Geneto O. Fermano Jr.

BSIE V

SEATWORK:
1. What standard(s) of performance should we use for measuring customer service?
Overall Satisfaction
By performing regular customer satisfaction surveys, you can gauge how many of your customers would
rate their level of satisfaction as very or extremely satisfied. The more customers who rate their experiences
highly, the better your customer service.
Satisfaction Improvement
One way to measure customer service is to track changes in customer satisfaction over time. If, for
example, satisfaction has gone down over the last couple of years, then youll know a change is likely in order.
But if its improving, or if youve already achieved high levels of customer satisfaction and theyre staying
constant, then youll know youre on the right track.
Customer Retention
Customers who are happy with the service you provide are likely to stick around and do more business
with you. So if youre bringing back a fair amount of customers regularly, thats a pretty good indication that
youre providing good customer service.
Net Promoter Score
And customers who are very happy with your customer service are likely to even go a step further and
recommend your company to others. So your companys Net Promoter Score, or rate of people who would
recommend your business to others, can be a good indication of where your customer service stands and another
way to measure customer service.
Conversion Rate
After someone from your customer service team interacts with a customer, how likely are they to make a
purchase or take some other kind of action? If your customer service is good, this number should be fairly high.

Compared to Competitors
Even customers who like your brand might not choose you over your competitors for every single
interaction or purchase. So while general satisfaction and customer retention are good metrics to measure
service, its still important to see how your company stacks up against competitors.
Average Resolution Time
Part of providing great customer service is resolving issues in a timely manner. If you can respond to
customers and get them answers quickly, theyre more likely to be pleased with the experience. So, if youre able
to keep that resolution time relatively low, that could be an indication of good customer service and yet another
way to measure customer service.

Active Issues
If you are able to resolve most issues fairly quickly, then you shouldnt have too many issues to deal with
at any one time. And if you do, then it could indicate that your customers have a higher-than-usual volume of
complaints.
Resolved Issues
You can also look at all of the issues that your customer service team has resolved to get an idea of your
customer service. No matter how great your company, there are bound to be issues and complaints. But if youre
able to solve them quickly and in a way that makes your customers happy, thats an indication of good service.
Employee Productivity
Different types of businesses use different methods to measure employee productivity. But its an
important factor when it comes to customer service. If you want customer issues to be resolved in a timely
manner, employees need to do their jobs effectively.
Employee Retention/Employee Turnover
When your employees are happy, they tend to stick around. And when you are able to keep employees
around for long periods of time, theyre more likely to feel comfortable and empowered in their jobs. This means
theyre also likely to provide service that lives up to your standards.
Brand Attributes
How do customers view your company overall? What words would they use to describe your brand? And
how do their opinions line up with your expectations? By obtaining this sort of feedback from customers, you
can measure customer service and get a pretty good indication of where you stand in your customers eyes. And
youll know what qualities you might need to work on to get customers to see your brand in that particular light.
Complaint Escalation Rate
No matter how great your service is, youre going to get complaints at some point. But if you reach a
point where youre receiving an unusually large number of complaints, or your complaints have been steadily
increasing without overall customer growth, there could be a problem. Keep an eye on how those numbers
change over time. This could also tie in to the number of resolved issues, if youre tracking that, as well.
Cash Flow
Cash flow can be a great performance indicator for many different business factors. Customer service is such
an important factor that it can have a really big impact on your bottom line. If your service is bad, it could drive
customers away, decrease referrals and cause potential customers not to complete purchases. But if its good,
customers are likely to come back, tell their friends and have a big impact on your companys overall profits.
2. Explain the logistics departments role in the introduction of the new product?
Consumers' seemingly endless demand for variety and for the very latest in technology and fashion has
dramatically shortened the life span of most products and led to an explosion of new product introductions.
While corporate resources are understandably weighted toward R&D, engineering and sourcing on the front end
of new product development, the back end of the supply chain can be equally critical to success. Even the most

