What is the Right Logistics Service for Your Customers?

Markus Gerschberger, Michael Plasch, Theodore M. Farris

Research output: Contribution to journalArticlepeer-review

Abstract

Purpose: Companies are pressed to adopt customer value strategies in order to grow profits and ensure long term survival. The objective of this paper is to share a procedure for segmenting customers by logistics demands and identify underlying consequences and efforts for internal and external supply chain flows. Methodology: The study adopts an inductive approach and uses the case method of investigation. A longitudinal case study was developed from primary and secondary sources. In addition to information gathered from interviews and workshops, hundreds of pieces of documentation were used to reconstruct past events (including past customer orders, documents from order initiation to fulfilment) permitting triangulation. Pattern-matching logic was employed as case development progressed, continuously comparing 1) theoretical background and 2) customer segmentation made at different points in time from expert opinions. Findings: Factors influencing customer alignment and segmentation from a supply chain perspective including lead time, order quantity, product specification, storage and production mode influencing 1) the appropriate allocation of customer into segments and 2) cause-based allocation of costs. Research limitations: Limited by the specific research setting (country and industry) and the applicability to producing companies. Practical implication: Assists supply chain managers in prioritizing customers based on their logistics requirements with a structured decision-making process that combines interdisciplinary decisions (boundary-spanning) and fosters understanding logistics support. Originality/value: An applied procedure is offered using customers’ logistics requirements to develop customer segments and delivery channels beyond extant literature.
Original languageEnglish
JournalInternational Journal of Physical Distribution & Logistics Management
Publication statusIn preparation - Dec 2017

Keywords

  • Supply chain segmentation
  • Customer alignment
  • Logistics service efforts
  • Customer segmentation

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