# Service level

The service level (or service level ) is an economic key figure for the service level achieved towards customers , especially for the delivery service . It measures the performance of sales .

## General

Linguistically, it is a sham Anglicism , because the American specialist literature understands the service level to be readiness to deliver . However, there is a strong distinction between the two in German-speaking countries.

The service level is primarily used in purchasing for standardization and thus comparability, essentially when purchasing services. Particular attention is paid to so -called shared services . Service levels can be agreed for all possible services such as IT services , building cleaning , maintenance services , financial management , bookkeeping or payroll accounting . Although the term service level originally comes from information technology , it is also used today in production companies.

## content

The service level is part of the operational function of sales and is expressed by the content and scope of the products or services to be created by a manufacturer or service provider, including the product and service quality. While production is evaluated by its production costs and logistics by means of storage and transport costs , the benchmark for sales is the service level based on the availability of goods.

The service level results from the demand forecast of the sales planning and the inventory management of the logistics. The more accurate the forecasts and the more efficiently the inventory management works, the cheaper the service level and vice versa.

## Key figures

The α service level ( ) is a business key figure that indicates the probability that customer requirements can be completely covered from stock in a certain period of time : ${\ displaystyle {\ text {α}}}$

${\ displaystyle {\ text {α}} = {\ text {P (d ≤ I)}}}$,

where is the probability that it will occur; is the quantity requested, the available inventory. Thus the α service level indicates the probability that no shortfall event ( English backlog ) occurs. ${\ displaystyle P}$${\ displaystyle {\ text {(d ≤ I)}}}$${\ displaystyle d}$${\ displaystyle I}$

The β service level ( English fill rate ) indicates the proportion of the total demand that can be satisfied from the warehouse in a certain period of time:

${\ displaystyle {\ text {β-service level}} = {\ frac {\ text {fulfilled demand}} {\ text {total demand}}}}$.

Mathematically, the service level therefore describes the amount of customer orders and orders that can be fulfilled immediately from the warehouse.

## Example call center

In the case of call centers , the service level is the decisive parameter for measuring their availability. It expresses the percentage of calls received by all call center agents within a certain period of time. A service level of 90/10 means that an average of 90% of all callers have to wait less than 10 seconds before being connected to an employee. A value of 80/20 (see: ABC analysis ) is given as the standard service level in the specialist literature , at which the majority of all customers are satisfied. This standard service level is only a guideline - it can vary depending on the main tasks of the call center and customer expectations.

The following example shows the direct effect of a variation in the service level on staff requirements (the results are calculated using the Erlang C formula):

In a call center with an average call processing time of 190 seconds (call duration of 180 seconds plus 10 seconds of post-processing time) and a total call volume of 350 calls in half an hour, a service level of 80/20 should be ensured. 42 agents are required for this, whose utilization is 88%. If you want to achieve a service level of 90/15 under the same conditions, 45 agents are required with a utilization of 82%.

In order to determine the optimal service level, a call center must identify the point at which, within a given framework, personnel costs are as low as possible, but customer satisfaction is as high as possible.

## Service level management

The Service Level Management is used for control , monitoring and optimization of production and warehousing processes . It aims to specify business relationships with customers, making them measurable and controllable in order to improve customer satisfaction .

The service level is the core of the service level agreement , which is to be defined in service level management. This is a contract between the client and the service provider that makes it easier for the client to control recurring services by defining the quality standards to be met .

## Individual evidence

1. Gerd Rainer Wagner, The delivery time policy of companies , 1975, p. 29 fn. 6
2. Dieter Arnold / Heinz Isermann / Axel Kuhn / Horst Tempelmeier / Kai Furmans (eds.), Handbuch Logistik , 2008, p. 23
3. Dieter Arnold / Heinz Isermann / Axel Kuhn / Horst Tempelmeier / Kai Furmans (eds.), Handbuch Logistik , 2008, p. 23
4. Hans-Jürgen Sebastian, Optimization of Distribution Networks , 2013, p. 34
5. Hans-Jürgen Sebastian, Optimization of Distribution Networks , 2013, p. 34
6. Berthold Kaib (Ed.), Outsourcing in Banken , 2003, p. 185