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In today's troubled business climate where customers are constantly bombarded with new products as well as services, and where competitors appear around every comer, business as usual will put you out of business. Let's face it, stability and predictability are history. Business today is neither stable nor predictable. To try to exist and flourish with a business model that was designed to support stability and predictability is like trying to stop the earth from turning—it can't be done! Success in business today reflects your ability to solve your customers' problems before they even know that they have them. You must anticipate their changing requirements even before they realize that they have changed while maintaining the highest standards for quality and service, all at an acceptable price. In this presentation, we will introduce a new business model as well as a different philosophy to running a business; we will demonstrate where today's management strategies, tactics, and tools fit in this increasingly traumatic business climate. We will provoke and challenge you to rethink the conventional wisdoms that you have grown comfortable with. We will introduce you to a new business model in which the customer and the people who care for the customer take center stage, a business model in which the business processes necessary to assist both the customer and the people are in harmony. THE CUSTOMER A business model that does not empower and focus your people and your business processes on supporting your customers is doomed for failure. A business model that was designed to support a mass production environment cannot be effective as the environment shifts to mass customization. Frankly, it does not matter what you think about the quality or performance of your processes. It only matters what your customers think! The very best measurement from a customer perspective is "easy to do business with." Check for yourself—call your company and check on an order, ask for a quote, seek technical information, or ask for assistance with instructions. How many times do you get put on hold? How many different people do you get forwarded to? Do you even get to talk to a person? How many times do you hear "this darn computer..." "she's not here today, but I'll do my best to help..." or "that's not my job..."? Information is power. Experience has shown that by sharing all the information, you arm your people with the ability to care for your customers. The design of your business model and core business processes must position your people to assist your customers instantly, accurately, efficiently, and effectively the first time and every time. The enterprise excellence business model starts with the customer (markets, potential customers, existing customers, and the customer database) and interfaces with each of the core processes, providing the voice of the customer as the primary input to each. STRATEGY DEVELOPMENT AND BUSINESS PLANNING Strategy development and business planning starts with defining the types of customers that could benefit from your products and services. Your strategy development and business planning core process should center your business on one of three dominant strategies: best product, low price/cost, or best total solution. Please see the following articles: "Strategy, the Key to Financial Payback From Reengineering," APICSInternational Conference Proceedings; "Reengineering the Front Office: Cashing in on the Cash Cow," 1997 APICS International Conference Proceedings. It is important to understand that strategic planning is not about predicting the future, but about creating capabilities for success in an unpredictable future. Business today is complex, and business strategies have followed in their complexity. High-performance businesses, however, do a much better job of focusing their 'Value delivery core processes" to better support a much more highly focused business strategy. The marketplace has identified three dominant strategic positions: lowest price/ cost, superior product, and best total value. The core value delivery processes needed to support a superior-product-dominated strategy differ from the core value delivery processes needed to support a lowest-price/ cost-dominated strategy, and again from a best-total-value-dominated strategy. Without agreement to a dominant business strategy, it becomes very easy for a company to try to be all things to all customers and to attempt to have its business processes support all three. This proves to be virtually impossible, and ultimately results in poor customer satisfaction and loss of market share at increased costs. In addition to a dominant strategy, a mission statement (purpose), a vision statement (direction), and a set of values should be defined. Further, a set of business imperatives, core process performance criteria, and specific action plans, with time frames as well as responsibilities clearly identified, must also be defined. The strategic plan is reviewed and revised semiannually, and the business plan is reviewed monthly and revised quarterly. IDENTIFYING, ACQUIRING, AND RETAINING CUSTOMERS The selection of a dominant strategy will focus the marketing and sales efforts on identifying, acquiring, and retaining customers that the selected strategy has identified as desirable. At the same time an effort must be made to move away from customers that do not fit the ideal profile as customers that fit it are acquired. One of the primary objectives of this core process is to provide ahighly accurate demand signal for the supply side of the business. A demand profile by product family/line in dollars and units is generated and updated on a regular basis. These demand profiles consist of your current backlog, high probability quotes and releases, and forecasted future business. The demand profile should extend into the future 12 to 18 months. This rolling demand profile is updated at least twice monthly at a formal meeting called the "bookings review." The bookings review is a meeting in which the demand manager documents and formally communicates to the master scheduler changes to the demand profiles. These changes are then incorporated into the business operations plan and master schedule. This ensures that the supply side of the business is in balance with the demand side. The ability to quote and promise delivery are also essential components of this core process. To Be Continued STAY CONNECTED To stay current on Lean Management Basics and Best Practices, subscribe to our weekly MBBP Bulletin... and we'll send you our PowerPoint presentation "How to Survive in an Entirely New Economy." All at no cost of course. Your personal information will never be disclosed to any third party. privacy policy
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