customer service driven insert your thesis title …...distribution wholesale retail project sub...
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Prakit Worawattananon
22 MAY 2008
Advisor: Dr. Larry Lapide
Insert Your Thesis TitleCustomer Service Driven
Supply Chain Segmentation
2Prakit Worawattananon
Company X- Business Context & ChallengeObjective - Developing a Segmentation FrameworkData & InformationAnalysis & Model Development
- Push-Pull ModelOpportunities for Future Research
AgendaAgenda
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Business Context Business Context –– Company XCompany X
Company X
Manufacturing
Cement Chemical
Building Paper
Distribution
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Business Context Business Context –– DistributionDistributionCompany X
Cement Chemical
Building Paper
Distribution
Outside Company X
Wholesale
Retail
Project
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SituationHigher Competition: Domestic & InternationalSaturated Domestic Market
ChallengeChallenge
SolutionDevelop New Supply Chain Strategy
Understand Customers
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ObjectiveObjective
Supply Chain Segmentation: “the process enabling business to formulate the right product or
service to its customers”
Developing a Framework for Supply Chain Segmentation based on Customer Service
Understand Customer Needs
Classify Customers for Segmentation
Propose Services to Match the Customers
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Data & InformationData & Information
78 Customer Surveys
600,000 Sales Data Record
6 Interviews with Sales & Marketing Managers
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Analysis & Model DevelopmentAnalysis & Model DevelopmentCustomer Channel
Distribution
Wholesale
Retail
Project
Sub dealer
Transformer
Building
Housing Estate
Home owner
Local contractor
Individual HouseIndividual House
Contractor
Project owner
Infrastructure
Industrial
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Factor Wholesale Retail Project
Buying Behavior
- Slow Buying Decision - Focus on Relationship
- Convenient to Buy - Small Lot Buying
- Big Lot Buying- Focus on Product Specification
Product Characteristic
- Low Product Variety- Brand Preference
- High Product Variety- Brand Preference
- High Product Variety- No Brand Preference
Major Next- tier Customer
- Sub dealer- Transformer
- Home Owner- Local Contractor
- Project Owner- Contractor
Price Sensitivity
Medium Sensitive Low Sensitive High Sensitive
Segmentation Factors
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“Company’s Perspective”• Contribution • Loyalty • Potential
Push Factors“Customer’s Perspective”
• Product • Order Process • Logistics • Financial Support
Pull Factors
Service Set 3
Service Set 2
Service Set 1
Customer Service Sets
Push-Pull Segmentation Model
3
2
1
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Dealer Contribution Potential Loyalty Group
Code($) Level Class
P-001 828,900 2 A No 3
P-002 372,400 3 A Yes 3
P-003 507,900 2 B No 3
P-004 2,574,700 1 A No 3
P-005 249,800 3 A No 4
P-006 1,526,500 1 A Yes 1
P-007 396,100 3 C No 4
P-008 554,500 2 B No 3
P-009 2,881,800 1 B Yes 2
P-010 3,876,900 1 A No 3
P-011 538,100 2 A Yes 2
P-012 685,900 2 B No 3
Push Segmentation Factor
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Pull Segmentation Factor
Pull Segmentation FactorProduct Price Service Logistics Financial
Support- Variety- Availability
- Quotation Response- Price Discount
- Technical Support- Damage/Claim Handling - Training & Seminar - Co-Approach End User - Relationship Activity
- Urgent Order Delivery- On time Delivery - Status Tracking Inf.
