Doctoral Dissertations

Date of Award

5-1992

Degree Type

Dissertation

Degree Name

Doctor of Philosophy

Major

Business Administration

Major Professor

C. John Langley Jr

Committee Members

Kenneth Kirby, Richard Sanders, James Foggin

Abstract

Technological and environmental change in logistics systems in the 1980s demand new approaches and tools for firms to establish and maintain competitive advantage through value creation. Logistical customer service has long been recognized as a key area for creating customer value, and evidence suggests that this component will become more important in the future. Dynamic market forces have created a need to continually improve customer service systems as customer expectations increase. The traditional approach of quality improvement is statistical process control. However, by utilizing the Taguchi strategy and methods it was possible to demonstrate that higher quality service can be achieved at no, or reduced cost to the customers through reduction and elimination of variation. Furthermore, it is also possible to design customer service delivery programs without controlling or eliminating causes of variation, and still obtain "on target" performance. The research was conducted in two phases. Data for Phase 1 was collected using a survey mailed to over 200 buyers and warehouse managers, each, who were customers of a major consumer goods company. Frequency distributions, chi-square analysis, Thurstone's CASE 5, analysis of variance, and multivariate analysis were used to analyze the data. Phase 2 involved the use of historical data taken from the firm's customer service measurement system within the structure of an orthogonal array for experimental design. The major findings of this research was that length of order cycle, on-time deliveries, and completeness of shipments are key drivers of buyers and warehouse managers quality perception. These factors are two to three times more important than other components of the customer service delivery process. In addition, it was shown that the measurement of unacceptable order cycle length can be used to build customer service profiles for differentiating service level. The largest gain in benefit to the consumer goods company can be realized by shortening the order cycle time, particularly for promotional orders. Another finding of the research was that promotional orders and brand introductions are direct contributors to customer service delivery performance which is not "on target." For promotional orders, order size is critical to performance while order lead time significantly impacts brand introduction delivery. It was also determined that order size and carrier type affects neither average nor variation of customer service delivery performance. To conclude, the differences in approach and method of research design add to the strength and depth of knowledge of the research findings. The combination of the two phases offers the consumer goods company the opportunity to improve the quality of its customer service delivery process - both from a perceptual and actual measured performance within the complicated, current operating environment of regular, promotional, and emergency orders, and new brand introductions.

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