OPS 410 Week 1 Logistics and Customer Service Example

Shingles on the Roof by Seven: Logistics and Customer Service at a Gulf Coast Roofing Supply Distributor

[Student Name]

University of Phoenix

OPS/410: Logistics Management

Week 1 Assignment

[Instructor Name]

[Date]

Gulf Coast Roofing Supply, its branches, customers and figures are composites written for a model paper.

Gulf Coast Roofing Supply is a composite distributor of residential and commercial roofing materials, shingles, underlayment, metal panels, flashing, fasteners and roof vents, with nine branches between Corpus Christi, Texas, and Lake Charles, Louisiana. It sells about $210 million a year to about 2,600 roofing contractors. Contractors start work at dawn, and a residential crew of six standing idle waiting for materials costs the contractor about $300 an hour. What contractors buy from Gulf Coast is not only shingles but the promise that materials will be on the roof, spread along the ridge, before the crew arrives. This paper examines the company's logistics system and the customer service it provides.

The Logistics System

Logistics at Gulf Coast covers six connected activities. Order processing takes orders by phone, text and an online portal until a 2 p.m. cutoff for next-morning delivery. Inventory at each branch holds about 3,500 items, with shingles in a dozen colors from three manufacturers. Warehousing includes receiving truckloads from manufacturers, picking orders and staging them on pallets by delivery route overnight. Transportation uses a fleet of 74 trucks, including 31 boom trucks and 18 conveyor trucks that lift bundles directly onto a roof. Returns handle unused bundles and damaged goods. Information ties these together through a distribution system that prints pick lists and delivery manifests.

These activities are interdependent. Moving the cutoff from 2 p.m. to 4 p.m. would please contractors but compress overnight staging and early routing, risking late morning deliveries. Lambert and Cooper (2000) argued that supply chain management requires integrating processes across functions and firms rather than optimizing each separately; Gulf Coast's activities illustrate why.

Customer Service Elements

Service has three phases. Pre-transaction elements set expectations: the published 2 p.m. cutoff, a delivery window of before 7 a.m. for rooftop loads and before 10 a.m. for ground drops and a written policy on returns. Transaction elements are what happens on the order: order accuracy, availability of the requested colors, on-time arrival and correct rooftop placement, spreading bundles along the roof so crews do not carry them. Post-transaction elements follow delivery: pickup of unused bundles, credit for returns within a week and handling of damage claims, such as a bundle torn by a conveyor.

Measuring Service

Gulf Coast had measured only on-time departure from the branch, which said nothing about the customer's experience. The team defined a perfect order as one delivered within the promised window, complete, undamaged, placed as requested and correctly invoiced. Over two months, 18,400 orders were reviewed. On-time: 93 percent. Complete: 95 percent. Undamaged and correctly placed: 97 percent. Correct invoice: 96 percent. Because a perfect order must meet all four, about 81 percent of orders were perfect. Most failures came from incomplete orders, usually a shingle color out of stock at the branch, and late rooftop loads on Monday mornings, when weekend storm orders pile up.

Ninety-three percent on time sounds good until it is multiplied by three other ninety-somethings.

What Contractors Said

The service manager called 30 contractors across the three segments to ask what mattered most. Large contractors almost all named the 7 a.m. rooftop load first and color availability second; several said they would pay a delivery fee for a guaranteed early window. Mid-size contractors cared most about getting the whole order in one trip, since a second trip for a missing color stalls the job for half a day. Small contractors mentioned the counter: they wanted short waits and staff who could suggest a substitute color. These answers shaped the segment standards below more than any internal assumption did.

Storm Season

Service is hardest after storms. When hail or a hurricane passes through, orders at affected branches can triple for three or four weeks, and insurance-funded reroofing jobs all want materials at once. Gulf Coast moves trucks and drivers between branches during these surges and asks manufacturers for priority truckloads, but perfect order rates still fall. The service standards apply in normal weeks, with a published storm policy that tells contractors how windows will change during declared surges.

The Cost of Service

Service costs money. Rooftop loading requires boom or conveyor trucks costing about twice as much to operate as flatbeds, and drivers trained to work at roof height. Holding every color at every branch would raise inventory by about $4 million. Stank et al. (2003) studied logistics service performance and found that operational and relational aspects of logistics service influenced customer satisfaction, which in turn was associated with market share. Mentzer et al. (2001) found that the dimensions of logistics service that matter, such as timeliness, order accuracy and condition, differ among customer segments. Gulf Coast's challenge is to spend on the elements its most valuable customers value most.

Segmenting Customers

Customer data show three segments. Large contractors, about 180 accounts and 55 percent of sales, run multiple crews daily, need rooftop loading before 7 a.m. and value reliability above all. Mid-size contractors, about 700 accounts and 35 percent of sales, need rooftop loading most days and accept a 9 a.m. window. Small contractors and handymen, about 1,700 accounts and 10 percent of sales, often pick up at the counter or accept ground drops.

Recommended Service Standards

Large contractors: perfect order target 95 percent; delivery before 7 a.m.; a dedicated account representative; a branch stocking agreement for their top colors.

Mid-size contractors: perfect order target 90 percent; delivery before 9 a.m.; standard color availability, with special colors in 48 hours.

Small contractors: counter pickup or ground drop before noon; perfect order target 88 percent.

Two operational changes support these standards: a Saturday stock check after storms so Monday rooftop loads are staged, and color availability tracking by branch, which leads into the inventory work of Week 4.

Conclusion

Gulf Coast's logistics system links order processing, inventory, warehousing, specialized trucks and returns, and its contractors judge it by perfect orders, not departures. Measuring perfect orders revealed 81 percent performance, held back by stockouts of colors and Monday overloads. Because service has costs, the company should set standards by segment, investing most where large contractors value reliability most, and use the coming weeks' transportation, warehousing and inventory analyses to meet them.

References

Lambert, D. M., & Cooper, M. C. (2000). Issues in supply chain management. Industrial Marketing Management, 29(1), 65-83. https://doi.org/10.1016/S0019-8501(99)00113-3

Mentzer, J. T., Flint, D. J., & Hult, G. T. M. (2001). Logistics service quality as a segment-customized process. Journal of Marketing, 65(4), 82-104. https://doi.org/10.1509/jmkg.65.4.82.18390

Stank, T. P., Goldsby, T. J., Vickery, S. K., & Savitskie, K. (2003). Logistics service performance: Estimating its influence on market share. Journal of Business Logistics, 24(1), 27-55. https://doi.org/10.1002/j.2158-1592.2003.tb00031.x