Logistics and Supply Chain Management, 6th Edition

Setting service standards

Obviously if service performance is to be managed then it must be against predetermined standards.

Ultimately the only standard to be achieved is 100 per cent conformity to customer expectations. This requires a clear and objective understanding of the customers’ requirements and at the same time places an obligation upon the supplier to shape those expectations. In other words, there must be a complete match between what the customer expects and what we are willing and able to provide. This may require negotiation of service standards as clearly it is in neither party’s interest to provide service levels that would lead to a long-term deterioration in profitability – either for the supplier or the customer.

Ideally ...