CUSTOMER SERVICE OPERATIONS CERTIFICATION TRACK for Entry to

CUSTOMER SERVICE OPERATIONS CERTIFICATION TRACK for Entry- to Mid-Level Professionals in Supply Chain Management Note: This Power. Point is based on LINCS. CSO. v 2. 13. 06232016 - Customer Service

LINCS: Leveraging, Integrating, Networking, Coordinating Supplies Developed by the LINCS in Supply Chain Management Consortium, comprised of 12 educational institutions: Broward College (Lead Institution) Long Beach City College Columbus State Community College Northwestern University Essex County College Rutgers, the State University of New Jersey Florida State College at Jacksonville San Jacinto College Georgia Institute of Technology St. Petersburg College Harper College Union County College In partnership with the Council of Supply Chain Management Professionals (CSCMP)

LINCS in Supply Chain Management Consortium Broward College, Lead Institution 1930 S. W. 145 th Avenue, Suite 224 Miramar, FL 33027 (954) 201 -8440 Author: LINCS in Supply Chain Management Consortium Title: Customer Service Operations Certification Track Release Date: 06/23/2016 Version: v 2. 13 • To learn more about LINCS, visit www. LINCSeducation. org • Content was developed and produced by LINCS in Supply Chain Management Consortium and is licensed under a Creative Commons Attribution 4. 0 International License. To view a copy of this license, visit http: //creativecommons. org/licenses/by/4. 0/. – Use of this document as a bibliographic reference should employ the following citation: • Customer Service Operations Certification Track. LINCS in Supply Chain Management Consortium. June 2016. Version: v 2. 13. www. LINCSeducation. org. Disclaimer: The photos used within this document may only be used with this content. The license does not include copying photos for use with any other content. 3

Customer Service COURSE OVERVIEW 4

Course Overview Course Dates: – Instructor: – Program Coordinator: Student Expectations: • Students must contribute to a respectful learning atmosphere that enables all students to participate at a high level. • Students are required to arrive to class on time in order to not disrupt the learning environment • 80% attendance in classroom sessions and a minimum of 70% on the CSCMP Customer Service Operations certification exam. Note: • The content provided within this certification track relates specifically to Customer Service Operations. The national certification examination will include questions on both the Customer Service Operations content and the Common Learning Blocks content. • Materials listed under Optional Supplemental Resources sections are not included on the national certification examination. 5

Abstract • Customer values drive the supply chain. – Customer Service is woven into every aspect of the supply chain. – Actual product and service offerings must match customer requirements. – Supply chain operations should be set up to provide the products and services that customers value at the price they are willing to pay and within the timeframes they expect. • Customer service can create customer satisfaction – Customer satisfaction leads to happy, loyal customers. These relationships are the key to continued sales and repeat business. – Customer satisfaction must be the responsibility of every employee during all customer interactions. – Customer service operations are woven into every aspect of the supply chain • This certification track is intended to provide a description of the basics of customer service, sound communications processes, advice for dealing with challenging customers, the customer order and return (reverse logistics) processes, jobs in customer service, and legal concerns. 6

Course Structure Learning Block 1 – Customer Service Overview • Unit 1 Customer Service Defined • Unit 2 Customer Service Barriers • Unit 3 Maintenance of Customer Relationships • Unit 4 The Customer Life Cycle • Unit 5 Customer Relationship Management (CRM) • Unit 6 Service Performance Metrics Learning Block 2 – Communication Skills in Customer Service • Unit 1 Communication • Unit 2 Communication Processes • Unit 3 Barriers to Communication • Unit 4 Guidelines for Effective Communication • Unit 5 Management of Challenging Customers Learning Block 4 – Returns and Reverse Logistics • Unit 1 Understanding Reverse Flows in the Supply Chain • Unit 2 The Customer Return Process • Unit 3 Industry Differences and Best Practices • Unit 4 Key Metrics Used to Assess the Returns Process Learning Block 5 – Jobs and Legal Concerns • Unit 1 Customer Responsibilities and Job Types • Unit 2 Laws, Rules, and Policies • Unit 3 Trust and Ethics • Unit 4 Common Laws • Unit 5 Legal and Regulatory Concerns Learning Block 3 – The Order Process • Unit 1 Systems and Technologies • Unit 2 Customer Orders • Unit 3 Order Tracking and Monitoring • Unit 4 Order Process Improvements and Metrics • Unit 5 Best Practices in Order Management 7

Week 1 Syllabus Date Week 1 Mon 7/25 Learning Block 1 – Customer Service Overview Unit 1 Customer Service Defined Unit 2 Customer Service Barriers Unit 3 Maintenance of Customer Relationships Wed 7/27 Learning Block 1 – Customer Service Overview Unit 4 The Customer Life Cycle Unit 5 Customer Relationship Management (CRM) Unit 6 Service Performance Metrics Thu 7/28 Learning Block 2 – Communication Skills in Customer Service Unit 1 Communication Unit 2 Communication Processes Unit 3 Barriers to Communication Unit 4 Guidelines for Effective Communication Unit 5 Management of Challenging Customers 8

Review SUPPLY CHAIN 9

Review What is a Supply Chain? • A supply chain is a system of people, processes and technology involved in moving and processing resources and services from raw materials to the end user. Wholesaler Manufacturer Retailer Supplier Customer Supply chains are the flow of materials, information, and finances as they move in all directions from supplier to manufacturer to wholesaler to retailer to consumer. 10

Review Customers in the Supply Chain • End Customers drive the supply chain because they are the ones that ultimately pay for all of the activities. Material Information Money Customers create demand their values and expectations drive the supply chain strategy and structure. 11

Information Drives the Process Review Shared information is critical for efficiency and accuracy. Adapted from - https: //www. linkedin. com/pulse/20141029141523 -25701104 -get-end-to-end-control-over-your-omnichannel-order-management-cycle 12

Review Integrated Business Management relies on good relationships between both internal and external groups. Major Areas: • Planning – Strategic, demand tactical forecasting and planning • Procurement – All activities required to purchase materials, products and services • Operations – Manufacturing (converting) and deployment of goods • Logistics – Movement and storage of materials, products and services • Integration – Communication and visibility within companies and with suppliers, customers and service providers • Customer Service – Satisfaction of both internal and external customer requirements Source - http: //www. edzeal. com/supply_chain 13

Review Demand Shaping Demand shaping is the influencing of demand to match planned supply. • External methods of balancing supply and demand – Adapt price and lead time to encourage behavior – Plan new product introductions – Identify cross-selling opportunities and complementary products • Internal methods – Shift excess demand to a future period (e. g. advance bookings or future appointments) – Flexible manufacturing / buying • Build excess inventory during periods of lean demand consuming them during peak demand times • Plan stock-outs to drive demand (depending on Customer Service goals) • Labor adjustments • Outsourcing 14

Review Responsiveness / Agility Responsive, agile supply chains help moderate the impact of inaccurate forecasts. The Bullwhip Effect refers to increasing swings in inventory in response to shifts in customer demand as one moves further up the supply chain. 15

Review Product-Process Matrix – Links marketing decisions and product’s life cycle to an organization’s operations capabilities • Project Process - High variety and low volume (e. g. , custom homes or bridges) • Job Shop Process - Medium-tolow volume and medium-to-high variety (e. g. , beauty shops or auto repair shops). • Batch Process - Medium volume and medium variety (e. g. , bakeries or productions of auto parts). • Repetitive Process - Medium-tohigh volume and medium-to-low variety (e. g. , appliances, automobiles, or buffet restaurants). • Continuous Process - High volume and low variety (e. g. , oil refineries, chemical plants, or bottling factories). Figure 35. Product-process matrix. Developed by LINCS Consortium. 16

Review Product Life Cycle • • Different product categories will have different life cycles. The amount of time a product spends in each phase can vary dramatically. Supply chains need to adapt to support the life cycle so customer service requirements may change over time. Image Source - http: //www. dineshbakshi. com/igcse-business-studies/marketing/revision-notes/product-life-cycle 17

Review Defining How Products Are Sold What are some examples of each type of product? Project or shop, high customization, low volume (custombuilt homes, individually designed yachts, custom vehicles) Some customization, orders required prior to production, parts may be in inventory (builders spec home, restaurant food) Repetitive process, standardized parts / modules, may allow some customization (cars, paint tinting) Mass produced goods kept in inventory ready to ship, assembly lines (tissues, tires, clothes) 18

Review Defining How Services Are Offered Service operations provide intangible products or services directly to consumers • Service Factory - Low labor costs, low customization, and low customer interaction (e. g. , trucking companies airlines. ) – Price driven – Focus on facility and equipment utilization, maximizing output and keeping costs low • Service shop - High customization and customer interaction but relatively low labor costs (e. g. , auto repair shops) – Need to current with technology – Focus on efficient scheduling • Mass service - Lower customization and customer interaction, but labor costs are relatively high (e. g. , retail banks) – Focus on improving service times, often through automation • Professional service - High customization and customer interaction and high labor costs (e. g. , doctors, lawyers) – Highly educated workforce – Services are time-consuming and deeply customized 19

Review Six Sigma • Total Quality Management (TQM) - Design processes throughout the organization to product consistent quality EVERY TIME! • Six Sigma – ensures that there are only 3. 4 defects per million opportunities by identifying the reasons bad parts are made, removing the root causes of defects and reducing variability 20

Review Transportation Each mode has distinct attributes and may require different skill sets for customer support. – What is the best mode/combination of modes necessary to maximize customer satisfaction? Five Major Modes of Freight Transportation Air Truckload Cost • Intermodal Rail Trade-off between performance and costs Water Performance (Speed, Reliability, Flexibility) 21

Learning Block 1 CUSTOMER SERVICE OVERVIEW 22

Learning Block 1, Objectives Learning Block 1 Objectives Upon completing this learning block, the learner will be able to: • Understand how customer service can lead to customer satisfaction • Differentiate key steps in the customer order process • Explain job roles • Interpret legal concerns • Recognize how service performance is measured • Remember several key technologies used in CRM • Implement the key aspects of maintaining and improving customer relationships 23

Learning Block 1, Overview Learning Block 1: Customer Service Overview Learning Block 1 Description This learning block provides an introduction to the key elements of customer service that are necessary to ensure high levels of customer satisfaction. • Types of customers • Common barriers to customer satisfaction • Approaches to addressing challenging customer situations • Customer order process • Customer relationship management (CRM) • Customer life cycle (CLC) • Maintenance of ongoing customer relationships 24

Learning Block 1, Overview Customer Service Overview Customer Satisfaction - Meeting Customer Expectations Who is a “Customer”? • Internal – People within the organization. – Any member of your organization who relies on assistance from another to fulfill his/her job duties. • External – Someone who uses your company’s products or services but is not part of your organization. – Sometimes – but not always – someone who buys your product • Help desk agent that answers questions provides customer service to callers 25

Learning Block 1, Overview Customer Service Strategy Must Support Corporate Goals • Corporate Strategy – How do they want to serve their customers? – Where do they want to compete? • Price • Service • Innovation • Flexibility • What are the organization’s values? – How do those values guide their customer relationships? Vision Strategy Tactics What do we want to be in the future? How will we accomplish our vision? What methods will we use? 26

Learning Block 1, Overview Examples – Corporations Focused on Customers American Express • “At American Express, we have a mission to be the world’s most respected service brand. To do this, we have established a culture that supports our team members, so they can provide exceptional service to our customers. ” IKEA • “At IKEA our vision is to create a better everyday life for the many people. Our business idea supports this vision by offering a wide range of well-designed, functional home furnishing products at prices so low that as many people as possible will be to afford them. ” Nordstrom • “In store or online, wherever new opportunities arise, Nordstrom works relentlessly to give customers the most compelling shopping experience possible. The one constant? John W. Nordstrom’s founding philosophy: offer the customer the best possible service, selection, quality and value. ” 27

Learning Block 1, Overview Customer Satisfaction • What is “Bad” Customer Service? – Long wait times – Poor attitude – Inexperienced personnel – Prioritizing some customers over others – Employees that complain about the business • It is 6 -7 times more expensive to gain a new customer than it is to keep an existing one (White House Office of Consumer Affairs) • • • 78% of consumers have abandoned a transaction due to bad customer service experiences (American Express Survey 2011) Unhappy customers are highly unlikely to be repeat customers as 89% of customers report having stopped doing business with companies because of bad customer service (Right. Now Customer Experience Impact Report 2011) People are twice as likely to talk about bad customer service experiences than they are to talk about good experiences (2012 Global Customer Service Barometer) Source: American Express Survey, 2011 28

