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    June 16, 2016

    3 Logistics Miracles Made Possible With Real Time Data, Miracle #1: Customer Service

    Nothing is free. And nothing happens by tomorrow. At least, that’s the mantra business owners have chanted to themselves for centuries.

    Business is driven by value, and value is something that takes time to build...and it should be paid for accordingly. Unfortunately, those simple truths are often turned into excuses for excessive fees, slow deliveries, and other disappointments. For the most part, consumers have continued to put up with these issues.

    Today’s businesses do not exist in that world anymore. Logistics giants like Amazon have leveraged everything from local warehouses to massive economies of scale to reset expectations. Other businesses are now feeling the impact of Amazon’s service: Customers have become accustomed to low prices, free shipping, next day delivery, and a host of other logistics miracles. 

    Fortunately, there is a powerful tool that businesses--even those much smaller than Amazon--can use to keep up with these growing consumer expectations: Real time data. By controlling how data is collected and “pushed” to the appropriate users, smart systems can achieve efficiencies without radically altering operations (no open-heart surgery, so to speak) or necessitating huge labor and technology costs.

    How does having data in real time affect customer service? When a product is ordered, you need to have it in stock and ready to process. If it is not in stock, or the item is damaged or otherwise unavailable, you risk getting into a backorder situation. With so many merchant options just a click away, customers are all too willing to cancel their orders and go with a different vendor if their purchases cannot be delivered on time. 

    For example, take a customer who orders a lighting fixture for a newly renovated bathroom. The customer needs the product within a certain time frame so it is ready to install when the electrician is available. Imagine what would happen when, the day the fixture is scheduled to be delivered, the customer gets an email saying that the item is backordered. Or worse, that it has been recalled. The customer is now stuck paying the electrician for a visit, but does not have the product ordered—or any idea when it will be available.

    How Real Time Data Helps

    In this situation, there are many points in the process at which having accurate data could have prevented this from happening. For example:

    • With real time data, the business owner and procurement officers would have known exactly when any items were about to go Out of Stock. They would then be able to put a purchase order in motion, preventing an Out of Stock situation.
    • Even if the item did go Out of Stock, the real-time inventory data could have been integrated with the client-facing eCommerce site so that exact inventory levels were reflected. The customer, after being notified  that an item would take longer to ship, would then plan accordingly.
    • Once the customer places an order, the right software would allow tracking the item’s progress through the warehouse to the carrier to his home, so he knows exactly when to expect it.
    • If there is a problem—like the recall above—both the merchant and the customer would be immediately notified. The customer could be given recommendations for comparable products that are in stock and ready to ship.

    At each step of the order process, having real time data anticipates problems and allows open and honest communication with the customer. The end result is a seamless experience for the customer, who is constantly updated with relevant purchase information.

    From this example, we can extract five tips for using real time data to enhance the customer experience in your organization: 

    • Monitor your inventory. Here at Infoplus, one of the core rules we tell procurement managers all the time is “Know thy inventory.” Quantities matter but, like money in the bank, knowing what you have is just as important for business.
    • Use exceptions and alerts. You cannot wait several days for a floor count to discover an item has gone Out of Stock. Invest in software that will alert you as soon as a situation arises so you and your team can be proactive about resolving the issue.
    • Keep your website and eCommerce software up-to-date on inventory levels. Customers should be able to directly see what’s available to order, what’s in Low Stock, and what is Out of Stock. They should also have accurate estimates of shipping time and cost.
    • Keep the customer informed. Today’s customers have expectations and, like the example above, they often make plans based on delivery estimates. Keep them informed--both when things run smoothly and when there is a problem.
    • Manage those recalls. By one count, there were over 400 different product recalls by the FDA in 2017 alone. Items need to be tracked precisely, especially if prone to recalls (for example, food items). Customers need to be made aware when a recall happens, especially if it affects their orders.

    Of course, customer service is just one area of commerce that is improved by having real time data. In our next two posts, we will expand on the need for real time data by looking at other areas ripe for improvement: Labor management and product delivery.

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