We have long understood Supply Chain Partnerships and Simultaneous Engineering.
This thinking extends this to the "Sharp-end" of the Value Chain.
In the Value Chain the Supplier can only be as good as the Customer allows; indeed many Suppliers had to teach their Customers how to develop technically, commercially or in relationship-building.
Asking Customers is a powerful way of "steering" such relationships; but as always the quality of the questions determines the usefulness of the answers.
Acceptance by the Customer of their role in "Value-adding" can only be assisted by education and feedback.
However, getting people to accept that they are the author of their own misfortunes, will bring the need for a new level of diplomacy to the Customer Service/Complaints Department.
Your story brought to mind an exercise I was asked to do in the French Headquarters of the European Division of an American Automotive Products Company.
We had been "given" a new Marketing VP from Matel (the Barbie Doll Maker).
His experience had been very high margin products, where Sales Growth was inevitably followed by Profit Growth.
After 2 years of this strategy, in a tight margin competitive market, significant Sales Growth was causing accelerating Losses.
Again unit Value per Order was a Key Issue.
Multiple Discounts were applied on even the smallest order in the hope of building an Agency Network.
Analysis of Discount versus Actual Sales Value per annum, showed that discounts were being given rather than earned.
In a similar way to your case study, agents were relying on quick deliveries and holding minimal stocks. The Paris warehouse was overloaded with slow moving stock; fast-sellers by-passed the warehouse and went direct.
You cannot blame the Dealers/Agents, after all they had been lured away from alternative suppliers with these wonderful discounts.
So, as always, any fool can sell. Making Profit requires applied intelligence.
Think of Cable TV/Broadband, Double Glazing, Energy Contracts; the list is endless.
Having spent some time elevating the Status of Quality and Maintenance, which were seen either as the cause of the problems or a problem to be cost-cut to death, I have watched with disbelief as Outsourcing and inadequately tested Technologies have been introduced to Customer Service.
In many cases these ill thought out Cost Savings have had to be reversed, at significant expense but, worse still, after numerous Customers have left in disgust.
Businesses and Organisations which invest in Customer Service, tend to reap the rewards of their efforts; you will have your own favourite examples.
As a Lean practitioner, the Customers Needs are paramount and prioritise large Change Processes. The rewards are spectacular but the over-riding goal remains Customer Satisfaction.
My answers
Excellent article.
We have long understood Supply Chain Partnerships and Simultaneous Engineering.
This thinking extends this to the "Sharp-end" of the Value Chain.
In the Value Chain the Supplier can only be as good as the Customer allows; indeed many Suppliers had to teach their Customers how to develop technically, commercially or in relationship-building.
Asking Customers is a powerful way of "steering" such relationships; but as always the quality of the questions determines the usefulness of the answers.
Acceptance by the Customer of their role in "Value-adding" can only be assisted by education and feedback.
However, getting people to accept that they are the author of their own misfortunes, will bring the need for a new level of diplomacy to the Customer Service/Complaints Department.
Such blinkered thinking is why so many IT investments are junked after a few years.
Profit is the responsibility of all parts of the Business and all Systems.
Heaven preserve us from IT people who believe that systems have an independent life regardless of the business.
Your story brought to mind an exercise I was asked to do in the French Headquarters of the European Division of an American Automotive Products Company.
We had been "given" a new Marketing VP from Matel (the Barbie Doll Maker).
His experience had been very high margin products, where Sales Growth was inevitably followed by Profit Growth.
After 2 years of this strategy, in a tight margin competitive market, significant Sales Growth was causing accelerating Losses.
Again unit Value per Order was a Key Issue.
Multiple Discounts were applied on even the smallest order in the hope of building an Agency Network.
Analysis of Discount versus Actual Sales Value per annum, showed that discounts were being given rather than earned.
In a similar way to your case study, agents were relying on quick deliveries and holding minimal stocks. The Paris warehouse was overloaded with slow moving stock; fast-sellers by-passed the warehouse and went direct.
You cannot blame the Dealers/Agents, after all they had been lured away from alternative suppliers with these wonderful discounts.
So, as always, any fool can sell. Making Profit requires applied intelligence.
Think of Cable TV/Broadband, Double Glazing, Energy Contracts; the list is endless.
So we are just discovering what we all knew already.
We are individuals and like to be acknowledged as such.
This is not about "Communicate to" but rather about Listen to.
Ask me what I think and I already want to believe that you might listen.
Tell me that you are customer-centric and I know you are not interested in me as an individual consumer.
Listen to me then respond; I might just go with you and buy something.
As a proud member of Generation X, I and most of my friends are quite at home with SMS, Blogs, etc.
What we want is not to be patronised and to get straight answers to straight questions.
I have always felt that Customer Management was direspectful since it tends to classify us as dumb sheep who just need to be told what to do.
It is also amusing to see the rediscovery of People Development and Team Leadership Skills amongst the Call Centre Elite.
How do you think we managed to run businesses for hundreds of years before Call Centres.
A little more respect and a lot more Listening is what we ask for.
Having spent some time elevating the Status of Quality and Maintenance, which were seen either as the cause of the problems or a problem to be cost-cut to death, I have watched with disbelief as Outsourcing and inadequately tested Technologies have been introduced to Customer Service.
In many cases these ill thought out Cost Savings have had to be reversed, at significant expense but, worse still, after numerous Customers have left in disgust.
Businesses and Organisations which invest in Customer Service, tend to reap the rewards of their efforts; you will have your own favourite examples.
As a Lean practitioner, the Customers Needs are paramount and prioritise large Change Processes. The rewards are spectacular but the over-riding goal remains Customer Satisfaction.