Learning Block 1, Unit 1: Customer Service Defined Customer service is the set of processes and supports an organization employs to create customer satisfaction. • Customer satisfaction creates loyal customers. Maintaining relationships with those customers is key for continued sales and repeat business. • Dissatisfied customers can serve as a roadblock to acquiring new customers and ultimately endanger the reputation of an entire organization. – Unhappy customers may turn immediately to social media and other means of communication to discourage others from doing business with the organization. 29

Learning Block 1, Unit 1 Know, Like and Trust Customer Service begins the first time customers learn about a particular organization, product, service or brand. – Reviews, Word-of-Mouth, Social Media – Advertising / Marketing – Location Customers buy from organizations that they know, like and trust. 30

Learning Block 1, Unit 1: Customer Service Defined • Customer service takes place before, during, and after a purchase. – Set of processes and supports an organization employs to create customer satisfaction. – How an organization interacts with its customers • In-person or remotely via phone, email, chat, etc. • Pre-sale guidance, assistance with product usage, handling of returns, maintenance • • Customer satisfaction creates loyal customers, maintaining relationships with those customers is key for continued sales and repeat business. – Organization’s reputation may be impacted positively or negatively by • Social media • Reviews • Company policies • Warranties / Guarantees Dedication to customer service should be part of the organization’s culture; it must be the responsibility of every employee during all customer interactions. 31

Learning Block 1, Unit 1: Customer Service Defined • Employees are crucial to customer service. Organizations must treat their employees well if they expect their employees to treat customers well. – Internal culture impacts customer service - what happens inside the organization is felt outside the organization. • Some companies’ management behavior and practices do not support or encourage good customer service. – Examples of poor customer service practices include • Restrictive company policies • Poor product warranties • Inadequate return policies • Outdated procedures in dealing with customer issues 32

Learning Block 1, Unit 1 Internal and External Customers Customer satisfaction should be the top priority of every company. • Customer service excellence is used to achieve customer satisfaction and applies to both internal and external customers. – Internal customers - people who work within a company – External customers - people who purchase goods or services from the company • Employees are ambassadors for their company – Presenting first impressions – Developing working relationships – Communicating personally and electronically • Elements of customer service in the supply chain include – Time – Dependability – Communication – Convenience 33

Learning Block 1, Unit 1 Buyer / Seller Interactions between sellers and buyers differ depending on the industry, product, or service as well as the organization’s marketing strategy. • Business to Consumer (B 2 C) - Business sells to end consumers – Apple sells an electronic device to an individual for personal use – Retail stores (Amazon, Wal-Mart, etc. ) sell to individuals • Business to Business (B 2 B) - Business sells to other businesses – Kraft sells packaged food products to grocery stores – Boeing sells airplanes to airlines and governments • Business to Government (B 2 G) – Subset of B 2 B focused on selling to public sector and government agencies Customer vs. Consumer • Depending on where your company sits within the supply chain, the consumer • may not be your purchaser. Consumer may not be the decision-maker 34

Learning Block 1, Unit 1 Characteristics of Good Customer Service • On-time delivery - Products and services delivered as promised • Politeness - Courteous, well-mannered interactions • Professionalism - Efficient, competent, and effective • Personalization - Skilled at making customers feel like special individuals • Quality - Providing products and services that meet customer specification(s) 35

Learning Block 1, Unit 1 Types of Customer Service • Call center - Company representatives work with customers and potential customers via telephone – – Take orders Provide product information Answer customer questions Handle warranty, service and return issues • Technical customer service - Company workers answer technical and other specialized questions – May address issues associated with repairing or replacing products – Provide diagnostic assistance – Educate customers on proper product usage • Customer service stations - Customers can go to these stations to return or exchange goods, ask questions, discuss issues, and ask for help with their shopping needs – Retail stores, kiosks, etc. 36

Learning Block 1, Unit 1 Types of Customer Service • Live chat - Usually a pop-up option on an Internet site, this creates a virtual method of immediate communication between customer and company without the need for a telephone • Email / Company Sponsored Forums – May not provide a rapid response, enables customers and companies to communicate and transfer information; especially useful for detailed customer service issues and issues requiring images (damaged parts, diagnostic readouts, etc. ) • In-person – Provides quick response and facilitates nonverbal communication to obtain better assessments of customer feelings 37

Learning Block 1, Unit 1 Effective Customer Service To be effective, customer service representatives must be trained and be proficient in the following processes: • • • Order process Customer relationship management (CRM) Communications Returns and reverse logistics Challenging customers Legal and regulatory concerns Key Customer Service Factors (Supply Chain Perspective) 1. Time - On time, as promised 2. Dependability – Safe, accurate, reliable 3. Communication – Before, during & after the transaction. Be Proactive! 4. Convenience – Ease of doing business, flexibility 38

Learning Block 1, Unit 1 Internal and External Customers Customer Satisfaction - Meeting Customer Expectations • Similarities and Differences Between Internal and External Customers – Similarities: • Set clear expectations • Communicate • Align incentives • Understand needs • Civility & Manners – Differences: • External customers usually have a choice and, if unsatisfied, can take their business elsewhere • Overall – Common Goals 39

Learning Block 1, Unit 1 Employees are Crucial to Customer Service • First Impressions Count! – And so does every other interaction – Image – appearance, attitude, knowledge, behavior, body language – Online (“E-Services”) – non-verbal cues not available so tone of voice, written communications, etc. take on greater importance • Video - “Culture is Priority One” - Tony Hsieh – https: //www. youtube. com/watch? v=-4 D 3 Rplqmy. U&nohtml 5=False – – Respect Communication Responsibility Reliability “Build a lifelong relationship…one call at a time” Tony Hsieh, Zappos 40

Learning Block 1, Unit 1 Internal Culture Impacts External Satisfaction • Employees are customers of the organization, their satisfaction impacts the organization’s ability to satisfy its external customers. External Customer Satisfaction High Low High Internal Customer Satisfaction Low Synergy Happy customers, happy employees Coercion You WILL be committed to customers, or else! Internal Euphoria Never mind the customer, what about that great free lunch? Alienation Unhappy customers, unhappy employees 41

Learning Block 1, Unit 1 Customer Service • Video - “The Zappos Brand & Customer Service” - Tony Hsieh – https: //www. youtube. com/watch? v=v. Apo. QPISmvs&nohtml 5=False 42

Learning Block 1, Unit 2: Customer Service Barriers Organizations don’t always invest in the people, training and organizational structure necessary to meet customer expectations. • Lack of proper training and staffing – Training helps to develop the skills and knowledge necessary to support customer inquiries and interactions, particularly in stressful or combative situations – Sufficient staffing is required to ensure that customers don’t experience lengthy wait times – Language and cultural differences – Video – Zootopia Customer Service - https: //www. youtube. com/watch? v=Tuni. FG 6 aj. GY • Insufficient authority to manage requests – Organizational structure and clear lines of authority – Majority of customer issues should be handled at the first line of support – Clear documentation of alternatives and escalation procedures • Inability to handle stressful environments – There should be a match between the employee’s temperament and the types of stress they are likely to encounter • Pre-sales customer support may require a very different temperament than post-sales support 43

Learning Block 1, Unit 2 Customer Service Barriers that are beyond the control of the service representative • • Management philosophy – making it difficult for customers with problems to contact the appropriate service representative Barriers that are within the control of the service representative • • • Impatience Laziness Poor attitude – Moody – Unfriendly – No phone number on the website – Computer prompts rather than live help • Unreliable equipment Restrictive or dated company policies Difficult-to-understand warranties or owner’s manual Insufficient authority Inadequate staffing Lack of adequate training • • • Poor communication skills – Language – Eye contact – Body language Poor time management Lack of product / service knowledge Inability to handle stress Racial, religious or other bias Unwilling or unable to identify root cause of customer’s problem 44

Learning Block 1, Unit 2 Customer Expectations Organizations should set customers’ expectations early in the relationship • Clear communication of company policies and processes – Returns, warranties, service – Shipping – Payment – Customer support should: • Follow processes and procedures to find the root cause of the problem • Keep calm, respectful, and empathetic • Assure the customer that they will do everything within their power to solve the problem as quickly as possible • Make it easy for the customer to have their issue resolved 45

Learning Block 1, Unit 2 Customer Expectations • Dependability /Consistency – both in product offerings and in product fulfillment • Communication - through each step in the order cycle • Convenience – ease of ordering, ease of communication • Accurate – information and orders • Timely – communication and delivery 46

Learning Block 1, Unit 3: Maintenance of Customer Relationships “The Customer is Always Right” • Catering to customer needs is the basis of any good customer relationship – Customer transactions should be geared toward serving customers well. – Devote time to customers before, during, and after sales transactions • Undivided attention • Make sure the customer knows that the organization values their business • Satisfied customers are likely to return for more products or services and recommend the company to others. • Post-sales support and service should ensure customers are satisfied with their purchases – Workers need to handle any negative issues that may arise after transactions quickly and efficiently. Remember - Customers create demand their values and expectations should drive the organization’s strategy and customer service relationships. 47

Learning Block 1, Unit 3 Technology and Customer Relationships Technology can assist in maintaining the customer relationship • Staying in contact with customers can improve customer relationships – Ensure that customers continue to buy products and services and that they are satisfied during and after a sale. – CRM software allows for the creation and maintenance of customer databases that can include contact information, mailing lists, and even notes about customers’ preferences. This data allows salespeople to better cater to their customers. • An organization’s online presence can also improve customer satisfaction as it allows the company to communicate important information rapidly. – Social media networks such as Twitter and Facebook can be used to present new products and services, novel marketing ideas, and answer questions from customers. • Companies also need to consider the power of social media for their customers, – Easy for customers to share their opinions, good or bad. • Positive comments can obviously help promote future business • Bad opinions can drive potential customers to competitors. Connecting with customers and maintaining good customer relations is generally the result of engaging in ongoing conversations with customers. 48

Learning Block 1, Unit 3 Technology and Customer Relationships Customer Relationship Technologies CRM Software Customer Databases Track demographics & preferences Email Software Pre / Post Sale Marketing & Service Salesforce, ACT, ERP Systems Mailchimp, Constant Contact Customer Service Databases Social Media FAQs, Product Documentation, Service Manuals New Product Introductions, Direct customer interactions, Ratings/Reviews Video Websites Product Features, Usage Instructions http: //www. willitblend. com/ Product Information, Customer Interaction (chat, forums) 49

Learning Block 1, Unit 4: The Customer Life Cycle (CLC) Identifying, gaining, managing, and keeping customers. Customer Life Cycle Management (CLM) Controlling all aspects of the customer life cycle. • Customer Life Cycle Management builds long-term value by ensuring that every part of an organization understands its particular role in serving customers well. • Responsiveness to customers guides both individual and organizational activities – Individuals are focused on improving immediate customer satisfaction, trained to capture information about future customer needs, and aware of when and how to interact with other departments – Individuals should be aware of and effective at meeting customer’s needs Focus – Meeting today’s customer demands while learning about and communicating future needs. 50

Learning Block 1, Unit 4 Customer Life Cycle Management (CLM) • CLM seeks to centralize all customer information and simplify systems so all parts of the company are contributing to – and using – a single source of customer information. – Systems are integrated to avoid any issues if departments like marketing, • sales, and operations do not share certain customer information with other functional groups. – When this information is shared and integrated automatically it can be used to serve customers in the best way. Organizations without CLM often have overlapping systems and databases, resulting in diminished customer experience due to delays and inaccuracies. Customer Service Marketing Sales Research & Development Order Fulfillment 51

Learning Block 1, Unit 4 Centralized Customer Life Cycle Management (CLM) Customer information is held in a Purchasing central database system which is integrated and accessible to all parts of the company Sales Marketing • Customer intelligence data Central • Demographics Customer Research & • Sales and marketing data Manufacturing Development Database • Support information • Demand planning Customer Order • Production planning Fulfillment Service • Purchasing • Advertising Finance 52

