Customer Satisfaction Survey. by Michael S. Watson -- Northwestern University and Alex Scott -- Penn State University

Transcription

1 Custmer Satisfactin Survey by Michael S. Watsn -- Nrthwestern University and Alex Sctt -- Penn State University

2 Authrs Michael S. Watsn. Mr. Watsn is an adjunct prfessr at Nrthwestern and partner at Opex Analytics. He has taught peratins and supply chain classes since He has written a ppular text bk, Supply Chain Netwrk Design. And, he has been wrking with the industry fr the past 15 years running strategic supply chain prjects and managing sftware with LgicTls, ILOG, and IBM (ILOG acquired LgicTls, and IBM acquired ILOG). Alex Sctt. Mr. Sctt is in the supply chain Ph.D. prgram at Penn State. Prir t this he wrked at LgicTls, ILOG, and IBM. In additin, he had previusly wrked in the 3PL space fr J.B. Hunt and Kenc. OUR EXPECTATIONS GOING INTO THE SURVEY Neither f us had wrked fr (r even heard f) NCS prir t the study. We were ging t cnduct phne and interviews with 100 NCS custmers (and we actually did). We wanted t be as bjective as pssible and be able t prvide NCS with feedback n what they were ding well and where they culd imprve. But, we had n idea what we might be getting int. Trucking is a tugh business, and it is hard t get it right. We knew that NCS was the little player between the large Walgreens and the large CPG cmpanies. We ve been arund lng enugh t knw wh wuld get the blame if things weren t wrking. And, we knew peple in the shipping department were ging t let us knw hw they felt. Were we ging t get have t listen t endless cmplaints and accusatins? We didn t expect what we ended up finding. 5AM MANDATORY SUPPLIER MEETINGS Smetime right arund the time cmpanies were wrrying abut the Y2K bug, Walgreens called a mandatry meeting fr all their suppliers attending a natinal cnference fr drug stre chains. Like all gd legends, the exact start time f the meeting is in sme dispute. Sme remembered it starting at 5AM and remember that sme flks decided t stay up all night t attend rather than wake up early. Or, maybe it started at a bit mre reasnable time f 6AM. In any case, this was the first time that many f Walgreens suppliers had heard f NCS. At this meeting, Walgreens was putting the pressure n their suppliers t ship their LTL lads thrugh NCS. NCS wuld cnslidate and ship int the Walgreens warehuses. The suppliers were tld that NCS wuld have favrable rates, and that NCS wuld be a preferred carrier and be able t get dck dr appintments with Walgreens. This was Walgreens way f getting a better handle n the inbund LTL freight. And, this prgram wuld help the suppliers get their prducts n the shelf faster. NCS NCS CUSTOMER SATISFACTION SURVEY 2

3 We gt all this infrmatin frm the questin, Hw lng have yu wrked with NCS and why did yu start? We were surprised by the sheer number f peple wh remember that meeting as the first time they met NCS. The reasn that the stry is impressive is that the peple telling it are still happy NCS custmers. As we interviewed mre and mre cmpanies, it became clear that peple really liked wrking with NCS. The fact that s many peple were at that meeting and still happy after mre than a decade was impressive. It is als telling that many peple had brught NCS int their new cmpanies when they switched jbs. NCS tk gd care f them at their previus firms, and did s again at the new firms. In the survey, the vast majrity f the custmers said they were very happy with NCS and the remaining nes said they were happy. Nw, it is clear that Walgreens strng-armed (nt frced) many f these firms t start using NCS. Walgreens needed a critical mass t make cnslidatin wrk. N matter what the feeling was fr signing up fr NCS, all the suppliers were happy with the service and many f them wuld like a similar service fr ther retailers. And, fr thse suppliers nt at the 5AM meeting, sme newer suppliers claimed that Walgreens strngly recmmended that they switch t NCS. The primary reasn was that the supplier was ding a very pr jb f delivering int Walgreens. These suppliers, like the thers, were very happy nce they switched. And, delivery perfrmance imprved dramatically. In the end, we fund an extremely happy custmer base. We wrked hard t try t find sme prblems with the NCS system we culd reprt n, but had very little luck. If anything, NCS custmers wanted them t expand t serve ther retailers. RETAIL-SUPPLIER COLLABORATION DONE RIGHT S, why are NCS custmers s happy? A theme that ran thrugh ur survey respnses was that NCS helped make wrking with Walgreens easy. We ve all read a lt abut cllabratin in the supply chain. This is ften easier said than dne. The reasn it is difficult is because yu have t get all the little details right. Fr example, tw pallets f prduct need t physically mve 750 miles frm the supplier s lcatin t a Walgreens warehuse. A lt can g wrng in this mve: the rder culd change, the supplier culd be late, the carrier might nt shw up at the supplier n time, the carrier might nt shw up at Walgreens n time, the prduct culd get damaged, and s n. In ther wrds, there is a lt f variability in this simple prcess-- and, a lt that can ruin the best intentins f cllabratin. NCS July 2013: NCS CUSTOMER SATISFACTION SURVEY 3

