Building a Chain of Customers - Softcover

Schonberger, Richard J.

Softcover

ISBN 10: 1416573305 ISBN 13: 9781416573302

Verlag: Free Press, 2007

Inhaltsangabe

Richard Schonberger, in his fourth and most important book yet, introduces a powerful new concept: that the many links between and within the four main business functions -- design, operations, accounting, and marketing -- form a continuous "chain of customers" that extends to those who buy the product or service. Everyone has a customer -- the next department, office, shop, or person -- at the hundreds of pioneering companies Schonberger has studied throughout the world.

Schonberger demonstrates the universality of customer wants: Both the next and final customers want ever better quality, quicker response, greater flexibility, and lower cost. This condition provides a common strategy and calls for common methods to be used across the organization. Every employee is a data gatherer and analyst, unearthing more and better ways to provide for these customers' wants -- before the competition does so.

As the new thinking and methods permeate every comer of the firm, they topple departmental walls and adjust gang-like mind-sets and "them-versus-us" attitudes. Performance is no longer measured by internal costs but by improvement as seen by the next customer; direct control of causes generally replaces after-the-fact control of costs. Design is brought out of isolation. Finally, with the rest of the firm reoriented toward customer service, marketing escapes from a "negative" mode -- covering up for failures -- to a positive one -- crowing about the firm's competence and ability to improve.

With the close attention to detail for which he has become famous, Schonberger constructs a blueprint for unifying corporate functions, brilliantly describing the new microcosms that will make up the company of the 1990s -- focused teams of multi-skilled, involved employees arranged according to the way the work flows or the service is provided -- that compose the chain of customers. Aetna, for example, is organizing customer-focused teams that cut across underwriting and the administrative functions. At Hewlett-Packard, teams of marketing, manufacturing, and R&D people have already gone through several iterations of "activity-based costing", which provides product designers with previously unavailable data for shaving costs throughout product life cycles. And at Du Pont, even production people on the factory floor are involved in assessing competitors' product quality and probable costs and methods. Through these and hundreds of other real company examples, Schonberger shows how the customer-driven chain of action leads directly to the kinds of bottom-line performance that have been so elusive to executives who manage at a distance "by the numbers" -- namely, higher profits, greater security, and gains in market share at the expense of the laggard competion.

Über diesen Titel

Über die Autorin bzw. den Autor

Richard J. Schonberger, PhD, is president of Schonberger & Associates of Seattle. He is the author of more than 170 articles and papers, a twelve-volume video set, and several books.

Auszug. © Genehmigter Nachdruck. Alle Rechte vorbehalten.

Chapter 1

The Great Awakening: Earthquakes in the Business Functions

We have learned more about the right way to run a business in the 1980s than in the preceding half century. In a nutshell, we've learned this: that world-class performance is dedicated to serving the customer.

By that I don't mean tender loving care, service with a smile, all returns accepted -- no questions asked, ten-year warranties, consumer telephone hotlines, and customer satisfaction polls. While all those are good practices, they generally apply to just the final customer.

How much good can it do to try to make it right for the final customer when much of the organization that provides the goods or services is delay- and error-prone and self-serving? That is the sad truth about business and industry. It has taken a series of earthquakes, tremors, and aftershocks to wake us up. The wide awake now see the final customer as just the end point in a chain of customers. Everybody has a customer -- at the next process (where your work goes next). Making the connections along the chain is our common task.

I'll not dwell on the consequences of staying asleep. That is, we won't go into the recent history of lost jobs, pay cuts, shut-down plants, bankruptcies, and whole industries migrating across oceans. Those might sound like quakes and tremors, but let's not repeat well-known tales of woe.

Instead, it is time to look at the bright side. I'll label as earthquakes momentous new ideas that are reshaping the way we think about and run business enterprise. The quakes and tremors are toppling and rending asunder old concepts and practices that resulted in poor performance and failure.

Figure 1-1 indicates the major and secondary shocks and, roughly, when they occurred. I'm not including quakes that affected just a single country (such as Japan's head start in quality) or a single company (such as the ability of McDonald's to provide a uniform product in spick-and-span restaurants all over the world). Rather, Figure 1-1 suggests when the shocks woke up whole industries around the world.

QUALITY: FIRST AND GREATEST QUAKE

In the late 1970s a few Western companies that were suddenly faced with withering competition from the Far East saw through the fog. They cleared away the excuses (unlevel playing fields and so forth) and looked at clear measurable evidence: both the defects and yields in Western semiconductor products were far below world standards. It was the same for cars and power tools, air conditioners and steel, TV's and dozens of other electronic products.