Learning Block 1, Unit 5: Customer Relationship Management (CRM) – Managing an organization’s interaction with current and potential future customers CRM Processes and Systems • Consolidate information about both prospects and customers • Collect data regarding sales, marketing effectiveness, and market trends. • Facilitate efficiency, cost reductions, increases in profitability • Streamline the sales and marketing processes Analysis of CRM data about provides insights which can be used to improve business relationships and customer retention. 53

Learning Block 1, Unit 5 CRM Strategy Key areas that should be understood when developing CRM strategies • Who are the customers? – Companies need to understand the people with whom they are building customer relationships. • Type of industry served • Relative number of customers reached • Range of products required by customers • Any special service arrangements with particular customers like after-hours delivery, delivery in non-standard quantities, etc. • How can both parties benefit from the relationship? – Companies need to understand how their customers expect to benefit from the relationship. This benefit will depend on the nature of the products and services companies provide and customers purchase. • For example, if customers are looking for support after normal business hours, then suppliers need to be able to provide this service while continuing to make a profit What you want Win What they want 54

Learning Block 1, Unit 5 Customer Relationship Management Strategy (CRM) Approach to managing all aspects of a company’s interaction with current and future customers • Methods used to manage customer contact information throughout the customer lifecycle Goal - Improved business relationships which will result in greater customer retention, profitability and sales growth. 55

Learning Block 1, Unit 5 Who Are the Customers? • Are they internal or external or both? • What types of relationships do they have with the organization and with each other? • What industries are served? • How many customers are there? • Are their customer segments that have different requirements? End User Marketing Distributors Stakeholders Quality Control Colleagues Purchaser Industries Locations Service Requirements 56

Learning Block 1, Unit 5 CRM Interactions • CRM includes interactions between organizations and their customers, including: – Technologies used to manage and analyze customer interactions and data throughout the customer life cycle (CLC) • • Contacts Sales leads Contracts Customers’ ongoing state of satisfaction Source: http: //www. netpromotersystem. com/resources/toolkit/interaction-prioritization. aspx CRM Goal Improve business relationships to assist in customer retention and drive sales. 57

Learning Block 1, Unit 5 People Build Relationships CRM systems support those relationships • Processes and systems should: – Allow quick and effective identification and resolution of customer-related issues – Facilitate improved relationships through effective, timely communication and a focus on responsiveness • For example, Salesforce. com, a CRM tool: – Allows customer service personnel to easily log, manage, and analyze all customer activity in one place – Supports continual monitoring of everything from sales leads and support tickets to channel marketing and website analytics. 58

Learning Block 1, Unit 5 CRM Processes & Systems • CRM processes and systems should be designed to lead to quick and effective identification and resolution of customer-related issues. – CRM improves customer relationships through effective, timely communication and a focus on responsiveness. • Salesforce. com is a leading CRM tool. It allows customer service personnel to easily log, manage, and analyze all customer activity in one place using a Web-based CRM software suite. – Customer service personnel can continually monitor everything from sales leads and support tickets to channel marketing and website analytics. – Analysis of data about customers’ history provides insights which can be used to improve business relationships with customers, specifically focusing on customer retention, and ultimately to drive sales growth People build relationships. CRM systems are designed to support their efforts. 59

Learning Block 1, Unit 5 Customer Relationships Should be Win-Win A mutually beneficial customer relationship is based on mutual respect and aims at establishing a win-win situation for both parties. • How can both parties benefit from the relationship? – What does the customer hope to accomplish? How do they envision the product or service helping them to reach those goals? – Who does the customer serve and what is important to THEIR customers? • Factors that increase likelihood at arriving at a win-win relationship – Courtesy and appreciation • Treat people (internal and external) how you would like to be treated. • Smile, make them feel comfortable • Thank them and show that you value the relationship – Interest and willingness to learn about the key drivers and important success factors for each party’s business – Trust 60

Learning Block 1, Unit 5 Understanding Business and Supply Chain Relationships are interactions between customers and suppliers over a period of time. Source - http: //www. i-scoop. eu/wp-content/uploads/2014/02/Digital-Touchpoints-source. gif 61

Learning Block 1, Unit 5 Technology Helps with CRM Technology helps organizations to manage and analyze customer interactions and data throughout the Customer Life Cycle • Contacts, sales leads, contracts, and customers’ ongoing state of satisfaction. GOAL: Improve business relationships, assist in customer retention and drive sales. Source - https: //static. woopra. com/website/v 7/images/features/profiles-thumb-v 2. png 62

Learning Block 1, Unit 5 Tools and Technologies Used in CRM systems and software help to manage customer relationships • Gather information and facilitate analyses of that information – – – – • • • Buying patterns Preferred means of shopping Types of transactions and amounts spent Points of contact (letters, sales calls, site visits) Responses to marketing campaigns Demographic data (language, location, family size, etc. ) Customer behavior and preferences Provide access to data across departments or even with partner firms Allow customers to access their transactions online Help communicate with customers – Personalized texts and emails – Social media – Targeted marketing and other communications (recalls, product information, etc. ) Effective CRM software provides an instant view of a company’s customers and prospects and all employee interactions with them. 63

Learning Block 1, Unit 5 Customer Intelligence and Profiles Organizations use customer intelligence data to perform analyses and make marketing, planning and other types of decisions. For example, a grocery store analyzed their customer base and found the following customer clusters and shopping patterns. Based on this analysis, the company was able to target relevant marketing campaigns to specific groups of customers. Source - http: //www. optimove. com/blog/customer-segmentation-for-more-effective-marketing 64

Learning Block 1, Unit 5 Types of Relationships Businesses segment their customers based on their sales, level of trust and customer service requirements. Strategic Collaborative Inc r eas Inc rea s ed Info ed Tru s rm atio t n. S har ing Strategic - Customers interact with suppliers as an extension of their own organizations Transactional Collaborative - suppliers and customers work closely on an ongoing basis for mutual benefit Transactional – Customers don’t purchase regularly and focus primarily on price 65

Learning Block 1, Unit 5 Different Types of Customers “Not All Customers are Created Equal” Customer Segmentation • • Divide the market into meaningful and measurable segments according to customers' needs, their past behaviors or their demographic profiles Determine the profit potential of each segment by analyzing the revenue and cost impacts of serving each segment Target segments according to their profit potential and the company's ability to serve them in a proprietary way Develop Customer Strategies to address the needs of each segment – For example: • B 2 B vs. B 2 C • E-Commerce vs. Stores vs. Wholesale • Urban vs. suburban vs. rural • Gender, age, other demographics Retail E-Commerce Direct Mail Wholesale 66

Learning Block 1, Unit 5 Types of Customer Relationships Transactional Collaborative • “Arm’s length” • Price driven • Limited communication and trust • Mutual benefit • Level of trust • Work together in some areas Strategic • Close cooperation • Close relationships • Frequent communication Increased Trust, Communication & Information Sharing • • • Transactional - Firms only interact for purchases - limited communication, few personal contacts. Customers monitor the quality of incoming items. Suppliers may be inflexible in responding to customers’ requirements. No sharing of forecasts and other types of planning information, potential expense of expediting orders and monitoring quality. Collaborative – More interaction and some personal relationships. Companies work together to increase savings and further innovations. Companies may share information and participate in collaborative planning projects. May be more difficult to switch suppliers if problems arise. Strategic – Close cooperation and beneficial relationships to achieve mutual advantage for both the firms and the specific people involved. Reduced uncertainty, improved communication, increased loyalty, and enhanced business performance by all parties working together. However, may require significant resource commitments and the need to share intellectual property and information relating to finances, strategy, planning, and goals. 67

Learning Block 1, Unit 5 Business Impact of Customer Relationships As relationships improve, business impact becomes more significant. Supplier Relationship Transactional c gi e t a Partnership Str pe o Co e iv rat al n io t ac s n a Tr Low Vendor Key Supplier Business Impact Partner High Vendor – Price is key, little differentiation between products, low margins, little loyalty Key Supplier – Quality, on time to specification, adding value, reducing costs, providing expertise Partner – Shared trust, information, goals, risks/benefits, provide world-class products and services 68

Learning Block 1, Unit 6: Service Performance Metrics Key Performance Indicators (KPIs) should be based on good communication and a common understanding between suppliers and customers of what will be assessed and how it will be measured. Performance metrics that help drive excellent customer service are important in helping achieve customer satisfaction and greater business success. Common metrics useful ways of examining and improving logistics and supply chain performance: Delivery • On-time delivery/receipt • Order cycle time • Response time Costs • Total delivered costs • Costs of goods • Transportation costs • Inventory carrying costs • Material handling costs Quality • Perfect order fulfillment • Complete order • Accurate product selection • Damage-free • Accurate invoices 69

Learning Block 1, Unit 6 Customer Service Performance Metrics As with other areas of the supply chain, it is important to establish Customer Service performance metrics. Depending on the type of organization, those metrics might include: • Perfect Order Percentage – Orders Delivered On Time, As Promised • Product Performance - Defect Rate, Returns, Warranty Claims, Product Reviews • Call Handling – First Call Resolution, Call Abandon Rate, Speed to Answer • Culture - Employee Satisfaction, Turnover 70

Learning Block 1, Summary Customer Service Overview Summary • • Customer Relationship Management (CRM) – Accumulating information about customers, sales, marketing effectiveness, responsiveness, and market trends in order to improve customer service, increase efficiency, reduce costs, increase overall profitability, and help improve and streamline sales and marketing processes. Types of business relationship range from distant transactional relationships to strategic alliances. Measures for assessing service performance should be based on a common understanding of what will be assessed and how it will be measured. – Time, quality and cost Customer Lifecycle Management (CLM) - identifying, gaining, managing, and keeping customers. 71

Learning Block 2 COMMUNICATION SKILLS IN CUSTOMER SERVICE 72

Learning Block 2, Objectives Learning Block 2 Objectives Upon completing this learning block, the learner will be able to: • Understand how to describe the communication activities related to customer service • Identify and describe various communication methods and their characteristics • Interpret guidelines for effective communication in customer service • Recognize the key barriers to effective communication and how to overcome them 73

Learning Block 2, Overview Communication Skills in Customer Service Learning Block 2 Description • Overview of communication skills and communication processes used to provide excellent customer service before, during, after a sale. • Forms of communication – Written – Oral / Listening – Nonverbal – Visual • Barriers to communication • Guidelines for managing challenging customers 74

Learning Block 2, Unit 1: Communication • Transfer of information; imparting or exchanging of information or news – Means of connection between people or places 75

Learning Block 2, Unit 1 Effective Communications Communication - transaction between two or more people • Speaker transmits a message and • • must ensure that the message is delivered clearly. Listener takes delivery of the message and must be an active listener. Effective communication takes place only when the listener clearly understands the message that the speaker intended to send. – Verbal / Listening – Nonverbal – Written – Visual WHO? Audience HOW? Tactics WHY? Goals WHAT? Message CONFIRM? Feedback Video - The Art of Effective Communication (23: 43) - https: //www. youtube. com/watch? v=me. Lb. Mg 7 y. SU 4 76

Learning Block 2, Unit 1 Communication – Transfer of Information • Communication involves sending and receiving information through different methods. Messages may be directed to one or more receivers. More than one method may occur at one time. – – • Written communication Oral communication Nonverbal communication Visual communication Effective communicators understand to whom they are communicating, the message they communicate, and the most appropriate form of communication. – Some messages are best communicated in writing while other messages are best communicated orally. • Sometimes, both are appropriate, depending on the situation and the types of message being conveyed. • Communicators should obtain feedback from receivers of the information to ensure effective communication has taken place. 77

Learning Block 2, Unit 1 Audience, Message and Goals • Tailor the communication style and method to your audience, type of message, and goals. • Multiple methods may be appropriate, depending on the situation and the types of message being conveyed. • To ensure effective communication has taken place, it is good for communicators to obtain feedback from receivers of the information. Meetings Emails One-on-One Presentations Training Actions Body Language Visual Aids Tone of Voice Listening Acting/ Gestures Humor Atmosphere Social Media Telephone Language 78

Learning Block 2, Unit 2 Communication Channels • Communication channel - term used to describe the method of communication used. • There are many ways to communicate in business today, including emails, voicemails, phones, texts, instant messaging chats, and social media. It is crucial to choose the appropriate communication channel for each type of communication. – Written communication is best used for conveying messages to large groups of people if little to no interaction is required. – Oral communication is best for communicating more complex messages that require direct feedback. – Many people receive messages better in oral or written form, while others prefer visual messages that included charts, images, and graphs. Image source - http: //ineffable-words. com/what-is-a-communicationchannel/ 79

