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Author: Leslie Budd

Keep on trucking customer service

Updated Thursday, 28th October 2010

 Does a 1972 album hold clues for ensuring your customers keep happy? Leslie Budd suggests it might.

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When Commander Cody and His Lost Planet Airmen released their 1972 album, Hot Licks, Cold Steel & Truckers' Favorites, it seemed like a paen to truck driver.

Listening to Truck Stop Rock, Truck Drivin' Man, and Semi-Truck to wile away those long hours at the wheel, these freight chauffeurs of the US highways seemed like the real ordinary heroes of the American Dream.

Around the world today we see the visible expression of the business through logistics brands like Norbert Drentreassangle, Eddie Stobart, TNT, UPS and so on.

Well, logistics has come along way since these romantic visions about just one part of this international sector. It still performs the same function: moving goods from A to B, whether by plane, train, truck or ship. It is as simple as that - but underneath this immediately visible business is a complex global network that ties together consumption and production in the economy, over time and space.

In 2007, logistics accounted for about 10% of US Gross National Product, but has clearly fallen since the crisis that began the same year. It can be argued that logistics is the bellwether of the global economy, and one of its leading indicators.

At the local level, we find that Milton Keynes is the Logistics Capital of Europe, with its hundreds of warehouses that populate its road grid system.

At first sight, logistics appears to be a medium-tech sector. But go inside a large warehouse, like that of Amazon - near one of the Motorway exits close to Milton Keynes - and you will see a sophisticated operation.

This operation is underpinned by high-tech electronic data processing (EDP) software, "Just-in-Time" control systems and an optimal spatial layout to match the orders to the dispatch of products.

The next stage is to ship by truck from the warehouse using a number of loading bays designed on the basis of these flows, and with a built in margin for any potential traffic problems. For Amazon, this is one of the stages in their supply chain.

A supply chain is the concept and practice at the heart of an organisational system that controls the flow of goods, services and information between producers and consumers.

For example iron ore is mined and then sold to steel makers who use it in part to make beams, sheets and bars which are sold to construction companies; they build offices and warehouses, which are sold or leased to various companies by developers.

A simple supply chain looks like this:

The supply chain

Although they supply chains can seem linear there is a circularity corresponding to the circular flow of income in an economy, in which the flows of activities and income between firms and households is boosted by investment, government expenditure and exports.

Whilst on the other hand, they are reduced by savings, taxation and imports.

Similarly, supply chains connect parts of the same and different sectors of the economy.

There are two types that can be distinguished: lean and agile supply chains.

Lean supply chains are those in the same sector, for example the exploration of oil, to refining of that oil into petrol.

An agile supply is one in which goods and services from different sectors flow along, so in the Amazon example, its logistics operations includes consumer electronics, books, CDs and DVDs and so on.

What connects the two types is the concept of a value chain where, at each successive stage, of the supply chain more value-added is created. Some of this comes from the global commodity chain literature and practice, a producer-driven of which example is given below.

The commodity chain

So without logistics you would not be able to eat your cornflakes, whilst checking your computer and drinking your coffee.

But there is a downside, which concerns trucking off customer services because a fixation on the systems and processes of logistics rather than the outputs.

Despite the heroic claims of many companies that valuing customers is their primary mission, you could be mistaken for thinking that it is the Cinderella of their business: the glass slipper that keeps breaking under pressure.

The customer relationship management systems of many firms can seem like the Ugly Sisters: keen to be at the ball but unlikely to dance.

If you buy something online you can check its delivery status, but wonder whether the weighty goods you have ordered will ever reappear from the weightless ether they seem to vanish into.

You then have to negotiate a customer services experience that spins you around like a Ferris-wheel, and which appears to join the litany of the great oxymorons of the world.

The problem is that dealing people is a difficult, complex and a heterogeneous experience.

It does not lend itself to the more linear management processes of logistics.

Form follows function is the oldest design epithet in the world, yet when it comes to customer service too many businesses focus on the form and not the function.

Customer service means just that - service your customers, in response to their buying your goods and services that keeps you in business and is the one of the key drivers of effective demand in the economy. Forget that and you go out of business.

Perhaps many CEOs of companies should dust off their off vinyl records, put on Commander Cody and adapt the words so as to sing Customer Driving Man (and Woman). Because the bottom line is that if you keep trucking customer services, your customers will truck off to somebody else.


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