innovative new product will lose crucial sales and competitive advantage if it doesn't make it to the shelf in time
for a launch promotion or if it has to get there via expensive, expedited transport.
"The trick is to embrace the logistics of new product introductions (NPI) as a core component of the launch itself
and as a big piece of the process," says Chris Holt, a consultant with UPS Supply Chain Solutions, Atlanta.
Companies are taking this approach "more often and in more complex ways" than they once did, he says. But
NPI logistics in many cases still fails to get the attention it deserves.
"The whole NPI process is driven by sales and marketing and by engineering, and there is a big communications
gap between these groups and the people on the distribution side who have to handle the products," says Jim
McNerney, a principal at consulting firm ESYNC in Toledo, Ohio. "We have seen instances where distribution
has been told certain things about a product, but when the product actually gets to them, it is not as described.
For example, it might have very different measurements, which creates re-packing issues, at least until changes
can be made upstream."
This gap was borne out in a recent survey conducted by Infosys, an IT services company based in Fremont,
Calif., and the Electronics Supply Chain Association. Responses from 170 supply chain executives at 89 leading
high-tech companies revealed that participation in new product development is primarily limited to
sales/marketing and engineering. "The survey showed that there is a great need and desire for collaboration
between different functional areas within a company as well as across companies," says Miguel Zuniga,
solutions manager for high-tech and discrete manufacturing at Infosys. Current new product collaborative
processes, however, typically "are sub-optimal and require a lot of effort," he says. Infosys offers software that
enables integrated product management by driving collaboration of functions throughout the product lifecycle,
not just at the initial stages, says Zuniga.
Hewlett-Packard, Palo Alto, Calif., is one company that recognized early the need to integrate logistics with new
product development. "At HP, the supply chain and logistics are core parts of the NPI process," says Tim
Spofford, supply chain director for HP's Image and Printing Group-Americas. Spofford and Leo Bischoff, vice
president of logistics-Americas, work closely together and with HP's overall new products team to coordinate all
aspects of new product launches.
"HP has made significant investments in supply chain management and NPI is obviously a big portion of that,
with much of our product line turning every year and, in some cases, multiple times in a year," says Spofford.
In addition to new products based on existing platforms, HP also has annual Big Bang launches that typically
represent a new technology. Its 2005 Big Bang, announced in July, features "a breakthrough ink-based printing
platform" that the company has had in development for five years.
With both types of launch, HP relies heavily on its well-developed postponement strategy to make the supply
chain work. Spofford explains that contract manufacturers in places like China, Malaysia, Singapore and
Thailand produce base components or "product engines" under close HP supervision. These are moved via ocean
freight in bulk, "which allows us to achieve a much higher freight density," to a product completion center in the
destination region. "At that center we do everything from just boxing out the product to adding specific software
and in-box material," says Spofford. If a product upgrade is being introduced, the completion center may also
refresh the firmware.
With new products, "we start shipping early to build inventory up in the region prior to the launch to our
resellers," Spofford says. This means that often shipments begin before a final version of the new product