Learning Block 2, Unit 2 - Extra Meetings Emails One-on-One Presentations Training Actions Body Language Visual Aids Tone of Voice Listening Acting/ Gestures Humor Atmosphere Social Media Telephone Language Communication Processes Situation Visual Auditory Kinesthetic (Physical) Reading / Writing People learn in different ways. It is crucial to choose the appropriate communication channel for each type of communication. 80

Learning Block 2, Unit 2 Written Communication • Excellent writing skills are important for communicating well in business because they can help send messages to far larger audiences than would ever be possible through in-person or telephone conversations. – – – • • • Correct grammar, spelling, and punctuation Accurate Concise Straightforward Courteous Source: https: //www. kent. ac. uk/careers/pics/application-form. GIF Written messages can be edited, stored and revised prior to delivery and allow the recipient to review and reflect prior to responding. Permanent record that can be stored for future reference All recipients receive the same message Effective writing allows readers to understand rapidly and thoroughly everything that is being communicated. 81

Learning Block 2, Unit 2 Verbal Communication • • Oral communication - using the spoken word to deliver messages – Quick – Flexible – Interactive – Inexpensive – Can be very powerful and persuasive – Helps to develop a relationship Disadvantages – Misunderstandings – Impermanent (unless recorded) – Requires attentiveness and receptivity on the part of the audience – Body language, tone of voice, eye contact, appearance may influence the message impact – Difficult to revise, possibility of mistakes – Audience may not retain information – Language barriers 82

Learning Block 2, Unit 2 - Extra Structure, Style and Content Applies to both written and verbal communication • Structure - the way the content is laid out or presented – – – • Clarify your thoughts and the purpose of the communication Identify the key points and decide on a logical order Compose a strong introduction and ending Use short paragraphs and sentences Use headings and graphics to help key points stand out Style - the way it is delivered – Choose a style appropriate to your audience – Formal or informal – Technical or simple language • Content - what you are writing or speaking about – – Make your points clearly and logically If written - check spelling, punctuation and grammar Focus on the most important issues Use precise language 83

Learning Block 2, Unit 2 Listening Communication • Listening – ability to accurately receive and interpret auditory messages – Effective listening requires an active effort to understand • Listen for the meanings behind their words – Pay attention not only to the words, but also to the use of language, tone of voice, and how the other person uses his or her body. – Make eye contact with the speaker (if possible) – Consider your body language – does it show the speaker that you are interested? – Avoid using electronics unless requested by the speaker • Keep an open mind – Ask open-ended questions • Seek clarification whenever messages are not understood • Know when to be silent – Don’t interrupt – wait for a pause • Avoid roadblocks to effective listening such as having pre-conceived ideas, thinking ahead, and thinking of topics not connected to those being discussed 84

Learning Block 2, Unit 2 Listening Skills Look interested, lean forward Involve yourself by responding, nod your head Sit up Track the speaker with your eyes Evaluate the message, test your Active Listener - Understands what is being conveyed, engages with the speaker and considers the content (e. g. How can the listener apply what they’ve learned? ) Passive Listener - Hears what is being said without necessarily retaining information. Fades out of a conversation because they become distracted or disinterested. understanding Neutralize your feelings/opinions 85

Learning Block 2, Unit 2 Nonverbal Communication The way people listen, look, move, and react sends messages. Nonverbal communication can send a much clearer message than oral communication; it includes hand gestures, facial expressions, and tone of voice. • When nonverbal signals are paired well with spoken words, trust, clarity, and rapport can all increase; however, when nonverbal signals do not pair well with what is said, tension, confusion, and even mistrust can develop. • Video – Ted. X Body language, the power is in the palm of your hands (1: 29) - https: //www. youtube. com/watch? v=8 Zv 5 dc-nnug 93% of what we communicate with others is non-verbal!* *Source: “Secrets of Body Language History Channel 86

Learning Block 2, Unit 2 Visual Communication Visual communication – communication of ideas through the visual display • • • Images used to persuade, entertain, and inform Signs, photographs, charts, graphs, diagrams, televisions, DVDs, emoji’s, etc. Color, words, numbers, typography, images can all be used to convey information as well as influence the response of the viewer 87

Learning Block 2, Unit 3: Barriers to Communication • Information is often misunderstood because of barriers to communication, which cause people to see and hear things differently than others do. – Multiple barriers can be present at the same time for both senders and receivers. • Common barriers to communication include: – Use of unfamiliar terms - Simple, clear terms should be used instead of ambiguous words and jargon-filled language – Lack of attention from receivers - Receivers of information and communication should focus on listening to what is being communicated – Language differences - Using interpreters can help communicators overcome language differences. If hiring interpreters is impossible, then using simple, direct language is crucial – Differences in views or perceptions - Communicators should be sensitive to this barrier and attempt to communicate so even those with different views and experiences can understand messages – Cultural differences - Cultural backgrounds influence the way people think and communicate, so it is important to be aware of these differences and adjust communication styles and content accordingly – Preconceived ideas and notions - When communicating with others, preconceived notions can affect the outcome of conversations, so communicators should keep this in mind when communicating and avoid allowing these notions to influence their thoughts • When communicating, it is important to be aware of these barriers to effective communication and look for ways to overcome them. 88

Learning Block 2, Unit 3 - Extra Barriers to Communication When preparing, try to anticipate barriers and look for ways to overcome them. Interpersonal Presentation skills, tone of voice and prior relationship between presenter and audience can influence the success of the communication. Linguistic Use simple, clear terms so even non-native speakers can understand. Avoid technical terms unless speaking to a technical audience. Physical Hearing or visually impaired people may need special accommodations. Also, your physical appearance may affect your message. Cultural Be sensitive to cultural backgrounds that may influence your audience’s receptivity and understanding. Organizational structure may prevent targeted communications. The audience may not be in the position to act on the message. Environmental Noise, poor lighting, temperature, uncomfortable setting, equipment failure, etc. may make communication difficult. Attitudinal Pre-conceived opinions, biases and differences in views can present barriers to communication and understanding. Emotional Personal experience / temperament influence audience reaction. Emotion can draw audiences in or can result in rejection of the message. Content Avoid unorganized, excessively word or uninteresting content. When appropriate, humor can help keep an audience’s focus on message. Listening Communication is a partnership and relies on active listeners as well as proficient presenters. 89

Learning Block 2, Unit 4: Guidelines for Effective Communication • Communicating effectively requires different efforts from various parties: receivers of communication should focus on what is being communicated, while senders of communication should always think about how the messages they are sending might be received. Clear communication can help avoid misunderstandings and potential conflicts. Use of Words • Using specific, full, and substantive words is important; it can even make or break a relationship with a customer. • It is also important to communicate using words that are positive, optimistic, and constructive, like can and will; these types of words show confidence and helpfulness. Negative words and phrases like can’t or won’t express the opposite. For example, instead of saying, “We can’t get XYZ done in time if ABC doesn’t get here soon, ” a more appropriate expression would be, “As long ABC arrives on time, then XYZ can be completed on schedule. ” 90

Learning Block 2, Unit 4 - Extra Effective Communication Requires Effort • Effective communication requires effort from both parties: – Receivers should focus on what is being communicated, while – Senders should think about how their messages might be received. • Clear communication can help avoid misunderstandings and conflicts. That’s a “ 6”! NO! That’s a “ 9”! 91

Learning Block 2, Unit 4 - Extra Use of Words Effective language is: • Concrete and specific – Descriptions create tangible images with details the reader can visualize. • Concise, straightforward and to-to-point – Eliminate “filler” words and re-phrase sentences to reduce wordiness • Familiar – To build a sense of commonality, use language that is familiar to the audience • Precise and clear – Terms can vary widely in their meanings to different people. Use relative terms and compare to something known to the audience. • Constructive – People become defensive if destructive language blames or criticizes them. – Try to use words that are positive, optimistic, and constructive • Appropriately formal – Language use should match the situation and the relationship between the presenter and the audience 92

Learning Block 2, Unit 4 - Extra Use of Words - Discussion • “He is a bad roommate. ” – How can this statement be made more concrete and specific? • "Before making a decision about whether the person on trial is guilty or innocent in this case. . . " – Can you reword this phrase to be more concise, straightforward and to-the-point? • “Is the Acura expensive. ” – Words like “expensive” are relative. Can you answer this question clearly? • “We can’t get XYZ done in time if ABC doesn’t get here soon, ” – How could you change the use of language to make this statement more constructive? • “Pardon me, but would you be so kind as to pass the peas? ” – Would you speak this way at home with your family? How about at a business dinner or a dinner at the White House? 93

Learning Block 2, Unit 5: Management of Challenging Customers Every company has to deal with challenging customers, most fall into one of the following categories: • • • Individuals who are angry or openly antagonistic and aggressive Individuals who lack good communication skills and the ability to express their thoughts Individuals who have an attitude of arrogance or supremacy Individuals who personally attack others—usually employees, but sometimes other customers Individuals who are overly talkative and/or unwilling to listen Good customer service is vital for virtually every company’s success. Training and temperament go a long way in helping employees deal with even the most challenging customers. 94

Learning Block 2, Unit 5 Challenging Customers • Customer service representatives must use caution to defuse each situation and keep the focus on a win-win, positive outcome. Dealing with Upset Customers Begin with a positive attitude and remain calm Let the customer vent, don’t take it personally Be empathetic, sympathize Demonstrate your understanding, apologize Begin active problem solving 95

Learning Block 2, Unit 5 Preventing Challenging Customer Interactions Customer service representatives should avoid unintentionally creating challenging customer interactions. • • • Try not to make customers wait Don’t share your mood or personal frustrations Try to remember the names and preferences of loyal customers. Make all customers feel welcome. Don’t make negative comments or smart remarks; strive to be positive and professional at all times. Thank them - for their understanding, for waiting and for their business Video – James Lloyd: Customer Service (9: 35) - https: //www. youtube. com/watch? v=C_VOMik. Vw. JA Remember – You cannot control your customer’s behavior but you CAN control your response to their behavior. 96

Learning Block 2, Unit 5 Listening to Customers Listening is an active, learned process • Video – Julian Treasure: 5 ways to listen better (7: 50) – https: //www. youtube. com/watch? v=c. Sohjl. YQI 2 A • Listening well must be practiced – Video – Active Listening – Clip 1 (4: 01) - https: //www. youtube. com/watch? v=Qota. Ts. Vi. Az. E – Video – Everybody Loves Raymond – Active Listening (2: 58) - https: //www. youtube. com/watch? v=4 VOub. VB 4 CTU When service or product failure occurs, emotions become heightened — customers will likely care as much or more about how they are treated as they do about the outcome itself. 97

Learning Block 2, Unit 5 Key Steps to Customer Issue Resolution As a consumer, sometimes the most frustrating aspect of a service failure isn’t the problem, but rather the organization’s inability to fix the problem. Key steps to customer issue resolution: • Listen - Let customers speak without interruption • Acknowledge - Demonstrate understanding and apologize for the situation; customers who want attention and understanding will be more receptive to solutions if they receive it • Solve - Offer customers real solutions and let them know what can be done for them instead of dwelling on what cannot be done • Thank - Thank customers for shopping; if they are satisfied, they will share word of your efforts Issue resolution is an opportunity for the organization to strengthen their relationship with the customer. 98

Learning Block 2, Unit 5 H. E. A. R. D. Technique (Disney Institute) “At Disney, we recognize that a service failure may not always be our fault, but it is our problem. “ q Hear - Let the customer tell their entire story without interruption. q q Sometimes, we just want someone to listen. Empathize - Convey that you deeply understand how the customer feels. Use phrases like “I’d be frustrated, too. ” Apologize - As long as its sincere, you can’t apologize enough. Even if you didn’t do whatever made them upset, you can genuinely be apologetic for the way your customer feels (e. g. I’m always sorry that a customer feels upset). Resolve - Resolve the issue quickly or make sure that your employees are empowered to do so. Don’t be afraid to ask the customer: “what can I do to make this right? ” Diagnose - Get to the bottom of why the issue occurred, without blaming anyone; focus on fixing the process so that it doesn’t happen again. Source - https: //disneyinstitute. com/blog/2013/08/how-disney-leaders-recover-from-a-service-failure/187/ 99

