Philip E. Quigley, CFPIM, PMP | July/August 2012 | 22 | 4
Responding quickly to customer desires
If you look around, it’s plain to see that sales and marketing are being transformed by the internet and social networking. One example can be found in Best Buy’s decision to downsize and close stores due to declining CD and DVD sales. Even Walmart and the automotive industry are feeling the impacts. Members of sales teams in diverse industries all carry iPads and chase customers on Facebook and Twitter. The internet clearly is changing every sales business.
But what does this mean for companies and professionals in supply chain and operations management? While there is no simple checklist for surviving and thriving in the internet age, the current trends can begin to describe what issues will be prevalent in the near term. For starters, customers will express their likes and dislikes and expect businesses to respond. New designs might be rushed into production, existing designs might be modified, new versions might be produced, and prices might go down. Regardless, it means supply chain and operations management professionals must be part of the dialogue: sitting in on marketing meetings, monitoring customer feedback, and becoming involved in decisions about how to respond.
What happens, then, when a customer has more than a mere suggestion or complaint, but a real quality problem? A recent example of this is found in the highly publicized Toyota recalls of 2009 and beyond. There had been rumors of trouble, but they were not taken seriously until an accident killed an entire family. The challenge lies in how to monitor the chatter from various channels, understand what people are saying, and correctly prioritize issues so they get resolved quickly. It requires looking at the organizational structure, evaluating who can makedecisions, and reexamining reward systems, to name a few essential steps.
Next, consider the fact that customer communication is volatile and can spike or dip with the success or failure of a product. Contrast the millions of iPhone sales with the sharp decline in demand for Blackberry products. Supply chain and operations managers must fine-tune enterprise resources planning systems and rethink facilities and suppliers to be able to identify sales trends and react quickly—within days or weeks, not months or quarters.
Taking swift action
I recently read an article about how Honda has made its auto factories more flexible. Literally, a facility can build one model one day and switch to another the next. Honda accomplished this with careful thought and at considerable expense, but the company now has the ability to change with the market. How does your organization compare? How fast can you ramp up or down a product or product mix? It depends on the speed at which you can get data, analyze them, and make a decision. It also requires the ability to swiftly implement the decision with certainty.
It is crucial, when analyzing your own processes, to document them carefully and understand how they work. Use devices such as flow charts, and develop metrics that show how agile your company can be. You must have an understanding of how well you perform and how fast you can do things in response to customer input.
These reactions may seem unnecessary now, but look at which companies are going bankrupt and which are thriving. Watch how automotive dealers handle their customers pulling up inventory and price data on their smartphones and using this as leverage in negotiations. The world is changing. To put it simply, we are going to have to adapt or die.
Philip E. Quigley, CFPIM, PMP, is a senior application portfolio manager for Computer Sciences Corporation. He teaches at Chapman University’s Argyros School of Business and Economics and California State University at Fullerton. He may be contacted at firstname.lastname@example.org.