The SLA
The most important aspect of doing business is to deliver on your promises. Commercial agreements need to be realized by operational deliveries. To avoid misunderstandings in expectations, the agreements can be confirmed in a Service Level Agreement.
When I centralized the European Supply Chain for ASICS and took over the logistics operations from the regional subsidiaries, we became an internal supplier of logistics services. We created service level agreement documents with out subsidiaries to establish and confirm crystal clarity in mutual expectations in areas like lead times, order processing, documents, value added services, packaging, transportation, pricing and charges.
With Crocs having a central European Supply Chain set-up and decentralized sales in the EMEA region, we set up service level agreements per sales channel.
- Wholesale – to resellers, either distributors or 3rd party retail stores
- Retail – to Crocs owned Retail stores
- Ecommerce – directly to consumers
Lead times differ per channel per receiving country, there are ordering cut off times for today’s shipping, communication agreements on value added services, but also delivery times at retail locations, limited delivery volumes to retail, packaging and marketing material for e-commerce deliveries, the list can be endless.
With a company like Navico, the service levels are set per brand and product category. Imagine a super yacht with a failing GPS system from Simrad versus a failing outdoor GPS device from Lowrance for geo-caching. The last one can be returned and repaired, or exchanged, but you better send your service technician team to the super yacht.
http://www.simrad-yachting.com/en-GB/Support/Advantage-Service/
http://www.lowrance.com/en-GB/Support/Warranty-Service/
The absolute bonus of setting up service level agreements is that the communication required to create the documents results in detailed understanding of the parties involved.