How KPI Drives Better Customer Service
Do your suppliers meet your customer service expectations?
Do they deliver on time? Are the shipments accurate? Is your inventory stocked and managed efficiently? Do they readily adapt to your changing needs? And when there’s a problem, how responsive are they?
To run a lean, efficient and profitable operation, you need a trusted, reliable partner who works with you, not against you.
BlackHawk Industrial utilizes Key Performance Indicators (KPI) to measure its actual performance against customer objectives. KPI data makes up a “scorecard” that is shared with customers to show how BlackHawk meets their needs.
KPI: A Primer
The goals within KPI follow the SMART method (Specific, Measurable, Attainable, Relevant, Time Frame). Goals need to be specific so that they can be measured. They must be challenging but achievable. They need to be critical to the business, and the time intervals measured need to be sized right so that the results provide meaningful data that can be acted upon reasonably quickly. That is, the company will take corrective steps for any results falling outside previously set parameters. KPI is also a dynamic, continuous process. Benchmarks can be changed over time, gradually raising the performance bar.
KPI: The BlackHawk Approach
BlackHawk compiles a monthly KPI scorecard for its integrated accounts, most of which use Blackhawk’s inventory vending solutions in some form. According to Rod Burdge, BlackHawk General Manager, West Region, “We hold ourselves accountable to deliver quality service. To do that we measure ourselves on six quadrants, or performance dimensions.” These are:
- Spend (by Category)
- Spot Buy On-Time Delivery (vs. Target)
- On-Time Quote (vs. Target)
- Stock Availability (For Vended)
- Inventory Turns
- Cost Savings (Projected and Realized)
Blackhawk uses KPI data both internally and externally. Burdge says, “We roll up the numbers for a national perspective. That allows us to determine where we excel, where we can improve, and set new benchmarks.” Cliff Kemp, GM of BlackHawk at Rock Hill, SC added, “KPI gives us a big-picture view of how we’re doing our jobs. We use the data proactively—to spot and head off potential problems. By staying ahead we prevent small glitches from becoming big headaches. And we can identify a success in one place and implement it on a wider scale.”
The true worth of KPI is proving the value BlackHawk brings to its customers. “Every month the KPI report opens a conversation with the customer,” says Burdge. “We normally do face-to-face meetings to review the results. When we hit our targets—when we deliver on-time, accurately and timely—we’re avoiding wasted time, which keeps them running efficiently and saves them money.”
Kemp added, “Customers often don’t have the time to run these numbers themselves. So we do it for them. The meetings open a discussion to ensure we are on the same page.” Burdge noted, “Sometimes perceptions don’t match reality. A one-time problem can leave a lingering impression. With the data we can prove how we’re meeting our objectives. If we need a deeper dive, we can go back over six months of history.”
KPI gives customers an objective look at an often-overlooked spending category. Burdge explained, “We’re providing non-production parts, which add to significant dollars but aren’t typically a customer’s top priority. We show how we are driving cost savings in this category.”
How have customers reacted to KPI scorecards? “A huge positive,” says Burdge. “The information we exchange, the regular conversations, the chance to talk about their changing challenges and how we can help solve them—it’s a win-win.
“Saving customers money and delivering solutions that help them on the shop floor are two things that customers appreciate. KPI allows us to do both.”