Learning Block 2, Unit 5 Issue Management Plan Each customer issue or complaint must be documented so that an issue management plan can be developed. • Issue Management Plan - Series of investigations and actions on the part of customer service representatives. – Specifies how issue escalations will be handled with supervisors and managers and how customers will be dealt with throughout the issue management cycle – Goal - Issues are identified, evaluated and assigned for resolution • Issue Management Cycle - Steps from identifying an issue to resolving that issue. Obtain / Review Issue Data Measure Potential Impact & Risk Identify Root Cause Points of Failure Implement Fixes & Corrections 100

Learning Block 2, Summary Learning Block 2 Summary • Communication - movement of information among people and places. – Communication channel - a particular method of communication. – Effective communicators understand with whom they are communicating, the messages they communicate, and the most appropriate form of communication. • Oral communication - using the spoken word to convey messages. – Effective listening requires an active effort to understand others. – A basic awareness of nonverbal communication and how to interpret it can help improve interactions. • Excellent writing skills are important because they can help send messages to far larger audiences than is possible through in-person or telephone conversations. • Visual communication - using images to persuade, entertain, inform, and enlighten customers or potential customers about products, ideas, and messages. • Information is often misunderstood because of barriers to communication, which cause people to see and hear things differently than others do. – Common barriers to communication include language differences, cultural differences, and preconceived notions. 101

Learning Block 3 THE ORDER PROCESS 102

Learning Block 3, Objectives Learning Block 3 Objectives Upon completing this learning block, the learner will be able to: • Demonstrate knowledge of the overall order management process • Understand how order management and order processing is accomplished • Recognize how firms track and monitor orders throughout the supply chain • Execute the steps in the order fulfillment process • Implement key aspects of using different technologies, systems, and tools in the order process • Evaluate the impact of effective customer service, especially in issue resolution • Create good practices for the order process 103

Learning Block 3, Overview Learning Block 3: The Order Process Learning Block 3 Description • Order process • Role of customer service in executing customer orders – Understanding how orders are handled and fulfilled – Managing customer relationships • Overview of procedures, processes, and strategies that are part of the order management process • Systems used in placing, tracking, managing, and fulfilling orders 104

Learning Block 3, Overview The Order Process • Receiving and fulfilling customer orders • Managing the flow of information, products/services and customer relationships Information Flows in Both Directions Customer Inquiry Order Received Process Order Prepare Shipment Order Delivered Aftersales Support The process starts with a customer request and may be followed by requests for follow-up information at any point prior to or during the order process. Information flows in both directions – from the customer throughout the supply chain. 105

Learning Block 3, Unit 1: Systems and Technologies Inquiries Orders Renewals Subscriptions Payments Customers Employees Availability Status Updates Notifications Product Information The order management process starts with the customer request, call, email, letter or arrival. • Information requests may be general or very specific and may arrive electronically (email, social media, etc. ) or via phone, mail or in person. These requests may result in orders, requests for samples or additional information. – Product specifications – Price • – Availability – Potential discounts Orders may be placed verbally, manually (written) or via the internet or EDI. Depending on the placement method, orders may need to be entered manually or may update the organization’s order management systems automatically. – For example, Internet orders are automatically entered into the order management system. 106

Learning Block 3, Unit 1 Order Management Systems (OMS) • Order Management Systems (OMS) support the order process through automation. – Provide constantly updated inventory information – Contain a databases • Vendors • Customers • Order History – Customer returns and refunds – Billing and payment information – Order processing records • General ledger information • Benefits of a strong OMS include: – – – Improved sales visibility Better customer relations Reduced order fulfillment costs Minimal order delays and backorders Increased customer satisfaction Source: https: //thumbs. dreamstime. com/x/vector-illustrationorder-management-life-cycle-concept-end-to-end-process 66724226. jpg 107

Learning Block 3, Unit 1 E-commerce Order Management • E-commerce - Selling and buying goods and services by using the Internet to transmit information and transfer funds. Source - http: //www. softwareadvice. com/scm/industryview/order-management-report-2015/ 108

Learning Block 3, Unit 1 Order Management Technology can not only support the entire order process from beginning to end but also ensure effective and efficient return processes for customers. • Technology helps support the order management process: – – – Telephone, fax, and mail Internet Electronic data interchange (EDI) Bar-coding Point of sale (POS) technology Order Management Systems (OMS) Source - http: //www. musthavemenus. com/blog/wpcontent/uploads/2016/01/savetimeorderonline. jpg Source - https: //www. eternityrose. com/media/wysiwyg/Old. Site/binoculars. gif 109

Learning Block 3, Unit 1 Telephone, Fax, Mail and Internet • Telephone, fax, and mail – Telephone is heavily used for communication and business purposes – Fax and mail (for order management) are less common and have been superseded by the Internet and other technologies • Internet – Worldwide system of networks linked by different technologies – Often used for placing and tracking orders – Internet interactions between sellers and buyers can vary widely, depending on industries, products, and services. • B 2 C - businesses sell to end consumers • B 2 B - businesses sell to other businesses • Many organizations sell to consumers, businesses and other organizations 110

Learning Block 3, Unit 1 Electronic Data Interchange (EDI) • Electronic Data Interchange (EDI) – the computer-to-computer interchange of strictly formatted messages that represent documents, such as Purchase Orders, Manifests, etc. – Direct exchange of information between computers – EDI documents are not normally intended for human interpretation – Messages follow strict formats designed to be independent of the method of communication Trading Partners include: Customers Stores Shipping Companies Manufacturer’s Freight Forwarders 111

Learning Block 3, Unit 1 Bar-coding Barcodes present information in visual patterns machines can read. Bar codes are attached to products or product packages and provide a unique way to identify that particular item. Two-dimensional bar codes that use black and white squares instead of lines are used to store URLs and other information. Radio Frequency Identification Device (RFID) Tags automatically identify and track tags attached to products and product packages, wirelessly using electromagnetic fields to transfer data. Used both in warehouses and stores. • Many companies use barcodes in stores, at checkout counters, and throughout their supply chains. Barcodes are used in virtually all areas throughout the supply chain, such as vehicle manufacturing, document tracking, time control, and security access. 112

Point of Sale (POS) Technology Learning Block 3, Unit 1 • Point of Sale (POS) technology streamlines the checkout process – Checkout - where sales transactions are completed and where customers make payments and take receipt of purchases. – Scales, scanners, and electronic and manual cash registers may be used in conjunction with POS technology • The POS system translates scanned or manually entered information into product prices and descriptions. – Depending on the system, the information may appear on a screen at the register and may be printed out on receipts. – POS systems are often used to update financial and inventory records as goods are sold; this information is relayed to other parts of organizations, including warehouses and supplier contacts. 113

Learning Block 3, Unit 2: Customer Orders • • The order process begins when customers interact with businesses such as a retailer, wholesaler, or provider of materials and includes work directly involved in receiving and fulfilling customers’ orders. Different types of organizations have different order processes – The process will be customized to fit the specific supply chain and set of products or services offered by the organization. • Normally, customers begin the order cycle and the organization focuses on fulfilling customer demand. Customer Request/Arrival Customer Order Invoice Customer Order Entry Note – some businesses require full or partial payment prior to order processing. Customer Order Receipt Customer Order Fulfillment 114

Learning Block 3, Unit 2 - Extra Order Management Process Different types of businesses have different processes Made-to-Order Engineered-to-Order 115

Learning Block 3, Unit 2 - Extra Processing Orders Source - https: //www. sleeter. com/blog/2014/01/inventory-cycle-in-quickbooks/ 116

Learning Block 3, Unit 2 Customer Request/Arrival • Order management begins when the customer arrives at a purchase point or informational location – Counter, store, drive-thru window, telephone call, website, tradeshow, etc. – Information required includes pricing, product specifications, availability, delivery timelines, etc. – Companies may customize their websites with portals for specific customers • Business to Consumer (B 2 C) – Customer calls, lands on a webpage or physically arrives – Sales representative initiates contact and visits or calls customers to discuss their needs (Avon, telephone marketing) • Business to Business (B 2 B) – Customer calls, lands on a webpage or physically arrives – Sales representative initiates contact and visits or calls customers to discuss their needs (Pharmaceutical reps, telephone marketing) – Customer visits a tradeshow, showroom or distribution center and places an order Whether companies are involved in B 2 C or B 2 B supply chains, the main objective of the customer request/arrival process is to ensure customers are treated with courtesy and assisted in an efficient manner. 117

Learning Block 3, Unit 2 The Order Process • Order fulfillment starts when the order is placed by the customer – At the warehouse, DC or fulfillment center, pick lists are generated and the fulfillment process begins • Orders can come from retail stores, other DCs, manufacturing companies, or directly from end users. – Orders specify a unique part or item number, quantity, color, other unique attributes, and a delivery date. – Orders are received via mail, telephone, fax, email, internet, EDI, etc. 118

Learning Block 3, Unit 2 Customer Order Entry • Order entry occurs when the customer informs the retailer/supplier they are ready to purchase – Primary goal - ensure the order is accurate, carried out in a timely fashion, and communicated throughout the supply chain • Required information includes • Which products • How many – Additional information may include • • • Expected/desired delivery date(s) Expected/desired delivery location(s) Method(s) of transport Custom options Payment method The main aim of the order entry process for customers is to ensure the order is accurate, carried out in a timely fashion, and communicated throughout the supply chain 119

Learning Block 3, Unit 2 Customer Order Fulfillment Customer order fulfillment includes the steps necessary to ensure that customers receive the correct products in the right quantities at the scheduled time and at an appropriate level of quality. • Order Fulfillment Objective - Completing orders while satisfying promised delivery dates at the right quantities and conditions, all while managing total costs. – – • Correct products Right quantities At the scheduled time Appropriate level of quality Failure to meet any of these criteria will result in an order that is less than perfect Entering Invoicing Tracking Returns Filling Shipping After-Sale Services Remember – not all supply chains require all steps. Filling a fast food order is significantly different than filling an e-commerce order or an order for a custom yacht. 120

Learning Block 3, Unit 2 Zappos Order Fulfillment Video – Visit to the Zappos Warehouse in Kentucky (2: 16) https: //www. youtube. com/watch? v=_i. Sw. FVMtn-g Video – Zappos & UPS (4: 40) - https: //www. youtube. com/watch? v=T 1 Twt 8 Mha. UQ 121

Learning Block 3, Unit 2 The Perfect Order At the Right Time The Right Product To the Right Customer In the Right Condition At the Right Place At the Right Cost In the Right Quantity The Perfect Order 100% accuracy according to every customer service requirement 122

Learning Block 3, Unit 2 Order Receipt by the Customer • Order Receipt - Receiving and accepting products and/or services that were ordered – Almost every organization is both a customer and a supplier so there always two sides to the receiving process. • Customers need to check the quantity and quality of delivered products – Incomplete or damaged orders - details will be recorded and suppliers notified. Customers may withhold payment until deficiencies are corrected. – Customers may also require a corrective action report from the supplier to indicate the deficiencies that occurred and the corrective actions taken. – Customers then record that they received their correct orders in the correct quantities. Customer Activities Order Product Monito r Fulfillm ent Schedul e carrier Unload vehicle Identify product Inspect for damag e Compa re to PO File claims (if necess ary) Update records 123

Learning Block 3, Unit 2 - Extra Warehouse Receiving – Process of moving product from the transportation vehicles into the warehouse. • Carrier appointments may be required. • Shipment is matched against the shipping documentation and signed for. Shipment may also be matched against the original Purchase Order. • Discrepancies are noted and reported to either the shipper or carrier, depending on the situation • As products are unloaded, they counted, inspected, labeled, and sent to storage. • Important paperwork – Packing list – detailed contents of the shipping container – Bill of Lading • CONTRACT between the carrier and the shipper for the transportation of the goods • RECEIPT issued by the carrier to a shipper for goods received for transportation • Evidence of TITLE to the goods in case of a dispute. 124

Learning Block 3, Unit 2 Customer Order Invoices When customers place orders, they receive an invoice. Invoice format and delivery method varies by company, type of business and payment method. Invoices normally accompany the goods, regardless of whether they are shipped to customers or purchased in person. 125

