Chasing the right Q or "Cue" on your CFRs
Often times, organizations hold CFR or the Customer Fulfilment Rate as one of the key meterics Customer Service Organization are measured against. Certain best-in-class supply chains boast of CFRs in their high nineties. However one question that all organizations should answer is - what is the quality of the CFRs ?
Let me explain with a little example on why just having high CFRs may not be right enough. The first thing that any customer organization does is to divide the diverse customer segments into multiple tiers across different product categories. Example- the customers that bring in the highest sales volume on a specific category may be given relatively a higher priority than say small time customers. In the same vein, a second dimension of the Order universe would be the Type of Order - Promotional, Emergency or an Interplant Order may be more important for a customer service organization than say, a regular sales order.
One important analysis that any organization should do would be to analyze where their CFRs "missed". Were they missed say for Priority Customer for a Priority type of Order ? Or, were they missed for a low priority regular sales order ? It thus helps any organization get their priorities straightened out from a strategic long term perspective. In cases of supply constraint, it becomes important to meet those customer orders that means more to the customer service organization in longer term.
Now having higher CFRs comes at a cost. It is the cost of stocking up inventory that can help an organization become responsive. It helps organization to do analysis on where inventories were stocked in the supply chain while getting a certain CFR. One possible analysis would be to understand how the CFRs fared with what stock position in which node of the network. Based on lead time variations in the network, there could be situations where stock positions at Distribution Center or Producing plants could be correlated with the CFRs in the network.
At the end, achieving a specific CFR should be accompanied by the right quality of fulfilled customer orders and stock positions that are mobilized at the right places in your network.
