Enhancing Customer Satisfaction: A Study of Service Level and Service Quality in the Manufacturing Industry

Abstract

As competition between companies is rising, there is a need for providing better services to stay competitive since companies no longer can compete with product quality alone. As a result, the relationship with the customer and the service provided has become essential for navigating this environment. A demand for measurements that give information regarding the company’s operational performance and service quality therefore becomes crucial in order to achieve higher customer satisfaction and loyalty. Therefore, this study aims to explore how service level and service quality affect customer satisfaction in a manufacturing company. This is performed through a case study of a manufacturing company. The findings from the case company were derived using qualitative research, with interviews as the primary method. The findings were then examined together with the theoretical framework. The study concludes that manufacturing companies need to consider the measure of service level separately for critical and non-critical products, it is also needed to revise and customize the SLA to ensure inclusion of relevant functions and to enhance the internal understanding of service level in order to achieve internal alignment. Lastly manufacturing companies need to establish a flexible method for lead times which also considers responsiveness to improve the service level. These improvements in the service level will further affect customer satisfaction positively. The study also showed that there are factors affecting service quality such as the lack of internal processes which results in employees not being able to provide the right service quality. It also shows that a lack of internal visibility decreases service quality. In addition, a sufficient tool to measure service quality is needed, hence SEVQUAL is suggested to provide feedback from both customers and employees. Lastly the study demonstrates the importance of communication with the customer regarding lead times, as it improves relationships, and further increases the service level. Additionally, clear communication regarding order status has been shown to enhance customer satisfaction regardless of the status itself, and enhanced communication with the customer increases the service quality, since the employees then provide the right service.