ASSIGNMENT FOR WEEK 6
In last week’s assignment, I tried to cobble together some reading sources that would help you think about how your company might:
- Figure out who the core, most profitable customers are. To then,
- Enlist their help to re-define the measurable service metrics for what constituted basic service brilliance for the logistical, replenishment of the commodities that they are buying from you. As well as potentially identify new, extra service values that you might be able to provide to customers within a common niche on a bundled or unbundled-for-fee basis depending upon the "A-D" economics of their potential purchasing.
If your company’s basic service metrics are:
- Not perfectly tuned to a target customer niche.
- Not perfectly, consistently executed possibly on a guaranteed basis.
- Falling short of a new, expanded definition of basic, expected service brilliance.
Then, who will tell the company and the service-providing employees that there are service improvement opportunities? No one likes to hear that their service output is mediocre and only differentiable by equally or bettering a lower competitive price.
One slide at my site that ties the entire "service reinvention (chronological0 process" together is slide #9 in "slideshow #10" at my site. Find this one slide and print it out, because it will help me to organize and integrate some of our past, present and future assignments. Here’s the link to the slide show: ./articles/Identify_Customer_Niches.pdf.
After accomplishing step 3 in slide 9, we then are faced with step 4 -internal service capability improvement - that requires enough change to stop most companies. To help you think about how you would introduce the need to change in a "tell and sell" way, here are some thoughts and readings to do for this week:
THINGS TO THINK ABOUT AND READ FOR THIS WEEK
We might also point out to our fellow employees the importance of measuring the service performance gap (present levels versus perfection). Posting service metrics on the wall can provide a North Star re-organizing effect. If we keep looking at what is versus what should be, then we will eventually start to unweave how we do things to reweave them to do what we know we should. Leaving them on the wall for too long without successful change/progress will risk, however, apathy and demoralization.
- When we talk about changing for the customer it is helpful to have specific customer case examples to use. Who are the 5 most profitable customers in the number one niche from which and from whom the company makes a disproportionate amount of profit? Personify the niche and service metric requests with customer names/pictures or interview videotape highlights.
- We will also have to sell the collective benefits to both the company and all employees for improving our service. For food for thought on this challenge, read these two articles at these links:
Another example of a North Star measurement system was in an article in assignment #4 entitled: "A Strategic Time Management Assignment". Point 7 in that article suggested creating a one-page, summary report for each profit center that listed the 5 most – profitable, promising targets and losing – accounts. After 5 to 7 months of receiving these reports, my experience has been that some managers will, after having started to notice and think about new things, actually start changing their activities to start focusing on the strategic "5, 5 and 5" accounts. Successful change must usually be preceded by a seemingly lengthy and ideally continuous "dialogue" stage that allows both consensus and commitment to build.
To help you better understand and articulate the service change opportunities your firm may have for a target customer niche, read through (for this week) slideshows #3 and #4 at my site. Here are the links: ./articles/Dist_VAlue_proposition.pdf, ./articles/Dist_VAlue_proposition.pdf.
When it comes to service processes that will snake through different departments to finally deliver the final measurable metrics to the target customer, who is the quarterback, the service process manager? Please read the following article on why a "service manager" is critical to both re-engineering and re-tuning service processes that go through multiple departments. The link: ./articles/3_9.asp.
How do service processes handled "surges" of goods arriving to be received into a warehouse and surges of orders being placed to go out of a warehouse? How can we have 100% on-time delivery and zero errors when there are too many orders to process, or we might be caught short-handed? Unless a lot of people are cross-trained to do perfect, same-day receiving of a surge of incoming goods, then we can’t sort the goods into their picking locations in time for next morning orders. Effective fill rates, order size, customer service satisfaction and order fulfillment productivity will all drop. The same type of problem can occur when we receive a late surge of incoming orders on a given day. The answer to both surge opportunities is to have people in the order fulfillment pipeline (and perhaps other support staff) to be perfectly cross-trained at enough jobs to be able to fill in where and when needed. How should we pay more, to get more, to cross-train more to get a lot more productivity in our service fulfillment areas? For food for thought read this article: ./articles/5_2.asp.
Another way to handle surges is to practice customer triage and take care of the most profitable and promising ones first and for sure before addressing the marginal ones that will get lower service levels if need be. This concept is covered in slides 6 and 7 of slide show #3 at my site, which was assigned above. All employees agree that in their personal lives they should get extra consideration if they are a good customer, but to avoid confrontation with demanding (small, losing) customers, they will insist that "It isn’t right to treat customers differently." Can you deal with this pushback?
- If a company is going to successfully and consistently deliver perfect service, they will have to re-think their service processes for bottlenecks, failure points and more-flexibility-needed points. Skim through this exhibit that provides a chronological checklist for a would-be "service process re-engineer." Link:
This week’s assignment hits on steps 3 and 4 of the total service reinvention process (remember, slide 9 in slideshow #10). Next week we will focus on some measurements and case studies that will help us to integrate the thinking, measurements and tactics behind the first four steps of the "service reinvention process".
DISCUSSION QUESTIONS FOR WEEK SIX
Have you or others that you know personally experienced the upside of perfectly tailored (extra) services for better customers or the downside of being a small (money losing?) customer that gets a lower tier of service than the Executive Platinum group? Share the story and why it makes sense or doesn’t.
- What keeps your company (and/or you) from telling, selling, scoring and changing your company’s internal service capabilities to give a target customer niche exactly what it wants? With more insight into these issues and challenges, what can you do or not do about it? Why?
- Could your company understand the logic of paying higher wages to front-line hourly employees to then be able to cross-train them ("learn-n-earn") to get even higher total team productivity? Why or why not? Does it matter? (Remember the article "Pay 150% to get 200% at this link:
End of Assignment for Week 6
Merrifield Consulting Group, Inc.
101 Black Oak Place
Chapel Hill, NC 27517