How to measure and optimize the customer service rate?
Measurement of customer service rate
The service rate is a reflection of the performance of your Supply Chain. There are several more or less complex methods of measuring oneself.
This indicator can be measured in two ways: time and quantity. We measure an OTIF – On Time In Full.
On the On Time axis, this KPI is measured by taking the number of orders delivered on time; we can agree on a number of days tolerated and granted by the third party. There are also two possibilities: on the requested customer date and / or the acknowledgement date.
On the On Full axis, we will measure the quantities delivered against the quantities ordered. A percentage tolerance may also be agreed.
The combination of these 2 indicators makes it possible to establish the efficiency of your Supply Chain.
This indicator can be monthly, weekly or daily depending on your activity.
One could of course imagine measuring a service rate from every angle: by customer, by article (ABC classification), by production line…
How to optimize the customer service rate?
Here again, several methods are to be explored depending on the type of your activity.
As a CDMO in the pharmaceutical sector, we have focused on finding the causes of non-performance in terms of service rate.
Some examples: component failure, inefficient and non-optimized adjustment times… From this we have implemented several actions at the Supply Chain level to overcome these causes:
- Set up a Frozen Zone with an additional delay on components to ensure that components are included in the planning
- Ensure that customer forecasts are received correctly
- Implementation of a flow manager for the follow-up of files
- Challenging TRS
- Work on a more distant horizon in order to optimize adjustment / cleaning times by grouping product campaigns
These actions have allowed us to increase our total customer service rate by 15% and maintain it, but also to have our top 3 customers at 100%.
The quality of a CDMO is not only measured by the price offer but also by the performance to deliver on time and provide you with the expected service.