Learning Block 3, Unit 2 Customer Order Invoices • When orders are shipped to customers, paper invoices normally accompany the goods. • Invoices state – Amount owed – Payment terms • Number of days customers have to pay the invoice – Any reductions for paying early – Penalties for late payment – Form of payment required • When invoices are received by customers, they are checked against the stipulated terms and conditions and paid or queried accordingly. Amount Owed Payment Terms 126

Learning Block 3, Unit 2 P-Cards • P-Cards – form of company charge card that allows goods and services to be purchased without using traditional purchasing processes. – Eliminate the need to issue invoices for payment – Typically used to purchase goods and services with low product values. – Often used in a B 2 B, educational or government environment 127

Learning Block 3, Unit 3: Order Tracking and Monitoring Order flow from customers placing their order to customers receiving their orders and providing feedback Figure 4. Order tracking and monitoring. Developed by LINCS Consortium. 128

Learning Block 3, Unit 3 Customer Service Representatives • • Customer service occurs throughout the organization. Many people without the title of “Customer Service Representative” are responsible for customer service. Organizations define the roles and responsibility of “Customer Service Representatives” according to their specific culture, product and customer needs. 129

Learning Block 3, Unit 3 Basic Responsibilities • Customer Service Representatives (CSRs) are generally responsible for order tracking and follow up to ensure that customers receive a “perfect order” – If issues arise, then customer service representatives are responsible for following up within their organization and with their customer to resolve these issues. • Handling returns • Issues price adjustments or refunds • Processing replacements or service tickets • Tracking and expediting shipments 130

Learning Block 3, Unit 4: Order Process Improvements and Metrics Companies that excel at customer order fulfillment minimize activities that are wasteful and add little or no value by redesigning their processes. Example: A small U. S. based cable and wiring company saw customers migrating toward new foreign competitors. • Rather than move to China, the company redesigned its supply chain: Ø Increased volume flexibility Ø Continued to produce high-quality products Ø Reduced order fulfillment lead times (from 20 days to 12 days) • Volume flexibility and shorter lead times allowed their customers to narrow their planning horizons The redesign eliminated waste and minimized non-value added activities, resulting in costs being lowered across the supply chain instead of being shifted from one part of it to another. 131

Learning Block 3, Unit 4 Metrics Metric – A standard of measure that • • Captures performance in terms of how something is being done relative to a standard Supports business strategy Is clearly defined and can be measured / quantified Allows for actionable responses Many customer service qualities are not easily measured. Source: http: //contact-centres. com/wp-content/uploads/2015/12/metrics. image_. dec_. 20151. png 132

Learning Block 3, Unit 4 Information Systems and Order Fulfillment • Accurate inventory records are essential to proper planning, avoiding backorders and making sure that the organization is able to fulfill the orders that it receives. In addition, these systems: – Recognize when a customer has bought a product, updating the product inventory records appropriately. – Based on the customer order, create assembly or manufacturing work orders, bills of materials and other production-related documents – Retrieve item storage locations for pick tickets and then track the inventory until the order is complete. – Direct replenishment , ensuring that products are on the store shelves in just the right quantity Order Entry Order Processing Order Fulfillment Order Shipping • Confirm items ordered are available. • Allocate item quantity to specific order. • Update inventory available. • Update order and item status. • Confirm credit/payment status. • Send customer confirmation. • Update order and item status. • Track inventory and order throughout fulfillment process. • Update order and item status. • Update financial systems. • Send shipping information to customer. Inventory System 133

Learning Block 3, Unit 4 Inventory Systems Assist with Order Fulfillment The inventory control system can help locate the items in the warehouse, it can encode shipping information like tracking numbers and delivery addresses, and it can remove these purchased items from the inventory tally to keep an accurate count of in-stock items, ideally in real-time. 134

Learning Block 3, Unit 4 Order Fulfillment Performance Metrics Fulfillment leaders have Key Performance Indicators (KPIs) focused directly on how well they meet customer order expectations and achieve a perfect order - delivered to the right place, at the right time, in the right condition, in the right package, in the right quantity, with the right documentation, and with the right invoice. With the Right Invoice • Order fill rate - % of orders • Order cycle time – Period • filled from stock on hand (no backorders or substitutions) • between order receipt and order shipment (may be defined differently based on the organization) On-time delivery – % of orders delivered to customers on time and in full Inventory accuracy – Comparison between the system’s records and the physical counts • Order-to-cash cycle time – Period from when order is received until it is fulfilled and payment collected 135

Learning Block 3, Unit 4 Examples of Key Metrics should focus on customer needs and expectations. • Order-picking errors - Wrong items or incorrect quantities picked • Product shipping errors - Incorrect items or incorrect quantities are shipped • Standard or planned order cycle time - Total time from when orders are received until orders are shipped • Average time to complete an order - Average time that it takes for an order to be completed from the time it is received until the time it is shipped • Number of orders returned - Number of orders that are returned for any reason (a subset of this measure would be the number of orders returned for specific reasons, including incorrect items delivered, incorrect quantities delivered, damaged items, incorrect items ordered, etc. ) • Order costs - The costs of taking orders, providing customer service, storing and maintaining inventory, and shipping and tracking products to ensure delivery Measurement drives improvement! 136

Learning Block 3, Unit 4 Unit 5: Best Practices in Order Management • • • Fulfill orders as quickly and accurately as possible – Fill, ship, and receive orders in a timely manner, with the correct products, in the correct quantities, and without any damage. Communicate with customers proactively and regularly – Order status, payment and shipping information communicated automatically – Use systems and technology to facilitate order fulfillment and communication Consolidate orders to a given customer location with similar delivery dates – Customers may buy products from various locations and at different points within a short period of time (e. g. , through both websites and call centers) Manage inventory with accuracy, integrity and real-time updates – When orders are placed, order entry systems should ideally update companies’ inventory records. – Link the order management and inventory systems to help prevent backorders and out-of-stock items Automate processes wherever possible – Automation helps reduce the manual effort involved in the order process • Reduces errors • Helps speed up the overall order and fulfillment process 137

Learning Block 3, Summary Learning Block 3 Summary • The customer order process begins when customers interact with suppliers like retailers, wholesalers, or providers of materials and includes work directly involved in fulfilling customer orders. – Orders should be filled on time and in full with no quality defects – Performance metrics help ensure efficiency and effectiveness – The customer experience of how issues are resolved will impact whether they continue to do business with a company. • Software tools like CRM can be used to help manage customer relationships and all aspects of interaction between companies and their customers. – Technology also facilitates order process • Phone, fax, mail, Internet, EDI, bar-coding, POS systems, and an OMS. • Good order process practices include communicating with customers, consolidating orders, managing inventory, and automating the order process to the fullest extent possible. 138

Learning Block 4 RETURNS AND REVERSE LOGISTICS 139

Learning Block 4, Objectives Learning Block 4 Objectives Upon completing this learning block, the learner will be able to: • Understand the key aspects of and employee responsibilities in the customer returns process • Recognize what encompasses reverse logistics, why reverse logistics are important, why reverse logistics are needed, and which key metrics are used in customer returns • Apply the key metrics used in customer returns functions • Create good key practices for the customer returns process 140

Learning Block 4, Overview Learning Block 4: Returns and Reverse Logistics Learning Block 4 Description • Overview of the processes, procedures, and steps involved in managing customer returns • Employee responsibilities at different points in the customer return process • Metrics used in customer returns and reverse logistics 141

Learning Block 4, Unit 1: Understanding Reverse Flows in the Supply Chain Reverse logistics is the return of products by customers back through the supply chain. • Forward flow of goods - filling customer orders and generating revenues • Reverse flow – processing returns, incurring negative cash flow, inventory restocking and other expenses Returns – Inventory sent from the customer to the supplier • Return process may include shipping, testing, repairing, returning, recycling, or discarding products. POINT OF CONSUMPTION POINT OF ORIGIN 142

Learning Block 4, Unit 1 Differences Between Forward & Reverse Logistics Forward • Uniform product quality and packaging • Clear disposition options • Straightforward product routing • Costs tracked and reported easily • Uniform product pricing • Consistent inventory management • Processes more consistent and transparent Reverse • • Product quality not uniform, packaging may be damaged Disposition options vary based on condition of product Routing depends on customer participation Costs may be hidden and more difficult to track/report Product pricing may depend on condition and packaging Inconsistent inventory management Process requirements less predictable 143

Learning Block 4, Unit 1 Returns & Reverse Logistics • • • Customer returns and how they are handled can impact customer service levels either positively or negatively. The return process usually begins with customer service. – Efficient and effective – Pro-active communication throughout the process – Timely resolution It is crucial that returns are handled as efficiently as possible. – For example, many large retailers have made processing returns promptly a key part of their customer service strategy to retain customers. Customer Service is not just about making a sale but about nurturing a relationship! Source: https: //www. thebalance. com/tips-for-handling-store-returns-2948453 144

Learning Block 4, Unit 1 Returns Reduce Revenue Returns reduce net revenues and increase inventory, packaging, processing and customer service costs. • Returns include product that is – No longer wanted – Defective / Recalls – Damaged – Overstocked / Obsolete – Mis-shipped – Ordered in error www. Zappos. com • For many retailers, online shopping has led to increased returns as many companies offer free shipping and free returns • Efficient and effective reverse logistics processes reduce costs and increase customer satisfaction and retention – Defective products and unfriendly return policies negatively impact an organization’s reputation, potentially resulting in lost future sales 145

Learning Block 4, Unit 1 What Constitutes a Return? • Returns can include – Damaged or broken products that cannot be resold – Products that can be resold after repair or repackaging – Good products that can be resold – Defective products – Expired products • Evaluation, repair and refurbishment may be outsourced, performed onlocation or at a centralized returns/repair center Source: ir_2014_nrf_retail_returns_survey. pdf 146

Learning Block 4, Unit 1 Reasons for Returns Causes of returns • Damage • Incorrect shipment • Dissatisfaction • Warranty issues • Contractual agreement • Product expiration Example – Amazon’s Reason Codes for Customer Returns Many companies allow customers to return or exchange items if they are dissatisfied with their purchases for any reason. Source - https: //www. amazon. com/gp/help/customer/display. html/? node. Id=200592900 147

Learning Block 4, Unit 2: The Customer Return Process The customer returns process can include repairing products and then returning them to customers, placing the material back into stock, or refurbishing items for resale. 148

Learning Block 4, Unit 2 Customer Return Options Organizations can ease the returns process by including return labels with every shipment. Alternatively, the organization may send the label after being notified of the return. • • • Return labels may be sent electronically via email or included in the package. Return labels generally include customer order information that is embedded in a barcode and used to provide status updates regarding the transportation, receipt and disposition of the return and replacement product and/or credit (as appropriate. ) Return information may also be used to trigger replacements to be manufactured or picked or credits to be processed. Customer Service Return Authorization Shipping Inspection Tracking Disposition Credit Repair, Resell, Recycle, Scrap, or Return to Customer Efficient and effective reverse logistics processes reduce costs and increase customer satisfaction and retention. 149

Learning Block 4, Unit 2 Return Material Authorization (RMA) – process of assigning a tracking number/code to the anticipated return. • The RMA should be included on any shipment documentation, including labels as it facilitates matching the return to the proper customer and order. Customers contact the company that provided the products, receive authorization to return the product, and are given an RMA number. This number is then included in the packaging of the returned products and is used to authorize refunds from product providers 150

Learning Block 4, Unit 2 Warehouse Operations • Handling returns may be significantly more complicated and labor intensive than shipping new product. – Several products may be mixed in the same package. Packages may be nonconveyable and product may not be tagged or labeled. – Multiple steps may be required to inspect, test and repair, return or dispose of products. • Organizing the returns process can help speed up the flow and disposition of returned goods. Some organizations have a designated warehouse or area of the warehouse specifically for returns. Source: https: //si. wsj. net/public/resources/images/BN-LV 987_1227 re_P_20151225151916. jpg 151

