Right first Time: Put the Customer First

I wrote an article a couple of weeks ago ‘RFT’ What does it Stand For? In which I outlined the definition that RFT Express use, Right First Time. I then went on to show how we modified the definition.
With this article I want to go a step further, and explain how we integrate the definition Right First Time into our strategy. RFT Express always start at the same point – The Customer; How can we benefit that customer; How can we turn that customer into a client?
This may seem obvious, but a lot of the strategy used by most large multi-nationals put the customer last, particularly in the Fashion Industry. It’s a case of: here is our standard price; our terms are on the website, ‘Take it or Leave it’.
They meticulously work out a standard price per set of garments, add on variations for different parts of the country, or different countries, add on a percentage [so when the customer has a better quote, or finds a better service, they can reduce the rate in several stages and still make a profit] They will make the customer feel wanted and valued by appointing a Logistics Co-ordination Manager [or some other important sounding name for a salesman] to a company.
For a lot of companies this works fine, until they decide to change carriers, the Logistics Co-ordination Manager is straight in there reducing the price, in order to keep the customer. The trouble is when the customer finds out how much they have been overcharged over a period of time, it does nothing to boost trust and confidence.

At RFT Express we operate by putting the customer first.

Let me give you an actual example:
We were asked to quote for the delivery of 40,000 garments [Gents Slacks] a month, going from a manufacturer direct to one central warehouse. The manufacturer was using a carrier who was supposed to pick up 20,000 garments every 2 weeks, and charged the manufacturer 25p per garment. The original quotation was handle by some one new to the company, who worked out that we could have simply undercut the price, and contracted the delivery out to another carrier, he worked out a price which we could operate the contract at, and arranged for one of our associated companies to take it on as a sub contract. The price came in at 21p per garment. Although he was reasonably confident we would get the contract, there was always the possibility that the original carrier would come back at a lower price, even to the extent that the current carrier might operate the contract at cost, or at a loss, in order to keep the vehicle working full time.
The quote landed on my desk for approval, and that was where it stayed before it was binned.
Have you heard the phrase “Just in Time”? It’s really what logistics is all about. The end user, the retailer receives the stock on a regular basis, just when they want it, they don’t have to stockpile a lot of stock on their premises.
It would appear from the facts we were given, that this contract could possibly be managed on a ‘Just in Time’ basis, making the whole contract more efficient and cost effective to all concerned.
The first thing to do was to contact the manufacturer. I gave him the good news that we could deliver his garments for 21p, a saving of 16% on his current costs, and with a little more information, it may be possible to reduce this even further. During the conversation I learnt that this contract was his only big contract supplying two major high street chain stores, but he did have several smaller contracts, which he would like to develop. He also mentioned that his current carrier didn’t collect on a regular basis, sometimes it would stretch to 3 weeks, which put a strain on his storage facilities, as well as his cash flow, because he could only invoice his client when the stock was delivered. I asked him if weekly collections would help, his reply was definitely, but he had asked his current carrier for weekly collection, and was told it would cost more per garment. The manufacturer also told me that he received orders on a daily basis for this contract. With his response to weekly collection being positive, I suggested there may be a chance that we could do twice weekly collections because we had vehicles on regular runs available to collect from his works on a Wednesday and Friday at 4-30 p.m. for delivery Thursday and Monday from 6-00 a.m. I asked him if he thought this would be beneficial to his client, he agreed to put this to his client if he had a definite written quote at a price similar to what we had already given him. There was the probability that he had sent the same request for a quotation to other carriers, who I suspect would have sent out their standard prices. I told him I would have a quotation in his inbox the following morning, based on the extra information he had given me.

What had become evident from our conversation was that although the manufacturer had asked for a quote in order to reduce the cost of his deliveries, he had informed us he would prefer weekly deliveries, or if possible twice weekly deliveries. I had already told him we could reduce his costs for delivery of 2 loads a month by 16%, he had asked his current carrier for weekly deliveries, which it could be assumed that this was at the request of his client, or to free up storage space for a more profitable use. The manufacturer’s warehouse was known to us, every load we had delivered into this warehouse was shipped out again the same day. From what we knew it would seem logical that the warehouse would welcome more regular deliveries.[Hanging Garments stored in warehouses, is only profitable to those who charge for storing them.]
This was an important contract for RFT, we had available vehicles in the area of pick-up on the 2 days I suggested, and the following days the vehicles were going within 10 miles of the drop off. Utilising dead mileage is always profitable.
We had to come in at a price which no one else could touch, and a service nobody else had suggested, in other words block out the competition, before it becomes a competitor.

Related Articles: RFT The Definition: The Quote

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Vic Farron RFT Express.
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The Strategy of Right First Time

At RFT Express we operate by putting the customer first.

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