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1、“Hot topics”SeminarPortsmouth Business School21 June 2006Strategy:where do you start to improve a company?Professor Michael KayeEmeritus Professor of Operations and Quality ManagementUniversity of Portsmouth1Overview of presentationCustomer value and competitiveness:latest research findingsCustomer
2、Value Management as a competitive strategyTransforming the organisation using“Lean Methods”Successful implementation of a Customer Value Strategy2The Evolution of QualitySTRATEGICQUALITY MANAGEMENTQUALITY ASSURANCEQUALITYCONTROLINSPECTION1900 1920 1930 1940 1950 1960 1970 1980 1990 2000COMPETITIVESQ
3、M3Evolution of qualityCompetitive mixQuality emphasis in 1980sStrategic Quality emphasis in 1990sCompetitive Quality emphasis in 21st centuryDesignFitness for purposeIntegrated application of technologiesBuilding in the voice of the customerReliabilityRight first time“to be the best”Right every time
4、“ahead of the best”Reputation as role model for best practice in anticipating customer needs accuratelyProductivityPerformance/operational costsLife-time costs/economic access to new technologyStrategic partnerships enhance responsiveness and optimise resourcesDelivery and dependability5 star respon
5、se to repeat ordersMatching customers strategic milestonesPredicting customer needsService(after sales)Prompt after salesContinuous supportRelationship management on-goingPromotional follow-upBuild up customer confidenceBuild up customer strategic commitmentStrategic alliances with customers to enha
6、ncetheir competitivenessCustomer ValueManagement Strategy4Latest research findingsinto customer valueand competitiveness5Organisations involved in the research70+organisations Cross-section of organisations operating in public,private and voluntary sectors (including manufacturing,service,defence,he
7、alth,criminal justice,high-technology,central and local government)Small,medium and large organisations Geographical scope of operations-UK,Europe,International(Far East and South-east Asian),global industries6 Challenges to achieving competitiveness:our research findings1,Over-emphasis on financial
8、 business drivers with little emphasis on customer value as a driverOrganisations were operating in crisis mode i.e.being buffeted by a rapidly changing and turbulent environment reactive not proactive in setting strategy and planningOrganisations were not designed for the responsiveness needed to a
9、chieve and sustain competitivenessThere was a need to satisfy a complex web of stakeholders and customers confusion and conflicting customer needsMeasurement systems were lackingOverload of management initiativesStrategies were not effectively deployedKaye M M&Dyason M D(1995,2006 forthcoming public
10、ation)7Characteristics of high performing organisationsActive involvement of top management in the regular strategic review of customer needs,and in the creation of a realistic long-term strategic vision that takes account of market complexityRigorous management of the processes that deliver custome
11、r valueThe ability to design new processes that build in the“voice of the customer”and assure responsiveness to changing needs8Sustainability and what this means in practice in continuing to meet customer and stakeholder needs and expectations and to survive in an increasingly competitive environmen
12、t having the appropriate infrastructure and people skills to adapt quicklyManaging relationships between those engaged in the supply chain and how the effectiveness of these interactions can be measuredA clear understanding of“customer value”from the perspective of the customer,not the business,tran
13、slated into a“customer value management strategy”9Achieving and sustaining competitiveness through customer valuemanagement as a strategy 10Customer Value Management The strategy of Customer Value Management offers an opportunity to understand the relationship between customer satisfaction and key p
14、rocesses and to track improvement in business results or competitive positioning over time The focus shifts from reactive through proactive to predictive11Aim of a Customer Value Management Strategy The aim of a CVM strategy is to provide products and services to customers that are perceived by the
15、customer to be of greater value that they could expect to purchase or receive from the competition in similar markets(competitive advantage or“best value”)The CVM strategy must provide:a focus on customer perception of valuethe means to identify the key criteria or quality attributes of value to the
16、 customer and their relative importancethe means by which customer needs are broken down into actionable parts and linked to internal process measures12Customer value and sustainability extent to which key processes reflect the voice of the customerSuccessful outcomes depend upon managing the interd
17、ependencies between suppliers in order to speed up delivery and reduce cycle timesEmergence of“virtual organisation”characteristics to provide flexibility,speed of response found to be lacking in traditional functionally structured organisationsFlexible boundariesInnovationOptimising access to infor
18、mation and technologyCustomer involvement in designing product or serviceCustomer profiling and recognising differing needs and expectations13Examples of leading-edge customer value strategies from our researchThe application of“virtual organisation”principles to the supply chain:the boundary-less o
19、rganisation,resulting in fewer defects and faster cycle-time(Far Eastern leading electronics company)The design of a new process for logistics department,integrating the“voice of the customer”into the process.Collaboration with supplier,investing in latest logistics technology so that customer needs
20、 are met every time(Global motoring parts manufacturer based in South America)Lean manufacturing methods,including six sigma successfully pioneered by Motorola applied to key processes in NHS hospital and to UK criminal justice system in order to reduce waste and delays in work-flow14Competitive ben
