In order to provide superior customer service, you must have your product available. What they want, where they want and when they want! We have already discussed that if the product the customer wants is not available, they will buy the competitors, or delay their purchase. But how do you supply a variety of products, keep them current, and avoid obsolesce?

Lean inventory has been the goal of many manufactures and lean was designed to minimize waste, and improve efficiency. In the automotive industry this was the music that the manufactures marched to for many years. Keep supply ready to build, but minimize the inventory of parts. Only add inventory of parts at the moment they are needed. This lean inventory process was designed to provide stock with a short lead time. In reality the automotive manufactures are running very lean operations, but also probably some of the least agile operations. Lean by definition means with little fat. Agile on the other hand means nimble. If a customer wants a car with the color and the accessories they want, the lead time in weeks or months. Yet the automotive suppliers have inventories of unsold cars. What can we learn from this, and how can we use put agility to use to provide superior customer service?

First, lean does work well with products that are high volume, and low in variety. A video game console for instance. A WII is a WII, but they are also subject to obsolesce. Here lean makes sense; don’t buy the components until there is demand.

But what of a computer? Here there are endless varieties and high volume. In less predictable environment, agility is necessary for superior customer service. Agility is not a single company concept but must reach one end of the supply chain to the other. For a manufactures to have agility in their manufacturing process, they need agile partners. Those partners must be connected in a virtual supply chain based on sharing of information. Here are seven steps to superior customer service through agility:

  1. Synchronize activities through shared information. EDI (electronic data interchange) through web portals, or real time with RosettaNet. Quality information available immediately.
  2. Work smarter. Analyze business processes to determine where no value is added, and time is wasted.
  3. Partner with suppliers to reduce inbound lead times. Choose vendors based not only on price but on response time. Time is money and there is only one opportunity to be first in the market.
  4. Reduce complexity. The simpler the process the more likely it can be repeated, and less chance for less than perfect quality and customer satisfaction.
  5. Postpone final assembly or configuration. This reduces the risk of obsolesce and minimizes working capital tied up in unwanted finished goods.
  6. Manage processes not functions. Division of labor has created silos in business so makes change slow, and department goals and budgets can be at cross purpose.
  7. Utilize appropriate performance metrics. Budget based metrics do not encourage agility since cost is the only measure.

Lead time reduction, and perfect order rate create customer satisfaction. A satisfied customer is a retained customer. A retained customer is adds to the revenue of the company and minimizes selling expense, which leads to greater profit.

I welcome your comments.

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