Cause-and-effects on transport effectiveness

Transport effectiveness in wholesale addresses the question of how the requirements of customers are met. Efficiency and effectiveness are pursued at the same time whereas effectiveness is of higher emphasis for the interviewed companies. With the objective of categorizing these customer requirements, the Kano model is applied in order to show the relationship between customer satisfaction and transport performance. The Kano model divides customer requirements in three categories: basic needs, performance needs and

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delighters (Kano et al., 1984). Basic needs are primary criteria for consumer satisfaction that are taken as evident by the consumer. In case of non-fulfilment of these criteria, customers are extremely dissatisfied but their fulfilment does not automatically lead to customers’

satisfaction. In this context, customers expect the right product in the right quality at the right place at the right time to the right costs. Any defect in any of the aspects mentioned before results in extremely dissatisfied customers. In general performance needs are explicitly mentioned by the customers. Consequently, customers are dissatisfied if they are missing and their level of fulfilment impacts customer satisfaction. With regard to transport in wholesale, for example customized smaller product assortments were recognized as performance needs.

Delighters are latent. Therefore, these value attributes are neither explicitly demanded nor expected. However, customers are delighted in case of strong fulfillment. Individual services such as additional handling of goods were recognized as delighters.

Figure 4.3: Customer satisfaction with logistics from wholesaler’s viewpoint (own research) Figure 4.3 shows different degrees of fulfilment of transport service features from basic needs to delighters. The overall answers of the interviews regarding customer satisfaction are presented in Figure 4.3 for the categories fulfillment and knowledge about customer perception. Only the fulfillment of delighters can lead to differentiation from the competition.

Insufficient fulfillment of transport effectiveness

Interview results show that often, customer’s basic needs cannot be fulfilled to the satisfaction of the customers. Ensuring a smooth functioning of the basic logistical requirements is especially important given the background that customers ordering behavior has changed significantly with opening of online shops. Short-term order behavior has a strong impact on logistics with regard to greater flexibility and leads to shorter planning cycles. During the

Satisfaction

Neutral

Dissatisfaction

Feature absent Feature fulfilled

Delighters

(e.g. individual services)

Performance Needs

(e.g. specific product assortment)

Good knowledge about customer needs Moderate knowledge about customer needs

Little knowledge about customer needs Basic Needs (5 R‘s of Logistics) Differentiation

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interviews, it became evident, that from a wholesaler’s point of view, supply reliability is the most important criterion for customers within the transport process. Given the background of later ordering, wholesalers do have increasing problems in terms of responsiveness. Even small craftsmen outsource their logistics and order relatively small quantities within ever shorter timescales. Hence, there is an increasing demand for logistics concepts such as Just in Time not only for JIT deliveries to construction sites. Those customer requirements are difficult to fulfill with regard to a certain level of logistics including transport efficiency.

Consequently, wholesaling companies should be closer to customers from a logistical point of view. In comparison, competitors do have smaller warehouses in urban agglomeration close to customers and thus, can be more flexible in terms of transport logistics. Currently, the adaptation of logistics to novel delivery concepts poses challenges to wholesalers both with regard to fulfillment of service levels and concerning the efficiency of their own processes.

One wholesaler describes it as “service overkill”.

Insufficient knowledge about customer’s perception on transport effectiveness

Transport effectiveness is seldomly considered. Wholesalers state that they do not know if their customers are satisfied with logistics. Some general managers refer to the sales staff. In case of complaints, customers contact the wholesaling company directly. Consequently, customers are satisfied if the wholesaler does not get complaints. Only one company has led a present customer satisfaction survey. Therefore, optimizations are mostly efficiency driven and lack a customer orientation. In contrast, wholesale companies improve efficiency in logistics to the detriment of transport effectiveness. As part of efforts to increase transport efficiency, scheduling based on a tour optimization program is introduced in some companies in order to better schedule transports. As a consequence, drivers of those companies do not any longer have fixed tours and they are not responsible anymore for the same customers.

According to the interview statements, customers have taken it badly because they prefer to have fixed drivers and also fixed delivery times. The importance of drivers has further declined due to new delivery concepts to construction sites where drivers often do not have contact with customers anymore. Nonetheless, for many customers, it is still important to continuously have the same logistics contact person. Although prior studies highlighted the importance of frontline employees in logistics and physical distribution, recent studies stressed the relevance of drivers within physical distribution. Thus, drivers as other customer contact employees do have an impact on customers purchase behavior (Bode et al., 2011).

Missing strategic perspective with regard to transport effectiveness

Transport performance regarding transport effectiveness is not recorded regularly and systematically. Due to high competition and customer’s power, a differentiation through logistics becomes more and more important. Therefore, collaborative planning with customers could lead to more efficient processes and these gains could be shared in the supply chain.

Customer specific differences in transport logistics depending on customer’s importance are not yet taken into account. However, in order to differentiate wholesale companies need to fulfill performance needs to a higher level and have to find attractive value elements in order to delight customers. Most of the interviewed wholesale companies think about possible cost reduction strategies such as further outsourcing of parcel shipments in order to make transport more efficient. However, the majority of the interviewed companies does not intend to fully outsource transport. But currently wholesalers perceive new customer demands on logistics as a burden rather than a chance. Thus, logistics including transport are not in wholesaler’s strategic focus. Possible differentiation strategies are not taken into consideration even if this would lead to customer loyalty. Hence, a logistics differentiation strategy is necessary in order to be effective and satisfy the customer on a long-term perspective.

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