Customer Service Measures Research Articles

Impact of Digital Evolution on Customer Relationship Strategies in the Banking Sector

Digital evolution in the banking sector refers to the integration and development of digital innovations, such as internet banking, mobile applications, AI, and data analytics in banking operations and customer service measures. The research examines the influence of digital development on customer interaction strategies in the banking sector. As banks increasingly adopt digital tools to meet customer expectations for convenience and personalized services, the dynamics of customer relationships are changing. The study purpose is to understand how digital transformation influences customer engagement, satisfaction, loyalty and challenges banks face in maintaining personalized interactions in a digital environment. The study looks into a number of factors, including digital engagement, customer satisfaction, service personalization, customer loyalty, service accessibility, trust and security. The study involves 600 banking customers filling out a questionnaire after being informed about the purpose of the survey. SPSS was employed to conduct various statistics tests such as, pearson correlation, chi square, and t-test the obtain data and variables. The result indicates a positive correlation between the adoption of digital banking solutions and increased customer engagement. Research results underscore the importance of continued investment in a digital technologies to maintain a competitive edge in the banking industry. Banks that effectively integrate digital tools into their customer relationship management practices are better positioned to evolving requirement of customers, leading to improved satisfaction and loyalty.

The impact of stockout‐based switching on fill rates

AbstractThe possibility of product substitution due to a stockout provides retailers with a buffer against lost sales but can also complicate the management of inventory because both substitute and primary demand affect inventory levels. Since most retailers make their inventory decisions around a desired service level (e.g., fill rate), it is important to understand how customer substitution behavior can influence different measures of customer service. In this study, an extensive theoretical framework is presented and used to develop a decision tree approach for predicting realized item and category fill rates. We find that item fill rate is primarily a function of the target service level of the focal item and the willingness to switch from an alternate item to the focal item. Category fill rate is influenced by the target service level of both items, with willingness to switch amplifying their effect. The decision tree approach is found to be an accurate predictor in most cases, however, it tends to overestimate item fill rate when the willingness to substitute from the alternate item increases. The approach also accurately predicts category fill rates, outside of scenarios with asymmetric substitutability.

The Regression Model and the Problem of Inventory Centralization: Is the “Square Root Law” Applicable?

The research problem undertaken by the authors of this article concerns the optimization of the size of the distribution network (the number of warehouses). The authors developed regression models, which are an alternative to the classical “Square Root law” optimization formula. The models were built for the two distributions of demand most commonly used in the literature: Gaussian and Gamma distribution. They allow the calculation of the level of inventory with a given number of warehouses and the level of stock availability as a measure of logistic customer service. The aim was to create a useful tool for decision-makers in companies. The models were elaborated on the base of the simulations carried out for various products (loading parameters, value), sales volumes, number of warehouses, and different standard deviations. Both regression models were statistically significant; the coefficients of determination are relevant. A slightly better value was obtained in the case of Gaussian distribution. The results obtained with the use of the classic “Square Root law” were in some cases quite similar. However, the type of distribution and the variability of demand, measured by standard deviation, have a significant influence here. Thus, the authors believe that the models developed may give more accurate results and that the “Square Root law” formula should be modified taking into account the characteristics of the demand. After completing the regression models with cost components, the total costs were calculated for selected cases of product groups (food, electronics, garments), different levels of the availability of stocks, and different number of warehouses. As it turned out, centralization may not necessarily be the optimal strategy for the most expensive goods. Loading parameters are also important, as they have a significant impact on the costs of storage and, above all, transport.

Assessment of logistic customer service in the CEP sector on the example of Cracow

The services sector of Courier Expressways and parcel (CEP) is one of the fastest-growing service sectors. This is due to a specific evaluation of quality by customers in the final stage of the supply chain – what has been called the last mile problem. Logistics customer service is a key tool for building the company’s competitiveness in the market. This article evaluates the effectiveness of X-Press Couriers customer service focused primarily on timely delivery of services and the number of complaints filed. Acquisition of information on this subject was allowed by access to the complaint database and the Trucker system. The characteristics of the courier business in Poland and the assessment of cooperation with Polish companies of TSL was done. On the basis of the research conducted by the SGH Center for Economic Counseling and Expertise, the impact of KEP on Polish companies was illustrated. Data provided by the X-Press Couriers division of Cracow allowed us to focus on one of the most important logistic measures of customer service, ie the timeliness of service. The presented data is based on the knowledge gained while working in this company and on the collected statistics.

