Efficient supply chains are a key driver for improved business performance, according to latest research
28 Septiembre 2009 - 11:10 CET
Milan, Italy, 28 September 2009 - SDA Bocconi School of Management on behalf of CEVA Logistics, a leading global supply chain management company, has released research showing a majority of point of sale managers consider an efficient supply chain as a key tool for improved business performance. The survey also reveals that 79% believe a better logistics service would enable them to increase their revenues.
The survey conducted in June 2009, polled 100 point of sale managers scattered throughout the country across a wide range of commodities sectors from electronics to the book trade.
When asked what impact more efficient deliveries would have on business performance, 51% of respondents said turnover growth would be "moderate", while 28% believe that the increase could be "significant". Only 21% of participants fail to see there would be any impact.
The research also shows that an advanced logistics service, in terms of speed, punctuality, efficiency and personalisation, would affect revenues for two reasons. Firstly, respondents said it would increase consumer satisfaction and loyalty, and secondly, would limit the store's need to have its own stock (see table 1).
Table 1 - Importance of the potential benefits generated by a fast and punctual delivery service (scale 1-low, 5-high)
Greater customer satisfaction and loyalty | 4.6 |
Lesser need to have stock at the point of sale | 3.8 |
Recovery of space due to decreased stock | 3.5 |
Possibility to broaden the range of products with small stock | 3.5 |
The picture that emerges from the research is not only a snapshot of the current state of affairs, but also a trend outlined by the expectations of the interviewees. In the Web 2.0 era, the consumer is more and more demanding and arrives at the moment of purchase highly prepared: the extent of the product range on offer and speed in obtaining a new product or a spare part will more and more determine customer satisfaction levels. Indeed, 62% of respondents believe that the consumer will increasingly assign a higher value to the immediate availability of the requested product, while 25% said the range of alternative products on offer will acquire greater importance.
Logistics operators and points of sale
The research also shows that while 38% of stores are mainly restocked by the warehouses and distribution centres within the company's supply chain, only one in four is restocked directly by the manufacturer's distribution centre. A further 37% of respondents said they receive products directly from the manufacturer without the brokerage of a logistics operator.
On average, customers at points of sale stated they are satisfied with all aspects of the delivery service they receive from the distribution centres. On an increasing scale from 1 to 5, the level of satisfaction stated in terms of speed, punctuality, stock visibility and order status is approximately 3.5.
Time: a key element for the customer
The consumer has also become increasingly demanding when it comes to waiting for a product.According to 55% of respondents at the points of sale - a delivery time that the end customer may consider satisfactory compared to the sector's standards is three days at the most, but one out of five consumers wants to have the product within 24 hours of the order being placed.
Furthermore, the points of sale know their customers well and are able to single-out the key factors that determine their level of satisfaction. On an increasing scale from 1 to 5, and with a score of 4.5, the most essential thing is the immediate availability of the requested product. It is also important for the customer to be able to order the product (score: 4.1) and receive it in the agreed-to time (4.4). If the customer does not find the requested product at the point of sale, in most cases they usually go back to the same store later to check its availability (table 2).
Table 2 - Customer behaviour if the product is not available at the point of sale (scale 1-almost never, 5-almost always)
Orders the product at the point of sale | 3.9 |
Returns to the same point of sale later | 2.9 |
Does not make the purchase at the point of sale | 2.5 |
Purchases an alternative product | 2.5 |
Commenting on the research findings, Gianfranco Sgro, President of CEVA Logistics for Southern Europe, the Middle East and Africa, said: "The results of this survey are important as they remind us that we need to maintain a focus on service variables and customers' changing needs. End customers also need to be taken into consideration by companies that operate on a ‘Business to Business' level. At CEVA Logistics, we have to operate close to our customers to make the supply chain provide outstanding levels of service to end customers."
"The final customer is more and more demanding and it is now clear that some elements of the logistics service, which have long been underestimated at least for some product types, do actually have a central role in the customer's purchasing processes", said Alberto Grando, Dean, SDA Bocconi. "The study underlines that the retailing sector is now aware of this; furthermore, point of sale managers believe that this trend will dramatically increase in the future.In order to tackle this trend, point of sale managers can't just manage their stock, as they have traditionally done: they need to act upon and leverage the initial phases of the supply chain, in order to offer customers truly superior logistics services".
For further information:
Danilo Schipani
+39 02 8923 0354
danilo.schipani@cevalogistics.com
CEVA - Making Business Flow
CEVA Logistics is a leading global supply chain management company. We provide end-to-end design, implementation and operational solutions in contract logistics and freight management to large and medium-sized national and multinational companies. CEVA employs circa 50,000 people and runs an extensive global network with facilities in over 100 countries. For the year ending 31 December 2008, the Group reported revenues of €6.3bn. For more information, please visit http://www.cevalogistics.com/.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT of 1995:
The statements included in this news release, and other statements that are not historical facts, may contain forward-looking statements. In addition to the assumptions specifically mentioned in the above paragraphs, there are a number of other factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements. These factors include, but are not limited to, the process of combining EGL and CEVA, the actual effects of recent and future regulatory changes and technological developments, globalization, levels of spending in major economies, the economic climate in Asia and the US, levels of marketing and promotional expenditure, actions of competitors and joint venture partners, employee costs, future exchange and interest rates, changes in tax rates, unexpected costs of integrating recently acquired businesses and future business combination or dispositions and other factors detailed in risk factors and elsewhere in CEVA and EGL's most recent Annual Reports, including but not restricted to the EGL Annual Report on Form 10-K. Further information concerning the Company and its business, including factors that potentially could materially affect the Company's financial results, is contained in the Company's filings with the Securities and Exchange Commission. Should one or more of these risks or uncertainties materialize (or the consequences of such a development worsen), or should underlying assumptions prove incorrect, actual outcomes may vary materially from those forecasted or expected. EGL and CEVA disclaim any intention or obligation to update publicly or revise such statements, whether as a result of new information, future events or otherwise.