Most of the great Western manufacturers eventually got around to estimating their costs of bad quality. Even in proud companies like IBM, Kodak, Philips, and Rolls Royce, bad quality was costing over 10 percent of sales. Defect rates themselves weren't that high, but the costs of rework, returns, warranties, lost customers, rescheduling, and so on, were.

Briefly, what happened was that hundreds -- no, thousands -- of companies were frightened enough to take the quality pledge. Literally, CEOs and presidents issued quality declarations and put them into corporate mission statements. Top executives who earn in excess of a million dollars a year sat through courses in statistical process control. A few followed the Texas Instruments model: Top exec trains next-level execs, who train their subordinate managers, who train theirs -- and so on down to machine operator, assembler, office clerk, and stockkeeper.

What superlative shall I use in describing the outcome? Awesome comes to mind. I certainly am awed. Who could have believed that, for many items, defect and nonconformity rates could fall from percentages to negligible in companies all over the globe. Yet they did in just a few years. Here are just four examples:

* At Kodak's copier division the defect rate had averaged around 50,000 parts per million (PPM) in 1985. That means 50,000 bad ones (bad components, bad welds, bad-fitting assemblies) out of each million. Less than a year later, detects were down near the world benchmark of 950 PPM. At the same time the number of internal quality inspectors dropped from twenty-five to zero, because the assemblers, well-schooled in statistical process control (SPC), had assumed responsibility for quality.

* TRW's steering and suspension system division has been reorganizing its four factories into work cells and teams that take over the job of quality. In 1987 one work cell shipped 500,000 pieces with only two rejected by the customer. Larry Kipp, plant manager, says it hurt the technicians' pride that those two got out of the plant. Kipp observes that "This is the most exciting thing I've done in my twenty years" in manufacturing.

* The U.S. Internal Revenue Service trained 10,000 managers in quality management (Juran approach). Organization of quality teams throughout the agency followed. One result: In 1986, out of 1.2 million tax accounts received, weekly processing errors averaged 30,000 to 40,000. In 1987 the error rate was down to 3,000 to 4,000, while volume increased to 1.5 million per week.

* Last rites had been said for Big Steel in the United States, the causes of its impending death being high costs and bad quality. For example, in 1983 the Ford Motor Company was rejecting as much as 8 percent of steel from domestic plants. By 1988 the reject rate was down to 0.7 percent, on a par with the Japanese.

Those examples come from a bulging file folder of similar ones from other companies and industries. The dramatic quality improvement stories do not come from just the wealthy industrialized nations. Managers and operators know about and use SPC in good companies in Mexico, Thailand, Brazil, and the countries that surround them. And why not? It's easy to learn, training materials are available in every language, and educated managers all over the globe are looking for low-cost solutions that work.

The quality turn-arounds are no longer limited to the major companies that have training budgets. Big industry has been inviting people from key supplier companies to training courses in quality concepts. Now, with public and private training in SPC widely available, that is becoming unnecessary.

QUAKES AND TREMORS THROUGHOUT MANUFACTURING

The quality earthquake softened everything up for tremors to come in all else. The second big quake, which began in manufacturing, was called just-in-time (JIT) production. Some saw it as inventory reduction (many still do). Those in the know see it as quick response to the customer, plus another jolt for quality improvement.

Quick Response in the Chain of Customers

The payoff for the JIT leaders has been much like the quality payoff': five-, ten-, and twentyfold reductions in waste -- in JIT's case, waste of time waiting for work to start at each step in the chain.

Long queues all over the world signify why-improvements of that magnitude should be possible. Human waiting-line problems are obvious. Delays in offices are much worse, except that what waits is a document buried in an in-basket, not a impatient person standing in line. In manufacturing, piles of parts sit idle between every stage of production; often the quantities are so large that they serve their sentence in plant stockrooms. They are waiting to be summoned into action on a work bench or a machine. Sometimes they wait for months.

Documents and parts forced to wait can't, in a huff, take their business elsewhere. The final customer can! Thus, quick response and the JIT techniques are keys to competitive gain in any business.

For example, supermarkets in some highly competitive cities have turned to promoting shortest checkout lines, not just lowest prices or freshest produce. Quick response has spawned several...

Details zur Ausgabe

• Verlag: Free Press
• Erscheinungsdatum: 2007
• Sprache: Englisch
• ISBN 10: 1416573305
• ISBN 13: 9781416573302
• Einband: Taschenbuch
• Anzahl der Seiten: 360
• Kontakt zum Hersteller: Nicht verfügbar
• Verantwortliche Person: Simon and Schuster Netherlands BV; info@simonandschuster.nl; ; Herculesplein 96; Utrecht; 3584 AA; Niederlande