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In this article a model is described, which enables differentiation of the logistics service that a company offers to its customers. Differentiating this service is essential for businesses with a large variation within their customers and/or products portfolio. The model consists of four phases: cost structuring, profiling, evaluating and differentiating. The application of the model results in a number of customer order profiles that group customers according to their ordering behavior. Each customer order profile can be drawn up for an appropriate logistics service arrangement, in order to balance service and costs. The model helps to transform logistics service from a cost generator to a powerful marketing tool.
Executives are paying greater attention to providing excellent logistics service, an important element of a company's marketing strategy. This effort can be justified by the large amount of opportunities that logistics service offers for creating added value for customers. Customers want their products delivered on time, in the right quantities, in full, according to their own specifications, and at the lowest possible costs. Different customer requirements mean different things. For instance, one customer can be satisfied with a one week lead-time, while another requires a delivery within four hours. Companies that deliver products to a wide range of customers can no longer fulfill all customer requirements with a standard market offer. If the company can offer the appropriate service to a wide variety of customers, logistics service will contribute to the creation of added value to the customers.
Companies must seek a balance between creating added value and the accompanying costs. The C-PED (Costing, Profiling, Evaluating, Differentiating) Model is presented and can be used to establish differentiated logistics service. The C-PED Model was developed during a nine month research exercise, and was carried out within a company that produces cleaning and hygiene systems for industrial and institutional customers [1]. The model can be applied by all companies who deal with complex market environments and differentiate their logistics service to the customer.
In order to illustrate the different aspects of logistics service and the relationship between them, a framework is developed. The C-PED Model describes an approach that can be used in order to differentiate the company's logistics offer to distinct customer groups. The C-PED Model is...