Jul 22, 2009 | Demand chains, Management, Sales
Customer focused has become a cliché, it appears in a wide range of material, usually it seems, written by people who have never interacted with a customer in their lives.
So how do you measure customer focused? Here are some basic things you need to know before the expression will be more than a cliché:
- We know the characteristics of a loyal customer, not just the social economic, but the behavioral drivers they experience
- We understand the relative value of our value proposition to different types of customers.
- We measure customer profitability over more than just one, or one periods transactions.
- We know why we lose customers, and actively manage the loss of unprofitable customers.
- We know how much it costs to attract, and retain profitable customers.
- We know where we sit on a customers “value curve” the trade-off customers make between the relative cost and utility of our products, Vs the opposition.
- We set out to measure the “advocacy” of our customers for our products.
- We collect data from non customers who use opposition products, and we understand them, and the attraction of the oppositions offer Vs ours.
- Everyone in the firm recognises that it is not just sales people who have the responsability to serve customers, but everyone in the firm has a role in providing that service, from the CEO to the cleaner, and they all rely on continued customer support for their employment.
When you are well advanced in all of the above, you will be reasonably able to call yourselves “customer focussed”
Jul 21, 2009 | Demand chains, Management, Marketing, Operations, Sales
How long will it take for the politicians in this country to forge an acceptable compromise amongst all the interests in the carbon debate, and take meaningful action.? Probably forever, and we will end up with the proverbial camel after all the compromise, and that will suit nobody.
Enter the game-changer!
Wal-Mart, the biggest retailer in the world by far, turning over more than $US450 billion, more than most countries, has changed the game. Last week, they announced they would put carbon footprint information on display labels for all products sold in their stores. Suppliers will be required to assemble the information from their supply chains as part of their trading relationship with Wal-Mart
No recommendations, just the information, and consumers can make up their own minds.
The implications are mind-boggling.
In one decision, by one company, the nature of the debate about climate change has been turned from one seeking a political, emotional and academic compromise to a very simple choice for the Wal-Mart supply chains, do it or face deletion from their largest customer. Multi-national suppliers, Colgate, P&G, Unilever, Mars, and many others, will suddenly have another marketing lever to use in their marketing activities, across the world. Suddenly, weasel words in media grabs from pollies are even less meaningful than they usually are.
In Australia, Woolworths follow closely the steps taken by Wal-Mart, and what better way to put added pressure on its arch-rival Coles.
Suppliers to Woolies had better get ready!
Jul 6, 2009 | Demand chains, Management, Strategy
Newton is one of the real genius’s of history, he promulgated a series of laws that form a key part of the foundation of following scientific success.
However, he did not get it all right.
“To every action, there is an equal and opposite reaction” he said. Any experienced negotiator will tell you this is nonsense in the context of a negotiation, where the reactions to a proposition are rarely opposite or equal to the proposition suggested.
A negotiation is a complex series of interactions that depend on the creation of perceived value, and the reflection of that value in some way, often in monetary terms, but not always.
My sister (in Trinidad) has just swapped a beautiful, highly equipped, 32 foot sloop with some finishing work to do, for a 45 foot steel hulled sloop with little gear, apart from a full suit of sails, but which can cross the Atlantic at will. No money changed hands, but value was created for both parties, because the other had what they each needed at the time, so a deal was done, and it had nothing to do with money. It was however, a complex negotiation about relative value, with the emphasis on what each could bring to the other, and still win.
Isaac did not consider the complications of game theory in his deliberations, but if he had, he may have put some caveats on his laws.
Jul 2, 2009 | Demand chains, Management, Operations
Supply or Value chains are essentially sequential, one activity logically follows the completion of the one prior, and in streamlining the timing and handover parts of a process, you can build great efficiency.
However, great leaps in performance will not come from incremental improvement in a sequential process, but from finding ways to complete activities in parallel, but this will require a whole different set of collaboration tools, to ensure that each parallel activity is working towards the same end point, using information that is consistent and complementary.
The exchange of information through the chain becomes absolutely essential as you move to reduce the cycle time and costs of activity sets in a chain by re-engineering the chain to progressively adopt parallel activities. Without essential information being far more freely available that is necessary in a sequential chain situation the whole exercise will be a disaster.
Simple first steps taken to “parallel process” can offer great improvement, but more importantly, they can be an indicator of what is possible, and a precursor of the sorts of information sharing capabilities that will be necessary to capture the promised performance improvements.
Jun 25, 2009 | Demand chains, Management, Strategy
Three things constitute the basis of decision making in most enterprises, Risk, Cost and Reward. Boiled down, this is what it is all about.
In a supply chain, each participant does its own assessment and comes to a conclusion about the balance between RC&R in their situation, and acts accordingly.
For a chain to work with maximum productivity, each of the participants needs to come to a bunch of conclusions that complement all the others in the chain, and rarely will this happen on its own.
In some manner, control needs to be exercised through the chain, and as most managers know, managing the things over which we have so called control is usually hard enough, without setting out to manage things over which we have no control.
The control cannot be applied, it must be accepted as consequence of being a part of the larger entity, the chain, which is a part of maximising the RC&R matrix for the business.
Jun 24, 2009 | Demand chains, Strategy
One of the hidden challenges in most transformations of a supply chain to a demand chain, is the alignment of the incentives through the chain.
For a demand chain to be successful, each point in the chain must see its own best interests best served by serving the best interests of the entire chain.
In a normal supply chain, each point sets out to maximise its own position, with little regard to those “upstream or downstream” of them, leading to gaming, which almost always produces sub-optimal outcomes.
Aligning incentives provides the opportunity to maximise the productivity of the resources tied up in the chain for all concerned.