Cost-service tradeoff analysis of reorder-point-lot-size inventory models

Inventory control involves tradeoffs between conflicting criteria such as operating cost and customer satisfaction. This paper presented two bi-objective inventory models to minimize inventory cost while maximizing customer service. Two popular measures of customer service, cycle service level and fill rate, are used in the modeling process. The decision is to search for the control policies in terms of safety factors and lot sizes that approximate the Pareto-optimal front in the objective space. Analysis adhering to multi-objective notion is conducted not only in its formulation but also in the computing and evaluation. To highlight the differences between the cycle service level model and the fill rate model, solutions from them are compared against each other thoroughly in both the objective and decision spaces. Quality measures and graphical illustration of the solutions show that control policies obtained from both models are mostly non-dominated to each other in the objective space. The fill rate model is capable of generating control policies with higher service levels. Also, it could be likely for the fill rate model to generate policies that are appealing to decision makers, such as those with adequate lot size and/or safety stock. This agrees with our intuition that cycle service level is usually less informative as a shortage measure than fill rate.

Modelling the measures of supply chain performance in the Indian automotive industry

Purpose – The purpose of this paper is to investigate the interactions among the key factors of supply chain (SC) in the Indian automotive industry. These key factors are helpful to measure supply chain performance (SCP) and to improve the firm’s effectiveness. Design/methodology/approach – In this paper, an interpretive structural modeling with a fuzzy cross-impact matrix multiplication applied to classification-based approach is used to examine the interactions among the key factors of SCP measurement. Findings – The authors have identified the most dominant key factors used for measuring the performance in automotive SC. The results exhibit that the order lead-time and order entry method are the most significant key factors. These key factors have high driving power to measure SCP whereas the post-transaction measure of customer service and customer query time are highly dependent on other factors. Such relationships among the key factors can help a firm’s top management to make essential judgments in order to solve the overall SC problems and provide a better approach to proactively deal with problems. Originality/value – In this paper, the authors have explored the interactions among the key factors of the SCP in the Indian automotive industry.

To Evaluate Cost Savings in a Supply Chain : Two Examples from Ericsson in the Telecom Industry

An accurate cost analysis is necessary to evaluate changes in a supply chain; this article shows how a rather simple framework can be used when evaluating changes in a supply chain. The framework is built on a Supply Chain Cost (SCC) model and customer service measurements, delivery precision and leadtime. Both suggested changes in a supply chain and already executed changes can be evaluated by the framework. Two different examples from the company Ericsson are presented to illustrate the framework, which is a 5 step analysis model. The existing, or pre-existing, supply chain is analysed, described and defined. The SCC and performance measures are measured and/or estimated. Improvements are designed and defined. The same measures as before are measured again. The measures from before and after the change of the supply chain are evaluated to decide if the changes are improvements or not. Cutting costs in one area of the supply chain can be a mistake if not the total supply chain is considered and the total SCC. Considering both the SCC part and customer service measures present a wider understanding of the change. It is shown that SCC can be used as a tool to identify cost savings and evaluate if a change project will, or has, resulted in the cost savings the project aims for. Rough standard costs measures should be avoided instead actual costs should be used as much as possible. The used framework hopefully stimulate to similar analyses in other companies with other supply chains.

Forecasting Method Selection Based on Operational Performance

This paper evaluates alternative forecasting methods based on operational performance in a global specialty chemicals supply chain. The forecasting methods evaluated in this study are simple exponential smoothing, exponential smoothing with additive trend, and exponential smoothing with damped additive trend. These methods are evaluated at various target customer service levels based on the operational performance of the supply chain. The operational performance measures used in this study are total supply chain costs, broken down into inventory, production and shipment costs, and also four different measures of customer service level. The company’s supply chain operations are simulated and the results are analyzed using the Analysis of Variance (ANOVA) procedure followed by the Tukey’s means test. The effects of using the competing forecasting methods on each of the performance measures are evaluated and discussed individually. Our results underscore the importance of incorporating all relevant costs and customer service measures into the forecasting method selection process, which is only possible with a thorough understanding of the supply chain dynamics. In the environment we modeled, exponential smoothing with damped additive trend was by far the best in terms of both resulting supply chain costs and customer service levels, followed by simple exponential smoothing and exponential smoothing with additive trend.

