Having a nodding acquaintance with the Concept of Zero Defect


In the late 20th century, the zero defect concept has gained momentum in many developed countries. This has made people to go in for prevention techniques rather than the corrective techniques which were in conventional use. Attaining zero defect is not a one time affair. This is a slow process requiring continuous improvement. Sustained efforts may result in zero defect in the long run.  It should be understood that six sigma concept is also related to this.

 

The methodology is a continuous improvement process, at every stage attaining an improvement over the previous one. Initially the current status of the process and the desired future status of the process are to be clearly defined. The difference between these two indicates the quality improvement that has to be brought to the process under consideration. Once this exercise is over the next step of quality improvement has to be planned. Now the final quality status attained in the first exercise becomes the current status. A new desired future status is fixed. As before the difference between these two will become the new quality improvement which has to be introduced in the process. Steps have to be taken to effectuate this incremental quality. This exercise is again continued. Every time the exercise is carried out, it can be noticed that the incremental quality improvement to be introduced is reducing. After a prolonged exercise, this gap will become minute and one can hope to achieve the zero defect at the end.

 

How much is the incremental quality improvement that can be achieved and how soon the zero defect status will be reached, are dependent on how creative the ideas are. Highly creative ideas can help in reaching the zero defect status fast.

 

Different techniques, such as “mistake proofing” can also be used for zero defect concept. In this method, prevention is considered to be the prime factor and at every stage it is essential that the preventive measures are incorporated to avoid defects at any stage.

 

My Consultancy–Asif J. Mir - Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please contact www.asifjmir.com

Usage Analysis and Customer Retention


Segmenting markets by consumption patterns can be quite insightful for understanding your customer mix. Differentiated marketing strategies are needed for the various user groups—first-time users, repeat customers, heavy users, and former users. By classifying customer accounts based on usage frequency and variety, companies can develop effective strategies to retain and upgrade customers. There are many highly informative, low-cost applications of usage analysis that should be considered by management.

By classifying customers into usage categories, management can design appropriate strategies for each market segment. The objective is to move customers up the ladder, where possible. The implication of usage analysis is that all customers are not equal; some (the heavy users) are clearly more important than other categories.

The Pareto principle, or 80/20 rule, is insightful in the context. In a typical business, approximately 80% of sales comes from about 20% of customers (also, note that generally about 80% of your sales comes from 20% of your goods or services). It is important to defend this core business, as heavy users are primary attraction targets to key competitors. These highly valued customers require frequent advertising, promotions, and sales calls and ongoing communication efforts.

By knowing who better customers are—through geographic, demographic, psychographic, and benefit research—we have a solid profile of “typical users.” This information is very helpful in playing subsequent customer attraction/conquest marketing efforts. Realize that the marketing information system, the database, plays a key role in customer analysis and decision making.

For unprofitable customers, the company often needs to find new ways to serve them more effectively. Technology such as ATM machines, ICT, can be used in this regard. Quarterly contact through a newsletter and direct mail or access options such as toll-free telephone numbers and websites maintain adequate communication with low-volume users. In some cases, it may even be desirable to sever the relationship with certain unprofitable customers.

A good understanding of our customers’ purchasing patterns helps us keep our customers and gain a larger share of their business. Share of customer (customer retention focus) has supplanted market share (customer attraction focus) as a relevant business performance dimension in many markets. Share of customer is adapted by industry and goes by such names as share of care (health care), share of stomach (fast food), and share of wallet (financial services). If a company can increase a customer’s share of business from 20 to 30 percent, this will have a dramatic impact on market share and profitability.

Recency, frequency, and monetary value (RFM) analysis is a helpful tool in evaluation customer usage and loyalty patterns. Recency refers to the last service encounter/transaction, frequency assesses how often these customer-company experiences occur, and monetary value probes the amount that is spent, invested, or committed by customers for the firm’s products and services.

A more effective strategy is to classify customers via usage analysis and design differentiated marketing approaches for each target market. In sum, usage analysis can greatly assist us in our customer retention activities. Think about how to “hold” heavy users and key accounts, upgrade light and medium users, build customer loyalty, understand buying motives to meet or exceed expectations, use appropriate selling strategies for each targeted usage group, win back “lost” customers, and learn why nonusers are not responding to your value proposition.

My Consultancy–Asif J. Mir - Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please contact www.asifjmir.com

Clear Vision and Strategy


Vision can inspire, but it can also result in disillusionment if it is incomplete or incapable of achievement. Like an idea, it may have little value outside of an organization with the capability to give it a tangible reality.

