Paper Example on 5 Elements of Customer Service for Sales Orders

1. Introduction

Sales orders can be made by the customers, either manually or electronically. The wholesalers fill in their order requests and send them to the manufacturer. Upon receiving the order, the manufacturing firm then may copy previous orders to match the current products that the customers need. The firm then confirms the availability of the requested goods and set their delivery period to the customers.

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Elements of customer service

Customer service has five main elements. These are respect, serving, understanding, listening, and responding. All these elements have the importance of creating an effective relationship between the manufacturer and the retailers. For instance, our firm, upon receiving the request from our international customer about price reduction, listens to them, and respond accordingly by adjusting favorable prices to them (Network Alliance, 2019).

Types of costs

The company uses the opportunity costs, to cover its stock-outs, loss of their clients and also to provide for other costs that seek to cover some failures in the business such as poor on-time delivery. Hence, the manufacturing firm will have an efficient way of providing cover to these events preventing it from making losses.

Company policy

When the company fails to fulfill the demands of the customers, it develops measures to handle this situation. For instance, the business should ensure that it places purchase orders with all the retailers. Once the items arrive in stock, the firm searches for the clients and distribute the products to all the retailers. Hence, filling the gap that existed in the demand and supply chain between the company and its customers.

2. Technology Requirements

Important technology

The use of Electronic Purchase Order (EPO) would be the best technological requirement for the customers. This method is a quick saving time for the customers. Again, the EPO will allow the company to consolidate and centralize all the purchase orders that they will access anywhere at any time.

Needs for customer service

Customer service is essential to every company. Hence the firm should create a website that will enable the customers to interact with them. Also, it should focus on electronic communication via the use of emails that is very convenient in providing a quick response to the clients' needs.

Cost of technology

Investing in special technology by the company comes with its associated costs that the business must meet. According to research, firms spend around 64% of the annual revenue on IT expenses. Averagely, majority of the companies who use special technology can spend up to $74,000 on purchase and installation of both software and hardware components. Moreover, 80% of the technology cost occurs after its initial purchase.

3. Demand management

Role of demand management

Demand management acts as the link connecting the development of products and the other key business aspects such as brand management, marketing, operations, and sales (Saad & Shahid, 2014). It ensures that demand is satisfied by influencing and prioritizing communications and function plans. Therefore, creating a stable relationship between the firm and its customer through effective delivery of products.

Forecasting role

The forecasting and demand planning functions are the roles of the logistics manager. The company gives responsibility to this department since it can determine the level of stock available, and also the amount needed by the firm. Hence, it can conduct the demand forecast for the business.

Order fulfillment model

Direct fulfillment would be the best model for our company. Based on the budget and the sizable business, we operate our single business will be able to sell its manufactured shoes to the retailers through self-placement and delivery of orders precisely.

4. Financial impacts

The possible financial impact on this company would be an increase in revenue. For instance, the current sales of the firm are recorded as $4,000,000 while its forecast is projected to be $20, 000, 000. Hence, it means that the business will engage in the activities that will promote the sales of its products, enabling it to generate more income. Moreover, upon its acceptance to a price reduction of the products, there will be an increased purchase of the items leading to significant sales.

Strategy profitability model

A strategic profitability model is a tool used to measure the profitability of the firm by using the return on equity. It uses three key components of the business, which are, the profit margin, asset turn over, and leverage. Return on equity (ROE) = Net profit margin*asset turn over*leverage. = 20,000, 0000/4, 000. 000 = 5%

Asset turn over = 250,000/160,000 = 1.5%

Leverage = 6%

Therefore, ROE = 0.05 0.150.06 = 0.0045

Financial assumptions

Financial assumptions are very integral components of this company in terms of financial planning. This assumption must take into projection the company's financial statements such as the balance sheet, income statement, and the statement of the cash flows. The business should have a requirement that presents its forecasted assets against the total liabilities it intends to have in the future. Moreover, from its income statement, the company will also determine the number of sales it intends to make in the future to enable it to maximize its profits.

5. Supply chain metrics

The company should adopt inventory velocity as its supply chain metric. This metric enables businesses to create a balance between the available capital and servicing sales orders (Stangl, & Thonemann, 2015). Again, this method allows the inventory to move very quickly, helping in the inventory planning and product positioning.

The choice for the metrics

The company chooses these metrics because they provide measures of handling tactical issues, including the mandate to handle working capital. Further, inventory velocity helps the firm to lean and the waste of extra stock. Thus, this metric helps in increasing the inventory while reducing the working capital.

Access to the metrics

The person who should access the supply chain metrics is the logistics manager since he has all the information about the inventory, including the forecast. In communicating about the metrics, the logistics officer should reach out to all the departments such as sales and finance within an organization.

6. Recommendations

Based on the analysis, I would recommend the company to consider the adjustment in prices as requested by the retailers. It should adopt measures that will prevent it from making losses after reducing its prices. Again, the firm should also adopt an inventory velocity as the supply chain metric so that it can balance its working capital and sales positioning (Scott, 2014).

As an upgrade measure, the company should invest in modern technology. Through this initiative, it will create a website that enhances its interactions with the customers answering their concerns when they arise. The business must also ensure that it develops effective measures that help in inventory forecasting and planning.

References

Saad, M., & Shahid, W. (2014). Demand Site Management and Demand Response. SSRN Electronic Journal. doi: 10.2139/ssrn.2774167

Stangl, T., & Thonemann, U. (2015). Equivalent Supply Chain Metrics. A Behavioral Perspective. SSRN Electronic Journal. doi: 10.2139/ssrn.2642314

Scott E. Sampson. (2014). "The Customer Service Solution," Journal of Service Management, Vol. 25 No. 1, pp. 161-162

Network Alliance. (2019). Understanding Technology Costs. Retrieved from https://networkalliance.com/understanding-technology-costs/