21、chmarking key customer processes,sharing of communication tools and methods between leading European mobile communications company and the UK policeHigh value manufacturing companies including a strong base in production with unique processes,high brand recognition,or highly customised services(Cadb
22、ury Schweppes,Pfizer To determine appropriate key process improvement strategies so that the organisation works more effectively together(cross-functionally)to produce a product which meets the expectations of customers and stakeholdersDesign,deployment and regular review of customer-focused organis
23、ational development strategy and performance management framework in global steel manufacturer in order to achieve and sustain greater competitiveness.Baltic company now competing in volatile market place.15Achieving and sustaining competitiveness through customer value:transforming the organisation
24、 16Organisation Transformational ModelLeadershipTotal management involvementVisionMethodsBenchmarkingQuality improvementTools,including lean methods,six sigmaVoice of Customer(Servqual),Design ofExperimentsPeopleInvolvementCommunicationTeamworkTrainingReward and RecognitionStrategyInnovation-Inventi
25、onProcess qualityCUSTOMERVALUE17The 5“principles”of Lean Methods with Six Sigma1 2 6Specify valuefrom the point ofview of the customerIdentify the valuestream for eachproduct orservice4 3 5 Make valueflow withoutinterruptionsLet the customerpull value fromthe producer orsupplierPursueperfection186Be
26、nchmarkingProcess driven virtualorganisationDefect reductionAnalysis of varianceCustomer-focused strategic driverBalanced ScorecardsVoice of the Customer-ServqualProblem DefinitionProcess ManagementTools and techniques used in the studyProblem solvingDefineMeasureAnalyseImplementControl19Successful
27、implementation20Based on our experience,the following is critical for successful implementation:Approaches used(i.e.methods and“jargon”fits the culture of organisation)Practical relevance using tried and tested methodologies(e.g.deployed flowcharts,six sigma,Servqual)Flexibility of learning options
28、to suit the needs of the organisation and learning styles of individuals Training supports job and“project role”needs-minimal time away from jobLearning materials(e.g.Statistical process control examples)are based on clients own dataContinuous learning opportunity:methods are being applied to other
29、projects21Best practice pointers in ensuring successful implementationCareful project selection all projects justified against carefully selected criteria,based on customer impact,cost,effort,feasibility etc.All improvement projects linked to strategy and the need to address customer value issuesTop
30、 management on-going involvementOn-going support for those learningRealistic benefit realisation planAssign ownership for reporting and follow-up22Strategy where do you start to improve a company?Key features of a Customer Value Management Strategy23Customer value must be embedded in all aspects of
31、the organisation leaders must establish a process by which this is reviewed and sustainedLet the customer drive the business,not pursuit of profit.Maintain a regular review of competitiveness from all angles,not just financial.Measure the performance of important features or activities that add valu
32、e to your customers and make your organisation competitive Sustain high performing key customer-focused processes,free from defects and waste and“non-value added”activitiesBe proactive in forming partnerships and collaborations with suppliers and customers in order to mutually enhance competitivenes
33、sLook outside the organisation for leading-edge practices that could help to exploit a market opportunity think innovatively and adapt the learning so that it works for your organisationGenerate and sustain a culture that is excited by growth and innovation-align the reward and recognition systems t
34、o the achievement of strategic goals24References:Selection of authors publications and other key textsPublicationsKaye M M and Dyason M D (2005)49th EOQ proceedings,Antalya,Turkey,A model for managing complex stakeholder and customer relationshipsKaye M M and Dyason M D (2004)48th EOQ conference pro
35、ceedings,Moscow,Russia,Increasing Confidence in the Criminal Justice System by the use of Customer-focused ModelsKaye M M and Dyason M D(2002)Order in court(Part 1)and The Retrial(Part 2).UK Excellence,October/November pp 28-29Kaye M M and Dyason M D(2001)Applying six sigma in the public sector Qual
36、ity World,January pp 33-35Kaye M M and Dyason M D(1999)Customer value-driven strategies.Total Quality Management.Vol 10,Nos.4and 5,pp.594-601.Kaye,M M and Anderson R(1999)Continuous Improvement:The Ten Essential Criteria International Journal of Quality and Reliability Management,1999,Vol 16,No.6,pp
37、.485-506.Kaye M M and Dyason M D(1998)Achieving a Competitive Focus through Self-assessment.Total Quality Management Journal,Vol 10,No.3 pp 373-390.Kaye M M and Dyason M D(1995)The Fifth Quality Era,Total Quality Management Journal,January,Vol.7,No.1 pp.33-37Forthcoming Textbook:Customer value strat
38、egies the lean road (John Wiley)Forthcoming PapersOrganisational Transformation through the use of Customer-focused Models(Total Quality Management Journal Carfax Publishing)A model for managing complex stakeholder and customer relationships (International Journal of Quality and Reliability MCB Univ
39、ersity Press)The Impact of a more customer driven focus on organisational design in the public sector (Public sector journal yet to be determined)Other key texts and referencesPande P S,Neuman R P,Cavanagh R H(2000),The Six Sigma Way,How GE,Motorola and other top companies are Honing their Performan
40、ce,McGraw-HillWomack J P,Jones D T,(2003)Lean Thinking,Free Press Business ManagementKaplan R S,Norton D P(1996)The Balanced Scorecard:translating strategy into action.Harvard Business School PressLivesey F,(2006),Defining High Value Manufacturing,Institute of Manufacturing Sponsored Study,University of Cambridge25Thank youEnquiries are welcomed about our work.Contact details:023 92 84411726