software is complete. "This is where the real value of the product completion center comes in," he says. "It
allows us to use the time that product is on the ocean to finalize the firmware and software that will be added
later. The product completion center basically adds time to the design cycle." Since time to market is the single
most critical factor in new product success, this added time is crucial, he says.
Spofford also notes that logistics planning begins in the very early stages of design. "To give you an idea, we
have all of our '06 Big Bang products already mapped to a specific supply chain and we have our '07 products
pretty well defined," he says.
HP doesn't have a specific logistics process for NPI, however, says Bischoff. "We have various service level
agreements in place with air and ocean carriers, even domestic carriers, and we work through these to achieve
the services we need," he says. "For example, if Tim needs to expedite a shipment, we have a solution on hand,
ready to go." Bischoff's team operates at the corporate level, serving all of HP's business units, not only printing.
"Our challenge as an organization is to have logistics solutions available that meet all of the requirements of
these different businesses," he says.
IBM, Armonk, N.Y., also has a rapid churn of new products, with major platforms renewing every 12 to 18
months and smaller upgrades occurring in between. "We clearly introduce new products more frequently than
ever before and because of that we need a very robust process that is repeatable," says John McAlpin, director of
worldwide engineering for IBM's Integrated Supply Chain.
IBM's NPI process is designed to increase speed to market. "We have a process that allows us to do many
different activities in parallel," McAlpin says. "So planning for service and maintenance, sourcing,
manufacturing, distribution-all of these are going on while the product is being developed." There is a lot of
research and development prior to a formal commit stage, he adds, but once a commitment is made to go forward
with a product, all systems start to move. "What makes this process hum is the fact that all the team members
work together in parallel through the whole process," McAlpin says. "This allows us to bring product to market
as early as possible while ensuring that we have the highest quality and best cost point possible."
The entire integrated supply chain, which encompasses global logistics, is represented in this process. "Integrated
is the key word," says McAlpin. "We might decide on a manufacturing strategy, for example, that calls for all
initial production of a new product to come out of one of our global factories. The global logistics team has to
look at air capacity and other transportation coming out of that region to ensure there is enough cargo capability
to bring in parts and to ship product around the world. They also have to make sure we have all the import/export
licenses we need and all the other customs documentation." IBM's distribution team based in Boulder, Colo.,
"interfaces with us through the whole design process, making sure that all of the logistics are being worked out at
the same time that the product is being developed," says McAlpin.
How IBM packages new product is another very critical part of development cycle, McAlpin says, adding that
the packaging engineers report directly to him. "As we are developing product, the packaging engineers work
closely on development of the surrounding box to make sure the box not only meets customers' needs but can be
used in the supply chain efficiently," he says. Boxes may be reworked to achieve better loading efficiency or to
make the packaging more protective.

3. What strategies do you suggest for maintaining procurement serviced levels?

Creating a pre-qualified supplier pool in which all suppliers are uniformly and objectively evaluated. This
allows the buyer to hand pick suppliers and limit the pool to just those with which it has done business. Of
course, others can be added, but the key is knowing the suppliers in the pool as a first level of quality control.
You only want suppliers bidding on your projects that have proven that they can deliver quality work, on time.
Creating thorough bid specifications with full details before an invitation for bids is sent to the suppliers in the
supplier pool. Being complete so changes are avoided later allows suppliers to price accurately and best
determine when there will be an opening for doing the job.
Creating a fair bidding environment in which the system matches buyer project specifications only with
suppliers capable of doing the work. With detailed project and supplier data, the system will automatically match
each project up for bid with only those suppliers with matching capabilities. This levels the playing field.
Creating efficiencies to save time and money since critical data already is in the system, the buyer does not
have to "reinvent the wheel" each time it wants to put a project out for bid.
Creating mutual acceptance of the process whereby every supplier in the pool knows that it can bid low on
any project. Bidding low with traditional procurement methods can handicap a supplier because the buyer more
than likely will expect that same low price going forward. Not with the latest methodology. With the newest
approach, all know that success is based upon bidding low to fill production downtime. The suppliers with open
production time to fill will vary from project to project.
Calling for and awarding bids in a timely manner so the winning supplier will hold a slot for the project,
schedule staff, prepare equipment, order materials and make other preparations required to do the work.
Suppliers learn that performance is required to receive opportunities, while price is the criteria to win projects.
Establishing full transparency by sending bid results to all suppliers that submitted a bid. This not only creates
greater credibility for the buyer/sourcing consultant among suppliers, it also promotes improved competition.
Monitoring every step of the workflow process to ensure clear communications, attention to every detail and a
deliverable end product. This must begin with the conceptualization of the project and continue through edits,
changes, reporting, production, packaging and delivery. The project manager will determine who has access to
the system and when so input is transparent and thoroughly documented.
Ensuring that work is performed per specifications and on time by establishing full accountability, the buyer
is protecting itself against delays that could cause artificial pricing hedges in future bids from the winning
supplier.
Completing the project with accurate invoicing by making sure the invoice is complete, correct, agreed upon
and reconciled, both the supplier and the buyer successfully end the project.