As a supply chain manager, service system design is a core and vital aspect of your job. Your company’s identity—and future—is defined by its ability to meet customers’ real needs. Yet, despite its importance, few companies excel at creating remarkable customer experiences. Although found in the B2C setting, evidence of this challenge is seen in Figure 1-11, which shows almost 20 years of data from the American Customer Satisfaction Index (ACSI). The ACSI, which debuted with a score of 74.2 in 1994, remained essentially unchanged over the following 18 years. Given research shows that companies with high ACSI scores enjoy greater stock-price appreciation than their lower-scoring rivals, this finding is curious and disappointing.60 The question arises, “Why is it so hard to improve customer satisfaction?” Two explanations persist:
- Managerial commitment—Remarkable experience requires intimate insight into customer expectations and supply chain requirements. It also requires unique and reproducible orchestrated capabilities. Despite the language in their mission statements, few companies have demonstrated sufficient commitment to execute both sides of the customer-experience equation.
Rising expectations—Remarkable experience also hinges on a company’s ability to deliver positive surprise. The customer experience must be different and better than the competition. If one company improves its value proposition (think Amazon.com’s next-day free delivery), customers will adjust their expectations. As rivals match the service offering, what once was remarkable becomes routine. To be consistently remarkable, you have to constantly improve.
Figure 1-11 American Customer Satisfaction Index, 1994–2012 (4th quarter scores).
Actually, these two explanations intersect—it is very tough to remain committed and aptly invest in the strategy, structure, and systems needed to profitably offer remarkable service. As logistics order fulfillment is often the last touch a firm has with its customers, it can make or break your company’s reputation, requiring you to understand fully the nature of order fulfillment.