Assessing Service Attitude: Service Quality Measures Taken by Islamic Banks in Pakistan

In the past few years there has been an enormous change in the perception of owning customers for life by the local and multi-national companies in Pakistan. This could be possible when foreign companies entered into Pakistani market especially in the banking sector. Quality Customer Services is considered most important tool to have positive image in the mind of customers and to get positioned in their hearts by owning their greater concerns beyond their expectations. The purpose of this study was to assess service attitude and service quality measures of Islamic Banks in Pakistan. Population of the study is all five Islamic Banks listed with State Bank of Pakistan (2012). Total 250 customers, 100 Management Trainee Officers and 25 Branch Managers constituted the sample using convenience sampling technique and an adapted SERVQUAL instrument of service quality containing five dimensions of service quality; tangibles; reliability; assurance; responsiveness and empathy was used to assess the service quality measures which was found reliable at 0.86 Cronbach's alpha. Mean scores and One-way ANOVA were used for significance and variance analysis. Results revealed that Islamic banks managers showed greater satisfaction about service quality followed by MTOs but customers were not satisfied with the service quality of Islamic banks and significance difference of opinion found among customers, management trainee officers and managers which showed true image of service attitude. Islamic Banks customer service measures needs urgent improvement in order to ultimate survival in the banking sector.

Service-oriented decisions on inventory levels in the case of incomplete demand information

New products without historical demand information or slow-moving items with little such information cause difficulties in defining inventory management policies facing demand uncertainty. The classical approach using the Normal distribution for describing the random demand during lead time might lead to a degraded level of customer service. But the choice for other types of distributions is also no option, so it is realistic that the full functional form of the distribution is unknown, but the decision-maker has some but not incomplete information on the demand distribution during lead time. As the distribution is only partially specified, several distributions satisfy the known information. Customer service measures therefore also take values in an interval between a lower and an upper bound. In this paper, upper and lower bounds are determined for two performance measures: the number of stock-out units and the stock-out probability per replenishment cycle, given incomplete information about the demand distribution, that is only the first two moments and the range, are known. Based on these results, the optimal inventory level given the desired maximum number of stock-out units or the desired maximum stock-out probability is calculated for the case where only the first two moments are known. The results of our approach are compared to the more traditional approach where a Normal distribution of demand during lead time is assumed. Comparisons with the Gamma, Uniform and symmetric triangular distribution are made. Furthermore, the robustness of our bounds to uncertainty in the parameters is tested.

Airline Financial Distress and Customer Satisfaction

An investigation is conducted on the effect of financial distress on customer service levels in the U.S. airline industry. Using data from the first quarter of 1998 to the third quarter of 2006, we employ a seemingly unrelated regressions (SUR) model to analyze the impact of financial distress on three measures of customer service. We find that higher financial distress is associated with better on-time performance of airlines and fewer lost bags. The relationship of airline financial distress to the number of bumped customers, however, is insignificant.

Connect Time Limits and Performance Measures in a Dial-Up Modem Pool System

Managing customer service is critical for both nonprofit and for-profit dial-up modem Internet service providers. When system operators face excess demand, they can either add capacity or adapt their management techniques to deal with their limited resources—this article considers the latter. We examine system configuration options and the resultant effects on customer service levels in a simulated dial-up modem pool operation. Specifically, we look at a single pool operation and examine the effects of imposing time limits in a seriously overloaded system. We analyze the results on several key customer service measures. The results show that imposing these limits will have a distinct, nonlinear impact on these measures. Customer productivity and actual system load are shown to have major impacts on the performance measures. Interactions between several system and environmental parameters are also discussed.

All in the name of change: effects of organizational change on performance measures of customer service in the health care industry

This research examines the effects of organizational change (i.e., change of the hospital name, chief executive officer (CEO), and ownership) on objective performance measures of customer services (hospital beds, payroll, full-time employees, and patients served) in the health care industry. Archival data were collected from 155 Hospitals in the State of Tennessee for four consecutive years. During that time period, there were a lot of mergers and acquisitions (M&A) and organizational changes in the health care industry in Tennessee. Results suggested that there was a significant reduction of hospital beds and a significant increase of payroll during the four-year period. These changes were more significant in urban hospitals than in rural hospitals. In the four-year period, a change of the hospital name resulting from a merger had increased the efficiency of serving customers (patient/FTE ratio), while those without the change had decreased the efficiency. Our results reveal some evidences that acquisitions may be related to short-term financial benefits as expected

Dynamic pricing for multiple class deterministic demand fulfillment

We consider how a firm should allocate inventory to multiple customer classes that differ based on the price they pay and their willingness to incur delay in fulfillment of their demand. The problem is set in a deterministic demand, economic-order-quantity-like environment with holding, backorder, lost demand and setup costs. The firm either fulfills demand or offers a price discount to induce the demand to wait for fulfillment from the next reorder. We determine the optimal policy and discuss how changes in various parameters affect profitability, customer service, and operational measures such as order frequency and base stock levels. We compare the results to a policy that only rations inventory without dynamic discounting and to a policy that only provides discounts. Through the comparison, we observe that dynamic pricing can be seen as a combination of a pricing mechanism which determines demand and an allocation mechanism that differentiates between customer classes, serving each ones needs. We show that if lower-value customers are distinguished by accepting reduced service, it is possible that both high and low-value customer classes see better levels of service under the optimal policy than under a discounting only policy. In addition we demonstrate the applicability of the results to a stochastic version of the problem.