Learning Block 4, Unit 2 Refund, Replace, Refurbish • Returns are inspected and sorted based on the type of item, the condition and specific laws/policies/regulations related to that item. – Items covered by warranty, will be repaired or replaced and then returned to the customer. – Defective or sub-standard items may be repaired or thrown away • Customer may receive a replacement or credit – Items that can be repaired may be resold as “like new” or refurbished, possibly with a manufacturer’s warranty. – Regulations or company policies may prevent returned items from being resold within the US. • Repairs may occur at the store, warehouse or at a dedicated repair center. depending on the nature of the repair. – Returns with simple cosmetic or packaging imperfections may be refurbished or re-boxed and resold at discounted prices. – Third party logistics companies (3 PL) are often used to handle the repair, refurbishment and disposal of returns. Video – Where Store Returns are Re-sold (1: 40) - https: //www. youtube. com/watch? v=kymh. L 0 Byeac Video – Marksman Refurbishment Center (1: 08) - https: //www. youtube. com/watch? v=Dwh. Kmdy. Ak. Dc 152

Recycling Learning Block 4, Unit 2 Different locations have different rules and regulations regarding the recycling and disposal of returned items and packaging. For example, batteries contain toxic elements that can negatively impact the environment if they are simply thrown into the regular waste management system after use. As a result, many firms offer recycling programs for these types of toxic items. 153

Learning Block 4, Unit 2 Returns Management • Returns can be a complex process because of how they impact physical inventory, electronic inventory, and accounting systems. – Items need to be examined and decisions need to be made regarding returning products as they are to storage, repairing products and returning them either to storage or back to customers, or scrapping products. – Items must also be identified, assigned to a customer or an account, assigned a disposition, and physically sorted for processing. 154

Learning Block 4, Unit 2 Returns Management Systems Specialized functionality can make returns management more efficient • • Handheld scanners assist with matching the RMA to the order, identifying the product and tracking it through the inspection/repair/disposition process. Interfaces with warehouse, inventory and order management systems enable realtime inventory control – Items may be tracked, directed for processing/repair, allocated to a storage location or cross-docked for shipping – Replacement orders can be generated and integrated into the fulfillment process • Integration with other systems facilitates – – Accurate credit processing Improved planning and purchasing Better inventory record keeping Enhanced quality control in both manufacturing and order processing Receiving Scans Package RMA Barcode RMA Matched to Expected Items Individual Items Scanned to Confirm Receipt System Indicates Next Processing Location 155

Learning Block 4, Unit 2 Stages in the Customer Returns Process Stage 1, Return Authorization Customer obtains RMA & shipping instructions Stage 2, Receipt Products returned & received at the warehouse Stage 3, Sort & Stage Products sorted & staged for further processing Stage 5, Processing & Analysis Returns are fully processed & documented, credit may be issued • Ideally, the return is scanned and systems are updated at each point in the process. • There may be multiple steps in the sorting, staging and processing functions. • Each step should be documented so that the product location and status is kept current. Stage 5, Disposition Activities Product is scrapped, repaired, returned or replaced into inventory 156

Learning Block 4, Unit 2 After-Sale Warranty Process Receiving Scans Package RMA Barcode • • • Individual Items Scanned to Confirm Receipt System Indicates Next Processing Location Warranty returns are processed in essentially the same manner as other returns. – Customer contacts company – Company authorizes return and issues RMA Once received, the product is inspected, sorted, serviced or replaced and then sent back to the customer. Warranty tracking programs, inventory, accounting and other systems will be updated. Product is Inspected • RMA Matched to Expected Items Serviced, Refurbished, or Recycled for Parts Product returned to customer Systems updated Companies often use 3 PLs to perform some or all of these procedures. – 3 PLs typically provides a range of services, including warehousing, transportation, and other logistics-related services. – Firms may decide to outsource their logistics activities to these 3 PLs to allow them to concentrate on their core competencies, reduce costs, and leverage the logistics-related assets and information technology of 3 PLs. 157

Learning Block 4, Unit 3: Industry Differences and Best Practices Different industries and different types of products require different reverse logistics practices. • • Retail fashion - Returns are common and often relate to ill-fitting sizes or customers simply changing their minds. Products can often be placed directly back into stock. Pharmaceuticals - Strict rules and regulations apply for batch lot control. Expiration dates and type of packaging may also be a consideration. Food - Product age, expiration date and packaging govern the use and return disposition of many products. Returns will often be scrapped, donated or disposed of in a controlled manner. Electronics – Products never used/opened can be put directly back on the shelf. Open box items may need to be inspected and tested before being sold as refurbished. 158

Learning Block 4, Unit 3 Secondary Markets and 3 PLs • Manufacturers and retailers use outlet stores and secondary markets to recoup some costs for products, even if they sell at discount. – Goal is to sell products for as close to the original price as possible. – Least desirable option is to sell products at salvage value or throw the products away • Many companies use third party logistics companies to cost-effectively and efficiently handle their return and refurbishing requirements – Video – Ryder’s Reverse Logistics Solution (3: 40) - https: //www. youtube. com/watch? v=NRi 6 x. XMc. FII – Video - Home Depot Returns (3: 19) - https: //www. youtube. com/watch? v=42 Y 4 Y 8 OHen. A&list=PLr. Qo. UWWN_86 m m. YEXBDHi 85 Ne. Blm. ED-l. S 0&index=13 159

Learning Block 4, Unit 3 Product Flow to Secondary Markets Retail Example: 160

Learning Block 4, Unit 3 Best Practices in Reverse Logistics • A best practice is a way of doing things that, through experience and research, has been shown to lead to a highly desired result. – Best practices describe the best way to do something at a given point in time. • As time goes by and best practices evolve, they are become known as good practices – Although best practices are the ultimate goal, good practices should be emphasized and used every day. • Recognized best practices for customer returns: – Reduction of cycle lead times - Analyzing existing processes to improve them and to – – – reduce time and resources expended in the customer returns process Information systems and technology - Developing and maintaining effective information systems and technology to support customer returns Organization for returns - Ensuring that proper returns processes are in place to facilitate the rapid flow of goods and returns Layout - Ensuring the returns process is considered in the layout and design of a warehouse or distribution center Asset recovery - Promptly disposing of returned items to improve asset utilization Efficient returns processes and procedures - Maintaining efficient returns processes after product return classification 161

Learning Block 4, Unit 3 - Extra Best Practices in Reverse Logistics Best Practice – Method or technique considered superior to any alternatives because it produces results that are superior – or - because it has become the standard way of doing things. Additional best practices for customer returns: • • • Clear accountability Reporting and sharing data and key performance indicators throughout the organization Data capture throughout the process, including warranty validation and tracking Focus on stopping returns before they happen Make it easy and convenient for customers to return products when necessary Speed cycle times through technology and process improvement Organization for returns: Ensuring that proper returns processes are in place to facilitate the rapid flow of goods and returns Well-organized returns area which streamlines processing Prompt disposal of returned items to improve asset utilization Efficient returns processes and procedures 162

Learning Block 4, Unit 4: Key Metrics Used to Assess the Returns Process Metrics help ensure returns functions are carried out proficiently and correctly. • Key metrics that assess the effectiveness and efficiency of the returns process include: – Return cycle time (length of time to process returned products ) – Volume and value of products reclaimed and resold – Percentage of material recycled – Waste produced in the returns process (wasted time, effort, or materials) – Percentage of costs recovered – Handling cost per return or item Metrics should focus on measures that help the organization assess, diagnose and correct reverse logistics issues. 163

Learning Block 4, Summary Learning Block 4 Summary • Reverse logistics - return of products back through the supply chain. – Returns process may include returning product to inventory for resale, shipping, testing, repairing, returning products to customers and recycling and disposal. • Customer returns and the way they are handled can positively or negatively impact customer service levels. – Returns should be handled efficiently. Specialized layouts and systems can help streamline this process. • Differences exist among industries in terms of the nature and types of returns as well as how they are handled. • Best practices - Avoidance of returns in the first place, reduction of cycle lead times, and efficient returns processes and procedures. • Key metrics - Disposition cycle time, volume and value of products reclaimed and resold, percentage of material recycled, waste of various kinds, percentage of cost recovered, and handling costs per return or item. 164

Learning Block 5 JOBS AND LEGAL CONCERNS IN CUSTOMER SERVICE 165

Learning Block 5, Objectives Learning Block 5 Objectives Upon completing this learning block, the learner will be able to: • Recognize job positions in customer service • Explain employees’ roles in identifying, recording, and reporting issues and concerns associated with potential violations in the supply chain, including violations by employees, management, vendors, or customers • Implement key aspects of work-related rules, government regulations, and corporate policies • Apply common laws in customer service operations 166

Learning Block 5, Overview Learning Block 5: Jobs and Legal Concerns Learning Block 5 Description • Overview of jobs in customer service • Outline of the legal and regulatory concerns in the supply chain process. – Legal and regulatory terms and common laws – Responsibilities of stakeholders – Consequences of unlawful actions Source: http: //wanna-joke. com/wp-content/uploads/2014/12/funny-customer-service-casual-friday. jpg 167

Learning Block 5, Unit 1: Customer Service Responsibilities and Job Types Customer service involves working with customers and meeting their needs by providing professional, high-quality service. • Sales – Customer service representatives’ tasks often include selling products or services. In these cases, the sales and customer service departments work together. • Customer service representatives may provide information to assist customers in deciding which products and services to purchase. • Customer service representatives may also be tasked with obtaining and passing on sales leads. – Customer service representatives might be responsible for suggesting upgrades to current products or new products they believe will meet customers’ needs. • Clerical Tasks – Customer service representatives’ tasks could also involve clerical work, such as making notes about customer service issues and recording transactions. – Other tasks could include processing client information about new or current customer accounts and taking phone calls to handle customer accounts and questions. 168

Learning Block 5, Unit 1 - Extra Customer Service Includes Sales & Support Customer service representatives typically perform both sales and support. • • • Liaise between the organization and its customers assisting with communication and information transfer in both directions Provide product and service information Resolve problems with accuracy and efficiency Suggest upgrades, complementary or alternative products and services Open and maintain customer accounts Generate sales leads for the sales team or complete the sale themselves Resolve customer complaints via phone, email, or social media Proactively reach out to customers to verify account information, offer assistance and gauge customer satisfaction Assist with placement of orders, refunds, or exchanges. Goal - Ensure excellent service standards and maintain high customer satisfaction 169

Learning Block 5, Unit 1 Job-Related Responsibilities • Duties and responsibilities vary widely, depending on the type of industry and nature of the work being conducted. – Retail store customer service may involve dealing with customer complaints, handling cash, processing orders, and similar tasks. – Telephone customer service representatives may answer questions and assist customers with placing online or phone orders – Government customer care services varies from helping people with administrative requests to handling specific situations, such as natural disasters, where people can call in or be notified as to what to do. – Hospital patient care coordinators schedule appointments, get approval for and arrange services and procedures. 170

Learning Block 5, Unit 1 Jobs in Customer Service • Advising and helping people and interfacing with other supply chain functions are major parts of the customer service profession. These tasks can take place in person, online, or over the phone. • Customer service jobs in a supply chain stand out from many other supply chain positions in that they are critically linked to every function in the chain. – The interaction with and information gathered from customers is invaluable for creating an environment of continuous improvement that can result in a distinct competitive advantage. – Customer service positions can also have a direct result on company revenues, profits, and cash flows, as these positions can strongly influence customer orders and repeat business. 171

Learning Block 5, Unit 1 Customer Service Positions Increasing Responsibility Customer Service Assistants Customer Service Representatives Customer Service Supervisors Customer Service Managers • Answer basic customer questions and help customers find products or services • Usually report to customer service representatives or customer service managers • Responsible for working with, answering queries from, and selling to • Typically report to customer service supervisors • In a B 2 B environment, customer service personnel may be assist with suppliermanaged inventory planning and responding to large-scale RFPs and RFQs • Delegate work, instruct customer service team members, resolve more complex customer issues, and similar tasks • Typically report to customer service managers • Responsible for hiring staff, monitoring team performance, training and developing staff, mentoring and coaching staff, and similar tasks • Typically report to executives like directors and vice presidents in operational departments such as customer service, customer care, or sales. 172

Learning Block 5, Unit 1 Additional Customer Service Roles • New roles and organizational structures are emerging due to the increased recognition of the importance of customer -facing operations. – New titles such as Customer Care Agent, Client Services Coordinator, Social Media Customer Care Associate – New types of responsibilities - Case Managers, Service Delivery (Uber, Lyft, Air. Bnb, City. Bike), Virtual Concierge, At Home Advisor • Many sales roles also often include a strong customer service component. – Manufacturer’s representatives may sell products as well as perform order entry, expedite order fulfillment, service products and following up on customer inquiries and complaints. • Some Customer Service roles focus on specific elements of the order management process, such as order management clerks, order management associates, order entry clerks, etc. 173

