Quality
- Real measure is whether or not a product or service lives up to customer expectations.
- Most important factor because quality drives customer behavior.
- Doing things right the first time - every time.
- SC Managers are responsible.
8 factors that comprise quality
- Performance
- Features
- Reliability
- Conformance
- Durability
- Serviceability
- Aesthetics
- Perceived Quality
Cost
- Customers value low prices
1. Productivity enhancement
2. Adoption of advance process technology
3. Locating facilities in countries with low-cost inputs
4. Sourcing from the world’s most efficient suppliers.
Flexibility
- The ready capability to adapt to new, different, or changing requirements.
- Operates with short lead times, is responsive to special customer requests, and can adjust rapidly to unexpected events.
Delivery
- Doing things fast consistently
- Sourcing, operations, and logistics
Innovation
- EARLY SUPPLIER INVOLVEMENT (ESI) = 1/3 reduction to man hours and 4 to 5 months shorter lead times.
- Helps create new markets and changes industry standards.
Customer Expectations vs. Customer Experience
Experience < Expectation = dissatisfaction
Experience = Expectation = satisfaction
Experience > Expectation = strong satisfaction
Customer Service Strategies
- Focus on internal service levels and goals.
- % defective products, % on-time delivery, fill rate (% of products actually delivered)
Customer Satisfaction Strategies
- Focuses on what the customers want/need by gaining direct input from the customers
- This can help to align goals, but focusing too much on it leads to inefficiencies.
- Not so focused on the now, but the past which leads to problems.
Customer Success Strategies
- Uses SC knowledge to help customers become more competitive.
- Managers understand what their customers’ customers really want.
1. Clearly communicated goal to help customers succeed
2. Clear understanding of downstream requirements
3. Investments in customer-valued capabilities
4. Training provided to customers
5. Resources shared with customers
Customer Segmentation
- The identification of unique groups of customers who possess similar needs.
- Helps managers develop the products and establish the systems needed to fulfill the needs of different customer groups.
Customer Success Factors
The capabilities that 1st tier customers need to satisfy their downstream customers.
Core competency
Something that your company does so well that it provides the company a competitive advantage.
- Ex. Honda w/ engine design.
ABC Classification
- Based on the Pareto Principle.
- 80/20 rule (80% of sales are generated by about 20% of all customers)
- A customers are the most important and C customers can become A customers.
Activity based costing
Ties specific costs directly to the customers that create them.
Customer Relationship Management
- Incorporate data-capturing, storage, and analysis capabilities to help companies create customer profiles.
- Determines customer’s profitability = appropriate fulfillment strategies.
Why customer service in America stinks
- Companies seek to improve service levels, but direct efforts towards the wrong activities.
- Many companies claim to be service oriented but don’t deliver their promises.
- Access to better information has led some companies to purposely deliver low levels of service to customers who aren’t as valuable.
Sources of dissatisfaction for customers
- Training
- Measurement
- Empowerment
- Policies