- Credit Line- Credit Term
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Group 1
Total Integrated Solution: - Approach Project Owner - Fast Approval + Proposal, - Collaborative Planning & Execution (Demand + Production + Logistics) - Financial Support
Group 2
Special Service Solution: - Approach Project Owner, - Fast Approval + Proposal, - Logistics - Financial Support
Group 3 & 4 No Special Service
Proposed Services
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Measure Customer NeedsProgram Feasibility StudyResources Sharing among BUs
Opportunities for Future ResearchOpportunities for Future Research
Prakit Worawattananon
22 MAY 2008
Advisor: Dr. Larry Lapide
Insert Your Thesis TitleCustomer Service Driven
Supply Chain Segmentation
Q&AQ&A
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Thank YouThank You
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Appendix
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Group Contribution Potential Loyalty
1 1 A Y
2 1 B Y
2 B Y
3 1 A N
1 B N
1 C Y
2 A N
2 B Y
2 B N
2 C Y
3 A Y
3 B Y
Criteria for Push Segmentation Factor Ranking
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Group Contribution Potential Loyalty
4 1 C N
2 C N
3 A N
3 B N
3 C Y
3 C N
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Deale r
Gro up Product Price Service Logistics
Financial Support
Code
Variety
Availability (C
SL)
Quotation R
esponse
Price D
iscount
Technical Support
Dam
age/Claim
Handling
Training and Seminar
Co-A
pproach End U
ser
Relationship A
ctivity
Urgent D
emand D
elivery
Ontim
e Deliver
Status Tracking Inf.
Credit Line ($M
illion)
Credit Term
(Days)
P-001 3 60%95 %
2 Days N On Site < 5 Days
Selectiv e Y
Mediu m No 95% N 0.3 30
P-002 3 60%95 %
2 Days N On Site < 5 Days
Selectiv e Y
Mediu m No 95% N 0.3 30
P-003 3 60%95 %
2 Days N On Site < 5 Days
Selectiv e Y
Mediu m No 95% N 0.3 30
P-004 3 60%95 %
2 Days N On Site < 5 Days
Selectiv e Y
Mediu m No 95% N 0.3 30
P-005 4 50%95 %
3 Days N Call < 7 Days
Selectiv e N
Mediu m No 95% N 0.2 30
P-006 1 80%99 % 1 Day
5 % On Site < 1 Day 100% Y High Yes 99% Y 1 45
P-007 4 50%95 %
3 Days N Call < 7 Days
Selectiv e N
Mediu m No 95% N 0.2 30
P-008 3 60%95 %
2 Days N On Site < 5 Days
Selectiv e Y
Mediu m No 95% N 0.3 30
P-012 3 60%95 %
2 Days N On Site < 5 Days
Selectiv e Y
Mediu m No 95% N 0.3 30
Project Channel: Services Needed by Dealer
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MIT Excellence Supply Chain Framework to design Supply chain processes that best deliver the Business strategies
Go-To Market Strategy
Supply ChainStrategy
OperatingModel
Centralize vs.
Decentralize
Performance Objectives
Identify the best way to manage from order taking to product delivery and after sales services (end-end supply chain strategy)
Define system and work process
Identify performance metrics (KPIs) with priority
Decision to centralize for synergy or decentralize for individual value creation
Define the Business’s Marketing strategies to bring products and services to target customers
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Group 1 & 2
•Integrated IT •Platinum Service•Knowledge Sharing
Group 3
•Integrated IT •Logistics Service: Warehouse & Transportation Consolidation
Group 4•Logistics Service: Warehouse & Transportation Consolidation
Group 1
Total Integrated Solution: Approach Project Owner, Fast Approval + Proposal, Collaborative Planning & Execution (Demand + Production + Logistics), Financial Support
Group 2
Special Service Solution: Approach Project Owner, Fast Approval + Proposal, Logistics, Financial Support
Group 3 & 4 No Special Service
Retail
Project
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Collaborative ActionService Customers (Dealers) Company
Integrated IT - Computer Desktop - Internet Network
- Network Infrastructure - Software - Technical Support
Express Service
- Loyalty Program Membership- Readiness to Receive Cargo - Proof of Loss or Damage
- Customer Call Center- Mobile Technicians- Special Truck Fleet
Fast Service - Readiness to Receive Cargo - Proof of Loss or Damage
- Customer Call Center- Mobile Technicians- Special Truck Fleet
Logistics Service
- Wider Delivery Window Allowed
- Consolidation Planning & Operation
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