Learning Block 5, Unit 1 - Extra Sample Customer Service Titles • • • • • Account Coordinator Account Manager Account Representative Administrative Assistant Account Manager Assistant Customer Care Center Manager Bellman Benefit Coordinator Bilingual Customer Service Representative Call Center Lead Call Center Representative Call Center Supervisor Cashier Client Account Assistant Client Distribution Specialist Client Relations Associate Client Relations Manager Client Relations Representative Client Services Coordinator Client Services Representative • • • • • Client Service Specialist Client Success Manager Concierge Contact Center Help Desk Customer Care Associate Customer Care Operator Customer Care Representative Customer Care Manager Customer Care Supervisor Customer Service Agent Customer Service Ambassador Customer Service Associate Customer Service Engineer Customer Service Greeter Customer Service Lead Customer Service Representative Customer Service Specialist Customer Service Technician Customer Solution Manager Customer Support Associate • • • • • • Client Support Manager Customer Support Specialist Data Services Specialist Director of Customer Success and Satisfaction Dispatcher Duty Manager Front Desk Agent Front Desk Associate Front Desk Coordinator Front Desk Manager Front Desk Receptionist Garage Cashier Guest Service Agent Guest Service Representative Health and Welfare Services Supervisor Help Desk Associate Help Desk Support Help Desk Technician Hostess Inside Salesperson Investment Assistant Manufacturing Customer Service Representative • Medical Receptionist • Online Customer Support • Outbound Calling Representative • Patient Care Coordinator • Receptionist • Rental Representative • Retail Associate • Retail Sales Associate • Sales Assistant • Sales Coordinator • Server • Service Administrator • Service Advisor • Service Consultant • Special Orders Technician • Supervisor of Provider Relations • Teller • Telephone Support Specialist • Territory Service Representative • Transaction Coordinator • Vehicle Return Associate 174

Learning Block 5, Unit 1 - Extra Sample Customer Service Job Description Responsibilities • • Identify and assess customers’ needs to achieve satisfaction Build sustainable relationships of trust through open and interactive communication Provide accurate, valid and complete information by using the right methods/tools Handle complaints, provide appropriate solutions and alternatives within the time limits and follow up to ensure resolution Keep records of customer interactions, process customer accounts and file documents Follow communication procedures, guidelines and policies Take the extra mile to engage customers Requirements • • • Proven customer support experience Strong phone contact handling skills and active listening Familiarity with CRM systems and practices Customer orientation and ability to adapt/respond to different types of characters Excellent communication and presentation skills Ability to multi-task, prioritize, and manage time effectively 175

Learning Block 5, Unit 1 - Extra Six Phrases for Customer Service Representatives 1. I don’t know, but I’ll find out for you – Good customer service isn’t always about knowing the right answer. Often, it’s about finding the right answer so that your customer doesn’t have to. 2. I’d be frustrated too – It’s critical to not just have empathy, but to convey it to your customer. 3. I’d be happy to help you with this – Simply by using positive words, you can make your customers (and yourself) feel more positive. 4. I’ll send you an update by (day or time). – Be proactive about keeping the customer posted 5. I really appreciate you letting us know – Each customer complaint could mean that dozens of other customers are having the same problem and not letting you know. 6. Is there anything else I can help you with? – Despite our best efforts and intentions, we don’t always get it right. To build better relationships with your customers (and anyone else), never miss an opportunity to thank them. 176

Learning Block 5, Unit 2: Laws, Rules, and Policies • Every organization, firm, and business is governed by rules and regulations set by local, state, and federal governments. – Employers and employees are responsible for knowing laws and regulations relevant to their organization • Organizations often have their own written policy or procedure documents – – – General employee information Company expectations Employees’ rights Safety and security policies Personal conduct expectations • Everyone is responsible for being aware of and upholding company policies as well as legal rules and regulations. Additionally, every individual is responsible for spotting, recording, and reporting legal and regulatory concerns about employees, employers, suppliers, and customers. 177

Learning Block 5, Unit 2 Legal Responsibility • All firms and their employees are obliged to comply with the laws established for their environment. – For example, a firm that manufactures medical devices has different legal responsibilities than a firm that manufactures computer games. • Laws, and regulations are generated by several levels of government, lawmaking bodies and regulatory agencies. – Lawmaking bodies include city councils, township boards, county commissions, state legislators, federal legislators, and similar authorities. – Regulatory agencies may issue additional rules and guidelines that are enforced as law. • Compliance can be complex and challenging – Rules may vary from location to location, even within the same company. 178

Learning Block 5, Unit 3: Trust and Ethics are the principles that govern conduct. • To establish trust, customer service providers must be calm, communicate honestly, and respond quickly. – If the customer service provider cannot correct the problem, he/she should escalate the issue. – It is imperative to keep the highest ethical standards when dealing with customers. – Customer service providers must always choose the right and legal approach, even if it is not always the most popular or easiest option. • Good ethics and an altruistic mission can lead to competitive advantage – Unethical behavior can greatly damage a company’s image and reputation, potentially causing low morale, high employee turnover, and lost customers. – B Corps are for-profit companies certified to meet rigorous standards of social and environmental performance, accountability, and transparency. Trust is built on ethical behavior. 179

Learning Block 5, Unit 3 - Extra Ethical Responsibility Ethics are the principles that govern conduct. • Ethics are the set of moral principles that guide behavior – Legal compliance is the minimum acceptable standard • Through their culture, strategic values and mission statement, organizations may establish ethical behaviors that exceed legal requirements Leadership Action Education Awareness How Organizations Shape Ethical Conduct – Employee behavior is expected to reflect the organization’s ethical standards – Business ethics helps firms and employees decide which actions are right/wrong in a given situation. 180

Learning Block 5, Unit 3 Examples of Legal and Ethical Conduct • Honesty and integrity - High standards of honesty and integrity should be established and maintained in all business relationships, both inside and outside organizations • Professionalism - Companies should strive to maintain high standards of professional competence • Responsible management - This requires using resources to provide maximum benefits to employers • Service in the public interest - This type of ethical conduct includes using the authority of offices only for company purposes and benefits and rejecting any improper business practices • Conformity to the law - Laws for companies and individuals include the laws of various levels of government, companies’ rules and regulations, and contractual obligations 181

Learning Block 5, Unit 3 - Extra Ethical Conduct in Practice • • • Be a good role model by being ethical and honest. Tell the truth always. Act professionally. Don’t hide or manipulate information. Be willing to admit your failures. Hold everyone accountable to the same values. Use company resources for company benefit. Reject improper business practices. Follow the law. Principles Practices Code of Conduct Values 182

Learning Block 5, Unit 4: Common Laws • Laws exist at the local, state and national levels, and include things like: Policies and – Driving laws are – Intellectual property created to • Licensing • Copyrights protect people • Speed limits and traffic laws • Patents and ensure • Vehicle safety – Criminal activities efficient – Licensing for doctors and nurses • Murder, assault functioning of • Training and conduct • Drugs businesses and – Taxes – Restriction of hazardous societies. substances • Sales tax • Batteries • Import/export tariffs • Lead and other chemicals – Waste disposal • Pharmaceuticals – Environmental – Food safety • In the U. S. , the Department of Labor administers and enforces many federal laws that impact the labor force. The mandates and regulations that implement them cover many workplace activities throughout the country (United States Department of Labor, n. d. ). 183

Learning Block 5, Unit 4 Additional Legal Considerations • Human rights and human rights laws that govern and protect basic rights and freedoms for all people. • Food safety, environmental and hazardous materials regulations may require specific storage, transportation, handling and disposal of a given material and may impact both forward and reverse logistics. – Refrigeration, flammability, corrosion – Licensing and training • Workplace laws that govern business conduct include wages and hours, workplace safety and health, workers compensation, and employee benefits laws. http: //www. kentpublichealth. org/images/foodsafety. jpg Laws protect our general safety, and ensure our rights against abuses by other people, by organizations, and by the government itself. 184

Learning Block 5, Unit 4 Consequences of Not Following Laws and Policies • • When laws, rules, and policies are ignored in the supply chain process or anywhere in a business, any or all of the following consequences may occur: – Employees and/or customers can get sick, hurt or killed – Employees can lose their jobs, be fined and even jailed – Companies can lose profits or be forced out of business – Societies can be affected with pollution and disease – Entire economic sectors can be negatively affected – Companies and employees can be fined and, in extreme cases, possibly jailed Organizations are responsible for ensuring the laws that govern their conduct are clearly understood and followed by everyone in the company. – Employees are also responsible for understanding and complying with the laws and procedures that are in place within their firms. 185

Learning Block 5, Unit 5: Legal and Regulatory Concerns • Individuals engaged in customer service have certain legal and regulatory responsibilities to both their employers and customers – Banking customer service representatives must follow specific rules to ensure that account information is only given to the legal account holder. – Liquor store employees must be sure that the customer is of the legal age to purchase beer and wine. – Truck drivers must be sure to follow all speed and safety laws, including law regarding driving hours and hazardous transport. – Restaurant employees must wash their hands after using rest rooms • By conducting themselves professionally, employees can help ensure customers’ expectations are fulfilled. 186

Learning Block 5, Unit 5 Legal & Regulatory Concerns • Organizations are subject to the community and governmental rules, laws, and regulations – They also create their own policies, which may be stricter than governmental requirements. • Non-compliance has consequences, including fines and even imprisonment • Customer service representatives must be aware of all governing rules, laws, and policies, avoid violating them, and report customers that demand outcomes that could result in violations. Some examples are as follows: – – Human rights and human rights laws Food safety and food safety laws Hazardous products and material laws Environmental laws Rule s Laws Regulations 187

Learning Block 5, Summary Learning Block 5 Summary • Every organization, firm, and business is governed by rules and regulations set by local, state, and federal governments. – Employers and employees are responsible for knowing these rules and regulations – There may also be organizational policies and legal and regulatory concerns related to order management and/or specific products in the supply chain. • Laws, rules, and company policies directly affect employees, customers, and third parties in the supply chain, and often society at large. – Severe consequences can result from ignoring laws, rules, and policies • Ethics are the set of moral principles that guide behavior. – Ethics involves behavioral questions about the fairness, justness, rightness, or wrongness of actions. 188

References APPENDIX 189

Customer Service Role Playing Situation # 1 – Computer Problem Customer • You just bought a new computer and proceed to set it up. You did not bother to read the directions – it is a simple process. You turn on your new computer, and the monitor remains black. You turn the computer and monitor on and off several times and are getting very frustrated angry. Obviously, the store sold you a defective machine. • You call the store and “chew out” the store manager at 4: 30 p. m. and then insist that they send out a technician immediately to fix the computer. The store manager tells you that the technician is out on a service call and that they would send him/her out as soon as he/she came in. The technician finally arrives at 6: 00 p. m. You are furious now because not only did the store sell you a broken computer, but they took over an hour and a half to come service it. 190

Customer Service Role Playing Situation # 1 – Computer Problem Employee • You have had a very long day making service calls, and even had to work through lunch to get to them all. You are looking forward to going home, getting dinner, and then going to your basketball game at 6: 30 this evening. You come in to the shop at 4: 30 only to have your manager tell you that you have to make one more service call. This wouldn’t bother you much if it were on your way home, but instead it is 45 minutes away in the opposite direction. • Knowing that service is what your company has been built on, you take a deep breath and start out on the call. When you arrive, you find that you are greeted by an angry and hostile customer. You sit down at the machine and discover that they forgot to adjust the brightness on their monitor. If they had simply read the directions, they would have been able to figure this out for themselves. • How do you deal with this customer? 191

Customer Service Role Playing Situation # 2 – Computer Problem Customer • You have an assigned seat in first class on a flight to Disney World. When you arrive at the airport check-in counter, you find that your seat has been deleted from the computer. Normally this wouldn’t bother you; you could take a seat in coach or take the next flight, but today both the flights before and after yours were canceled. Consequently, seats on your flight are filling up quickly. You must make it to Disney World this afternoon for a very important meeting. 192

Customer Service Role Playing Situation # 2 – Computer Problem Employee • You realize that the passenger should be on the flight and that it was the airline’s fault that your seat assignment was deleted from the system. The seats are filling up quickly and this passenger has flown with your airline many times. • What can you do to help this passenger? 193