An evaluation of the outbound logistics customer service of a multinational company in the South African FMCG industry.

Abstract

Companies seeking competitive advantage in the highly competitive fast moving consumer goods (FMCG) industry can no longer differentiate themselves from competitors on products and pricing alone. Customer service and the perceived value that customers gain from suppliers is key in staying ahead. The FMCG industry in South Africa (SA) does not place much emphasis on evaluating customer service. This study is an evaluation of the outbound logistics customer service of Unilever Home and Personal Care (UHPC), a multinational FMCG company in SA. The study focuses on attributes of customer service that major retail customers with distribution centres {DC's) consider important and evaluates logistics customer service against key competitors. A survey of three major retail customers' of UHPC was conducted in the major regions of SA. Thirty self-administered questionnaires were sent out to staff at Shoprite, Clicks and Spar DC's across SA. Staff targeted were those associated with inbound logistics and included people as senior as DC Managers to Receiving Controllers. As these are specialised job functions, the sample size comprised of only 30 respondents. A total of 24 responses were analysed to determine the attributes of customer service which UHPC customers consider important and also to determine the perceived performance of UHPC against other competitors. The results revealed that DC customer consider order accuracy, timeliness of delivery, order quality, product availability, order fulfilment, personnel contact, cooperation of supplier, alerts on transportation delays, relationship with supplier and service level agreements to be the ten most important attributes of logistics customer service. The different customer groups did not rank the attributes in the same way. Shoprite and Clicks perceive UHPC's logistics customer service to perform from good to excellent on all 32 attributes whilst Spar felt that UHPC under-performed on 8 attributes. UHPC was highly rated amongst key competitors in the local FMCG industry and outperformed competitors on 28 attributes of logistics customer service. The following areas of improvement were identified for UHPC: order discrepancy handling after delivery, quality/durability of packaging, personal contact knowledge and ability and helpfulness in solving problems and supplier innovation in improving delivery. Recommendations for improvement in UHPC's logistics customer service were made based on the results and the literature review which included repeating the survey at least quarterly on attributes needing improvement so as not having to wait for at least 3 years for another competitor benchmarking survey.