrant are the niche items. The second quadrant represents low performance degree but high importance degree. Those customer service items that fall into this quadrant need to be improved immediately. The third quadrant represents low performance degree and low importance degree. Thus, the resources that were previously allocated to those customer service items in this quadrant could be retained or deleted. The fourth quadrant represents high performance degree but low importance degree. Therefore, the resources that were previously allocated to those customer service items in this quadrant could be partially switched to those in the second quadrant in contemplating resource constraints.
4. SUGGESTIONS TO RESOURCES ALLOCATION
From the performanceimportance matrix analysis, this paper found that the quality (yield), technology specification conformance, packaging scale and size specification, supplier’s capacity, flexibility, on-time delivery, responsiveness of expediting orders, price, willing to implement manufacturing/service improvement project, and the timeliness of complaints and liability manipulation are those customer service items that explicit high performance and high importance. Thus, those items are the niche customer services that Taiwan’s IC packaging industry possess and should promote these abilities in the global competition to attract the international customers.
On the other aspect, the technology innovation and patents, the possibility of order stock-out, and the ability of quick response are the customer service items that fall into the second quadrant of the matrix. Thus, these items need immediately improvement in Taiwan’s IC packaging industry.
Further, the delivery place, the transportation cost, the degree of mutual benefit and profit sharing, the in-plant representative, the responsiveness to order inquiry and order tracing, and the convenient communication of sales representative are those customer service items that show Proceedings of The Fourth Asia-Pacific Conference on Industrial Engineering and Management Systems
3 low importance degree and low performance degree. The resources previously allocated to these items could be retained and deleted.
Finally, the resources that were previously allocated to the customer service items of the production facility conformance and the post-sale service could be partially switched to those customer service items that need to be improved immediately due to the high performance degree and low importance degree.
Dimension Customer Service Item Importance Performance
1. Quality (Yield) 4.36 3.91 2.Technology specification conformance 4.27 4.00 3. Production facility conformance 3.82 3.91
4. Packaging pattern and size specification 4.36 4.09 A p p li c ab il it y
5. Technology innovation and patents 4.09 3.72 6.Supplier’scapacity 4.18 4.09 7. Flexibility 4.09 3.91 8. On-time delivery 4.18 3.91 9. Delivery place 3.64 3.73 10. Possibility of order stock-out 4.18 3.82
11. Ability of quick response 4.18 3.64
A v a il ab il it y 12. Responsiveness of expediting orders 4.09 3.91 13. Price 4.09 4.09 14. Transportation cost 3.72 3.55 A ff o rd -a b il it y
15. Degree of mutual benefit and profit sharing
3.82 3.64
16. Post-sale service 4.00 3.91
17. Willing to implement improvement project
4.09 3.91
18. Timeliness of complaint and liability manipulation
4.18 3.91
19. In-plant representative 3.91 3.73
20. Responsiveness to order inquiry and order tracing
4.00 3.82 S e rv ic e ab il it y 21. Convenient communication of sales representative 4.00 3.64 Mean Value 4.06 3.84
Table 1. Arithmetic average of importance degree vs. performance degree ＊1 ＊4 ＊2 ＊11 ＊10 ＊8,18 ＊6 ＊5 ＊7,12,17 ＊13 ＊21 ＊20 ＊16 ＊19 ＊15 ＊3 ＊14 ＊9
Figure 2. PerformanceImportance matrix 5. CONCLUSIONS
Taiwan’s IC packaging industry has been playing an important role in the global supply chain of electronic products. To compete with international enterprises from other countries, the increase in supply chain customer service performance is essential to Taiwan’s IC packaging industry. In this case, a measurement of the supply chain customer service that differentiate the relative importance and the relative performance of each customer service item for further resources allocation is needed. This paper investigatesTaiwan’sIC packaging industry and their customers to identify the performance, compared to the importance, of the supply chain customer service. Through a performance-importance matrix analysis, suggestions regarding to the effective operations and competitive actions of Taiwan’s IC packaging industry in the global supply chain competition are provided.
Among those suggestions, in addition to the niche items and the retained or deleted items, the technology innovation and patents, the possibility of order stock-out, and the ability of quick response are the customer service items that need immediately improvement and the production facility conformance and the post-sale service are the customer service items that the allocated resources could be partially switched. A further research on the relative required cost and time for each of these five items showed that the improvement activities on customer service items of the possibility of order stock-out, the ability of quick response, and the post-sale servicerequirelesscostand lesstime.Thus,Taiwan’sIC packaging industry should implement more resources on these three customer service items to improve their performances immediately in the very short period of time. On the other aspect, due to the more cost and more time needed for improvement on customer service items of the technology innovation and patents and the production facility conformance, the IC packaging company should implement a strategic planning on these two customer service items for the long-term competitivenessofTaiwan’sIC packaging industry in the global supply chain of electronic products.
ACKNOWLEDGMENT
This research was funded by the National Science Council, Taiwan, under the grant (NSC 90-2218-E-390-001).
REFERENCES
1. Bagchi,P.K.(1997),”LogisticsBenchmarking asA Competitive Strategy: Some Insights,” Logistics Information Management, Vol.10, No.1, pp.28-39. 2. Chopra,S.and Meindl,P.(2001),“Supply Chain
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Im p o rt an c e low high h ig h lo w Improve immediately Niche items
Retain or Delete Partially SwitchResources
Mean value (3.84) Performance M ea n v al u e (4 .0 6 ) Im p o rt a n ce
Proceedings of The Fourth Asia-Pacific Conference on Industrial Engineering and Management Systems APIEMS'2002, Dec. 18-20, Taipei, Taiwan
4 3. Dornier, P., Ernst, R., Fender, M., and Kouvelis, P.
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COST-TIME MATRIX ANALYSIS
To provide effective operations and competitive actionsforTaiwan’sIC packaging industry in thesupply chain, a cost-time matrix analysis was performed. In this stage, investigations regarding to the relative required cost and time, respectively, for each of the customer service items that fall in the second and the fourth quadrants of the performance-importance matrix were performed. Therefore, the other questionnaire that ranks the required cost and time, respectively, for each of the customer service items of the technology innovation and patents, the possibility of order stock-out, the ability of quick response, the production facility conformance and post-sale service was designed. The questionnaire was sent to the IC packaging companies. The respondents were asked to rank the relative required cost and time, respectively, when implementing improving activities on each of the five customer service items. In the ranking system, 1 represents the least cost or time required, and 5 represents the most cost or time required. In this stage, 15 out of 70 mailed questionnaires were returned.
Proceedings of The Fourth Asia-Pacific Conference on Industrial Engineering and Management Systems APIEMS'2002, Dec. 18-20, Taipei, Taiwan