The influence of comparative pay, customer service measures and accounting profits upon CEO pay in the UK privatised water industry

The paper investigates the influence of comparative CEO pay levels, customer service measures and accounting profits upon CEO pay in the UK privatised water industry over the period from 1992 to 2001. We argue that political and regulatory considerations can be expected to constrain CEO pay levels and to motivate remuneration committees to link CEO pay awards to simultaneous improvements in both profits and customer service improvements. The empirical results indicate that the most important drivers of CEO pay changes are sales growth and a partial adjustment to comparable UK CEO pay levels. Customer service improvements and accounting profits are also significantly related to CEO pay awards. However, consistent with regulatory incentives that mitigate the inherent financial conflicts between the two performance measures, the results suggest that the influence of customer service improvements upon CEO pay is largely indirect and stems from the impact it has upon the benchmark profit used for performance-related pay purposes.

Profit as a signal of product quality and customer service: performance evaluation for plant managers

Plant managers generally have no direct marketing responsibilities but they have control over product quality and customer service. This paper hypothesises that many firms evaluate these managers on profit because sales, a component of profit, convey information on a plant manager's performance on product quality and customer service. Several predictions are developed from the hypothesis and tested in this study. The chance that a plant manager is evaluated on cost vs profit is predicted to decrease with the sensitivity and precision of sales as an indicator of product quality and customer service. In addition, the chance that a plant manager is evaluated on cost vs profit may be associated with the extent to which the manager is also evaluated on specific measures of product quality and customer service. Empirical results are generally consistent with these predictions.

Simulation study of a two‐level warehouse inventory replenishment system

PurposeThis paper aims to discuss a simulation study for a multi‐product, two‐echelon inventory replenishment system. The paper compares a one‐warehouse N‐retailer replenishment system to a two‐warehouse, N‐retailer system with cost per unit of distribution and delivery lead‐times as the performance measures. The purpose is to demonstrate that under specific circumstances a two warehouse N‐retailer inventory replenishment system provides better customer service without significant changes in the cost.Design/methodology/approachMathematical modeling and simulation methodology is used to test the performance of the proposed two warehouse N‐retailer system and statistical analysis is used to compare the performance of several scenarios.FindingsThe two warehouse replenishment system indeed reduces delivery lead‐times, used as a measure of customer service, under specific conditions such as controllable freight costs.Research limitations/implicationsCaution should be exercised when interpreting these findings as the historical data used was from a single source. The paper did not investigate the effects of variable shipping costs from the manufacturing plant, warehouse and retailer. Future research could also consider multiple second level warehouses.Practical implicationsThe findings provide a persuasive argument for manufacturers struggling with performance issues and channel relationships. Moreover, in addition to contributing to efficiency of distribution, two level systems can also enhance ability to adapt to local market conditions and to unexpected demand variations.Originality/valueThe model examined in this paper addressed a specific case for one company. While freight costs and warehousing costs will vary across companies, the cost represented here may be used as a gauge for evaluating systems with cost structures in the vicinity of those for the company represented in this paper. Additionally, the model is amenable to substitution of other firms' cost structures.

Quality counts – and here's how you do it. Getting the measure of customer service

Quality counts – and here's how you do it. Getting the measure of customer service

A Simple, Robust Leadtime-Quoting Policy

We examine leadtime-quoting polices for minimizing average lead time subject to customer service constraints on fill rate, tardiness, or relative tardiness in simple systems with exponential and normal processing times. By studying the resulting safety leadtimes implied by each policy we gain insight into why some policies perform more robustly with respect to different measures of customer service than do others. This analysis suggests that a simple constant safety leadtime policy should work reasonably well under most conditions. A series of simulation experiments of more complex production environments indicates that the constant safety leadtime policy does indeed exhibit robust performance. This, plus the fact that it is extremely simple to adapt to a wide range of production environments, makes it an attractive basis for real-world leadtime-quoting systems.

Health plan characteristics and consumers' assessments of quality.

Many purchasers and consumers of health care have become concerned about the quality of care being delivered in managed care plans. Little is known, however, about the health plan characteristics that are associated with better performance. We used survey responses from 82,583 Medicare beneficiaries from 182 health plans to study the association of consumers' assessments of care with health plan characteristics. For-profit and nationally affiliated health plans received much worse scores on the outcomes of interest, particularly for overall ratings of the health plan and composite measures of customer service and access to care. Health plans accredited by the National Committee for Quality Assurance did not receive higher scores.