Bill Remy
By
March 28, 2017

Customer Listening Drives Responsiveness: How Your Toughest Customers Can Help Build Your Business

Screenshot 2017-03-28 15.48.46.png

This article is  originally published on the TBM blog.

Customer expectations always rise. Call it a cardinal rule of order fulfillment. It happens one contract and one order at a time. By paying close attention to these demands as they’re being ratcheted up, you not only have time to adjust, you can improve your operational capabilities and thereby bolster future growth.

For example, a colleague recently recalled her personal experience working as a supplier to Walgreens. The Walgreens buyer was always pushing them to get better and respond faster. In the end she says it made them a much better company, and Walgreens got better and differentiated products and services for its customers, which drove revenue growth and improved profitability for both firms, cementing their long-term relationship.

Here’s some of what’s driving customers’ higher expectations today. In retail, as described by the Walgreens example, store managers are under intense pressure to maximize sales per square foot of shelf space. Everyone is focused on increasing same-store sales with better and different products without increasing inventory or creating stockouts. That pressure is reducing order fulfillment flexibility, which is having a huge impact back up the supply chain on distributors, manufacturers and their suppliers.

Automotive OEMs have been pushing to reduce inventory and improve the efficiency of their conversion process for decades. More and more supply chain and order fulfillment models in other sectors are approaching the automotive delivery model. Order on-time and in-full rate expectations are rising. Shipment delivery windows used to be 4-5 days; now they’re sometimes as tight as 1-2 days.

To manage and meet these expectations, manufacturers could build up safety stock, and some have, which adds carrying costs. But that eventually leads back to all of the old problems with forecast inaccuracy, and having too much of what customers don’t want and not enough of what they do.

You could just muscle orders through, but that approach only works for so long. Failing to meet the new, “unreasonable” expectations jeopardizes future sales.

The only real option is to buckle down and make your operations as responsive as your most demanding customers now expect. In this area the “time-based management” principles that TBM was founded on 25 years ago are just as relevant and applicable today. Staying competitive is still all about a relentless focus on quality and productivity combined with improving velocity and responsiveness.

Beyond your manufacturing processes—which we’ve written about extensively–improving supply chain responsiveness starts with redesigning your distribution channels. Then you have to evaluate your logistics network and travel times, and look at your manufacturing schedules and equipment changeovers. More sophisticated tools are being released every day to aid this effort. In the retail arena, for example, that could mean using advanced analytics to make better use of point of sale data to trigger supplier replenishment and schedule production.

However you go about it, figuring out how to meet the expectations of your toughest customers can build a growth engine that will help grow your business faster.

DOWNLOAD: Has Your Continuous Improvement Program Gone from the Five Whys to Why Bother?

About Bill Remy

Bill Remy is a senior executive with over twenty-five years of leadership roles in business management and manufacturing operations. He returned to TBM in 2011 after working at Invensys as Vice President, Continuous Improvement. Upon his return, Bill served as Executive Vice President of International Operations where he focused on the development and growth of TBM’s business outside of North America. Today, he is TBM’s President and Chief Executive Officer. He has experience in broad phases of business leadership across various industries including aerospace and defense, railway, industrial and agricultural equipment, technology, and process automation.


Expand Knowledge with Proqis Business Transformation & Operational Excellence Events

Welcome to BTOES Insights, the content portal for Business Transformation & Operational Excellence opinions, reports & news.
Subscribe to Business Transformation & Operational Excellence Insights Now

Featured Content

  • Best Achievement of Operational Excellence in Technology & Communications: IBM
  • Best Achievement of Operational Excellence in Oil & Gas, Power & Utilities: Black & Veatch
  • Best Achievement in Cultural Transformation to deliver a high performing Operational Excellence culture: NextEra Energy
    
Official Media Partner: Business Transformation & Operational Excellence World Summit
Operational Excellence Frameworks and Learning Resources, Customer Experience, Digital Transformation and more introductions
Business Transformation & Operational Excellence World Summit - BTOES17 - Watch the highlights now!
The Business Transformation & Operational Excellence Awards 2018

EXCLUSIVE CONTENT

Operational Excellence: Snapshots Full Series

Download the Exclusive 6 in 1 report series on BTOES Insights FREE Now!

Download content

For instant access to more exclusive content, just click the previews below.

  • Intelligent BPM Systems: Impact & Opportunity
  • Surviving_the_IT_Talent_deficit.png
  • Six Sigma's Best Kept Secret: Motorola & The Malcolm Baldrige Awards
  • The Value-Switch for Digitalization Initiatives: Business Process Management
  • Process of Process Management: Strategy Execution in a Digital World