Credit management for better supply performance
Wednesday, 12 December 2007
Abdul Majid Khan (Titu)
CASH flow is the lifeblood of every business. Poor credit control will affect a company's cash flow and its ability to pay the debts on time. Bad debt by, increasing the amount of interest that a company pays would shrink its profits, and ultimately close the door on its business.
Segmented business is service oriented or product oriented. This write-up concerns service oriented business especially, telecommunication business in the country. The first two lines in it refers mainly to banking sector with impact on credit management of telecommunication companies.
Efficient credit control management needs credit monitoring to ensure maximum customer satisfaction. Constant monitoring would ensure that the services are in place. Delivering the service requires documents in time, collection of bills, letting the customers know in time that their payments are regularly updated to system and keeping communication to know whether they are facing any problem related to service. Customer service should include a smooth 24-hour help line facility, various incentives such as occasional gifts and packages of fundamental information on hospitals, health consultancy over phone, shopping information, internet facility, news, entertainments and more. In short, customer loyalty has to be achieved through effective credit management activities which ultimately ensure quality and flexibility that can ensure supply chain performance. From the customers' end cost is not the main factor when they want the best service with a network that enables them always to get connected locally and internationally. For them getting better service is important. And it is on dependability and the quality of service that customers can consider, 'yes', this company is a good partner in their life. It is important for managements to set goals in different separate measurement areas. After constructing the measures, the company must then set goals for those it can manage. By doing so, the supply chain can be considerably improved in most organisations.
Generally four measures of supply chain management performance compare closely to the cost, quality, flexibility, and delivery measures for operations. What matters is the percentage of orders delivered complete and on the date requested by the customer. An order is not counted as delivered on time when it is done only partially or if the customer does not get the delivery on the requested date. This is a stringent definition. But it measures performance in getting the entire order delivered to the customer when he or she wanted it. A direct measure of quality is customer satisfaction. It can be measured in several ways. First, it can be measured relative to what the customer expected. For example, a company asks its customers, 'How well did we do in meeting your expectations?' Responses are given on a five-point scale: greatly exceeded expectations, exceeded expectations, met expectations, didn't meet expectations, greatly disappointed. A company wants a high percentage of responses of the last two, indicating that it is exceeding customer expectations. This is, of course, a tough standard.
A measure closely related to quality is customer loyalty. This can be measured by the percentage of customers who are still buying the product after having bought it at least once. Customer loyalty is something that companies are interested in achieving since it is much more expensive to find a new customer than to keep an existing one. Companies should compare both loyalty and customer satisfaction to that of their competitors. They should also monitor improvement made over time.
(The writer is an Executive, Credit Control Department, TM International (BD) Ltd., (AKTEL), Chittagong)
CASH flow is the lifeblood of every business. Poor credit control will affect a company's cash flow and its ability to pay the debts on time. Bad debt by, increasing the amount of interest that a company pays would shrink its profits, and ultimately close the door on its business.
Segmented business is service oriented or product oriented. This write-up concerns service oriented business especially, telecommunication business in the country. The first two lines in it refers mainly to banking sector with impact on credit management of telecommunication companies.
Efficient credit control management needs credit monitoring to ensure maximum customer satisfaction. Constant monitoring would ensure that the services are in place. Delivering the service requires documents in time, collection of bills, letting the customers know in time that their payments are regularly updated to system and keeping communication to know whether they are facing any problem related to service. Customer service should include a smooth 24-hour help line facility, various incentives such as occasional gifts and packages of fundamental information on hospitals, health consultancy over phone, shopping information, internet facility, news, entertainments and more. In short, customer loyalty has to be achieved through effective credit management activities which ultimately ensure quality and flexibility that can ensure supply chain performance. From the customers' end cost is not the main factor when they want the best service with a network that enables them always to get connected locally and internationally. For them getting better service is important. And it is on dependability and the quality of service that customers can consider, 'yes', this company is a good partner in their life. It is important for managements to set goals in different separate measurement areas. After constructing the measures, the company must then set goals for those it can manage. By doing so, the supply chain can be considerably improved in most organisations.
Generally four measures of supply chain management performance compare closely to the cost, quality, flexibility, and delivery measures for operations. What matters is the percentage of orders delivered complete and on the date requested by the customer. An order is not counted as delivered on time when it is done only partially or if the customer does not get the delivery on the requested date. This is a stringent definition. But it measures performance in getting the entire order delivered to the customer when he or she wanted it. A direct measure of quality is customer satisfaction. It can be measured in several ways. First, it can be measured relative to what the customer expected. For example, a company asks its customers, 'How well did we do in meeting your expectations?' Responses are given on a five-point scale: greatly exceeded expectations, exceeded expectations, met expectations, didn't meet expectations, greatly disappointed. A company wants a high percentage of responses of the last two, indicating that it is exceeding customer expectations. This is, of course, a tough standard.
A measure closely related to quality is customer loyalty. This can be measured by the percentage of customers who are still buying the product after having bought it at least once. Customer loyalty is something that companies are interested in achieving since it is much more expensive to find a new customer than to keep an existing one. Companies should compare both loyalty and customer satisfaction to that of their competitors. They should also monitor improvement made over time.
(The writer is an Executive, Credit Control Department, TM International (BD) Ltd., (AKTEL), Chittagong)