4 What we heard frm the interviews was that NCS culd absrb a lt f this variability. If a supplier was ging t be late, they culd crdinate with NCS t arrange different pick-ups r t hld a truck utbund fr Walgreens fr anther hur. NCS culd als wrk with Walgreens t make sure the supplier s prduct gt t the dck dr with the needed paperwrk. NCS can t remve the variability. Hwever, by having a dedicated team fr Walgreens and a strng system fr taking care f the shipper, the survey shwed that NCS culd make sure this variability didn t impact the shippers r Walgreens. S, when yu are thinking abut better cllabratin, it is gd t have a firm like NCS playing a rle in absrbing variability and making sure the little things all get dne crrectly. Related t this, many f the suppliers stressed that they valued the relatinship that NCS had with Walgreens. This gd relatinship, in turn, meant they culd have a better relatinship with Walgreens. In fact, since Walgreens is nly ne retailer, the respndents in the survey culd cmpare this with ther retailers. At ther retailers, they had truble getting dck dr appintments, they had truble with shipments being rejected, they had prblems with lng lead times t get their prducts int the ther retailers, and s n. Withut NCS in the middle, the relatinship was nt as smth and the shipper had t spend a lt mre time wrrying abut all the small details. BUSINESS VALUE Trying t determine business value can be tugh in a survey. Price negtiatins are a sensitive tpic and it was clear that we weren t in a psitin t negtiate. S, we stayed away frm price, but still asked questins abut the business value. Withut asking, many peple claimed that NCS s ttal cst was less because they spent less n late fees, returned items, accessrial charges, inventry carrying cst, and s n. A few cmpanies mentined the business value f getting the prduct int Walgreens and n the shelves faster. But, by far, the biggest business value was the gd service and cnsistency f getting prduct int Walgreens. We had many qutes like the fllwing: Once we turn ver the freight, we dn t have t wrry abut deliveries. Makes servicing Walgreens much easier and ffers better perfrmance than I can d n my wn We view NCS as an extensin f Walgreens." The survey als revealed that many f these suppliers wuld like t see NCS ffer this service t ther retailers. This shws that the prgram brings real business value and allws the supplier t fcus n ther aspects f the business and nt wrry abut the small NCS NCS CUSTOMER SATISFACTION SURVEY 4

5 details f getting prduct int Walgreens. In fact, if there was ne cmplaint, it was that NCS didn t ship t anyne besides Walgreens. We tk ur raw ntes and created the Wrd Clud yu see belw. Yu can see that Service cmes ut clearly as an imprtant business value. CONCLUSION We were pleasantly surprised by the fact that NCS had such a happy custmer base. Thrugh the survey, we fund that NCS is a cmpany that is extremely fcused n getting the peratinal details right. They play a critical rle in keeping LTL vlumes flwing smthly frm suppliers int Walgreens. This makes it easier fr suppliers t wrk with Walgreens. And, these LTL shippers value NCS fr playing this rle. NCS July 2013: NCS CUSTOMER SATISFACTION SURVEY 5