In logistics, the key to increased customer satisfaction lies in the supply chain. Improving the supply chain so that customers of logistics service providers receive their shipments accurately and quickly will have a positive impact on customer loyalty and recommendations. We have compiled five measures to optimize the supply chain and increase customer satisfaction.
Customer Satisfaction: the Last Link in the Supply Chain
We need to look at the supply chain from its end: is the supply chain concluded when a delivery has reached the customer? Actually yes – but let us add another link to the supply chain: customer satisfaction. All previous links in the chain affect this very last one. If the customer is dissatisfied, something in the supply chain has not worked as it should. If the customer is satisfied, this not only speaks for the quality of the completed supply chain, but also paves the way for new supply chains through customer loyalty and recommendations.
Customer satisfaction is thus a quality check for logistics services which is integrated into the chain. The better the preceding links are coordinated, the more smoothly the junctions are working, the more likely this check will be positive. Delivery reliability ensures high customer satisfaction, which in turn secures business success for the future. That is why logistics service providers should put a lot of energy into optimizing the supply chain.
Logistics KPIs for Greater Customer Satisfaction
Every industry has key performance indicators (KPIs): key figures on the quality and efficiency of individual operational processes or company divisions. In logistics, there are certain KPIs that are crucial for customer satisfaction. If the figures indicate underperformance, these KPIs must be improved to ensure customer satisfaction.
- Delivery Accuracy: This KPI indicates the proportion of delivery orders that have been completed without incidents. Delivery accuracy is affected by defective, incomplete, damaged, or delayed deliveries.
- Delivery Time: On-time delivery is of central importance for customer satisfaction. Transport logistics providers must achieve high on-time delivery rates by delivering shipments on the scheduled date.
- Delivery Costs: Prices for logistics services are not just about being as low as possible for the consignor and consignee. Many customers are willing to invest more for fast shipping. For this reason, it is important to find the right balance between performance and payment. The goal of service providers is to keep costs as low as possible while offering a high service quality.
- Supplier Compliance, the most important KPI for customer satisfaction: the higher the supplier compliance rate, the better the logistical jobs have been done – and the greater is the customer satisfaction as well as the probability of new orders and recommendations.
5 Steps Towards Greater Customer Satisfaction in Logistics
Measures in the supply chain for greater customer satisfaction address the corresponding KPIs. Improved key figures indicate an increase in the quality of the logistics service. As a consequence, customer satisfaction is also enhanced.
Five approaches in the supply chain are especially promising. In each case, the decisive factor is a higher degree of automation of processes with advanced technologies. A comprehensive IT management system that designs and monitors all work steps is a precondition for supply chain optimization and increased efficiency.
Route planning affects time and cost factors. Which destinations should be approached in which order may be easy to answer in case of full truck loads, while for combined shipments a complex decision-making process is involved.
Special algorithms can accelerate and improve route planning decisions beforehand. And on the road, networked AI systems that integrate control centers, vehicles, and transport routes provide all relevant information on the transport situation in real time. They can respond to problems in a targeted manner and suggest route changes to ensure delivery reliability.
Smart Load Building
Empty runs and poorly utilized freight capacities are cost drivers for logistics service providers and therefore indirectly also for customers. Load building cannot be separated from route planning, which is why intelligent IT applications plan both routes and loads simultaneously.
When it comes to load building, however, it is also important to use the available space as efficiently as possible to minimize the number of tours required. The choice of the most suitable mode of transport or packaging also contributes to optimized utilization of the cargo space as well as cargo safety.
Supply Chain Transparency
When all parties involved in the supply chain – manufacturer, distributor, consignor, logistics service provider, consignee, or other parties – have access to the identical information in real time, transparency in the supply chain is achieved. Big data and blockchain solutions are particularly useful for increasing supply chain transparency. Transparency improves efficiency because you can identify and resolve problems faster. And if you cannot remove an obstacle in the short term (such as a supply shortage on the producer side), you can at least communicate it quickly across the supply chain.
Customer satisfaction is less affected if the customer is informed quickly, transparently and comprehensively about a delivery delay. He has more time to reschedule and alternatives can be found together.
Better Demand Planning and Forecasting
Logistics has its peaks and calmer periods, with the specific requirements being different before Valentine’s Day or Mother’s Day, for example, than during a “Black Week”. There is a vast amount of data available for demand planning. Based on empirical figures from past seasons, current data, and demand calculations, AI-supported data analyses can, for example, forecast which capacities of personnel, transport, or storage are needed where and when. This helps to avoid delivery bottlenecks and delays and to keep customer satisfaction high.
Sustainability as Customer Added Value
Sustainability is a competitive factor. Commercial customers are asking for sustainable services to increase the sustainability in their own value chain. The good thing is: optimizing the supply chain has a positive impact on the sustainability of logistics services. Smart route planning and freight space utilization directly reduce the carbon footprint. If overcapacities are avoided through targeted demand planning, this saves material and ecological costs.
In addition, low-emission technologies such as CNG, LNG, and HVO propulsion systems, as well as e-mobility, contribute to improving the eco-balance. Sustainability agreements with suppliers or special green services for customers are further components.
Supply-Chain-Optimization at DHL Freight
DHL Freight already uses digital tools for route planning and AI solutions, for example in container loading and supply chain monitoring. In addition, blockchain concepts are already deployed or in the trial phase. In terms of sustainability, we are focusing on low-emission and electric drives in the short and medium term; in the long term, we are working on technology concepts based on green hydrogen.
We measure our customers’ satisfaction with the annual Customer Satisfaction Survey (CSS) and derive dozens of minor and major optimizations for our processes from the feedback. We also apply the Net Promoter Approach (NPA) to determine how likely our customers will recommend us to others.
With the Green Carrier Certification, DHL Freight maintains a certification program for service partners to create transparency about their progress in sustainability. Moreover, DHL Freight customers can book the GoGreen Plus service. This includes our binding commitment to reduce emissions directly within the company’s own network.
The way to optimize the supply chain and improve customer satisfaction can only be taken with advanced technologies. Automation and the integration of logistics processes and of each single link of the supply chain are the ideal prerequisites for increasing and maintaining customer satisfaction. An optimized and efficient supply chain creates a win-win situation for customers, service providers – and the environment. At DHL Freight, we are highly committed to ensuring that our supply chain remains intact at all times. To ensure that your deliveries reach you safely, quickly, and sustainably.
Frequently asked Questions
- Why is supply chain optimization important?
The better the supply chain operates, the higher is the efficiency and quality of the logistics service. High-quality services ensure high customer satisfaction and enable business success.
- What are the KPIs in logistics relevant for customer satisfaction?
The decisive KPIs are delivery accuracy, delivery time, delivery costs, and supplier compliance. If good scores are achieved in each case, this is the precondition for high customer satisfaction.
- How to improve customer satisfaction?
Customer satisfaction in logistics can be improved primarily by optimizing the supply chain. To achieve this, there are five targeted measures: smart route planning and load building, supply chain transparency, better demand planning and forecasting, and increased sustainability in the supply chain.