Many attempts to formulate and implement visions and missions have been naïve and in some cases destructive. A wide gulf has emerged between rhetoric and reality, and between aspiration and achievement. Instead of inspiration and motivation, there is disillusionment and distrust. The agreement of vision is often perceived as the ‘input’, rather than as an initial step on what may prove to be a long process of implementation.

Progress is made in providing distinctive purposes and offerings, and the longer term and sometimes hidden consequences of the short-term reactions of corporate boards to economic pressures. It emphasizes that changing attitudes and perspective generally takes longer than is first thought.

The lack of top management commitment and of communication skills are major barriers to change. To share a compelling vision requires new attitudes and approaches to communication.

My Consultancy–Asif J. Mir - Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please contact www.asifjmir.com

Picking up on Lower Transaction Costs


Suppose a firm was pondering whether to integrate vertically into supplier activities or to keep buying supplies from the open market. One important factor is the decision would be the cost of each option. If the firm was buying the supplies from the market, it would have to search for the best price, best quality, and best on-time delivery, negotiate and sign a contract, and make sure that the terms of the contract are enforced. All these activities have costs associated with them—transaction costs. If the firm decided to integrate vertically, it would have to establish a value chain for the activities. It would hire, train, organize, motivate, and lead employees who carry out the activities of the supplier value chain internally—all of which also costs money. The firm would integrate vertically if its costs of organizing transactions internally are lower than those of doing so externally. That would depend on four things: asset specificity, uncertainty, the frequency of transactions, and whether the supplier is opportunistic. Asset specificity refers to how idiosyncratic an asset in the relationship becomes as it (the relationship) develops.

 

All else being equal, the higher the asset specificity, uncertainty, and frequency of transactions, the higher the transaction costs of market transactions, and the more the manufacturer should think about vertical integration.

 

My Consultancy–Asif J. Mir - Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please contact www.asifjmir.com

Organization’s Infrastructure


An architect’s work requires more than site selection and structural design. A building also has an infrastructure, a complex and sometimes invisible web of systems that work together to make the building functional and livable. These include the electrical, plumbing, and air conditioning systems, as well as the essential channels for people movement and telecommunication hookup.

Infrastructure is not just an add-on. The development of new technologies that provide efficient solar heating also required architects to consider a new set of factors when siting a building. Just as the invention of the elevator paved the way for today’s concrete and steel skyscrapers, some new organizational concepts and technologies are needed to make horizontally oriented structures workable and vacuum free.

This exactly runs in pairs with organizational infrastructure needed to make the new corporation work. It has issues such as the hierarchy of reporting relations, the career structures they imply, and the middle managers who populate them, along with ways to rethink control and coordination so that new learning, rather than redesign compliance, is produced.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please contact www.asifjmir.com

Psychic Profile of a Healthy Company


Just like a fine athlete is more than someone who isn’t sick, a healthy company embodies people and practices that combine and coordinate to produce an exceptional performance.

Healthy companies all possess and emanate a certain vitality and spirit  This spirit is not a religious fervor or a mindless cheerleader enthusiaism but a deep feeling of shared humanistic values at the core of the company. These values are the glue that binds healthy, successful employees with healthy, productive workplaces.  They influence the way people act and think at all levels of the company and form the foundation for corporate policies and practices. They define roles and responsibilities and dictate how business decisions are made. These principles are expressed and applied at every turn of the business, from receptionists and loading dock workers, through managers and executives, and into the board of directors.

These values are perpetually interacting, expanding, and contracting like a living entity. Each value depends on and determines the health of the others; sickness or disease that undermines one weakens all; robustness in one value strengthens all. The values at at the heart of the healthy company enable it to continuously grow, evolve, and renew itself, reinforcing what is productive and positive and sloughing off the unhealthy and unworkable. In short, the causes and effects between values, people, and companies are not linear but circular. Values are the center of the enterprise; they circulate through every cell and artery of a company, and a company and itsemployees either reinforce healthy values or bring about their decline.

Healthy company values bind people to their organizations. By creating a common language and appealing to principles of dignity, commitment, and growth, these values help to create an identity that connects thousands of people around a shared mission. Suddenly, the traditional hard values of business success and the nontraditional soft values of human development merge into one dream.

This convergence generates a synergy, producing something greater than the sum of their parts–a vital business that lives and breathes a humanistic philosophy, that treats people as more than profiot producers, views relationships as more than simply financial contracts, and regards the workplace as more than a setting for business. It is a holistic environment, one that nurtures, stretches, and empowers people. The result is an organizatipn that optimizes people, principles, and profits.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please contact www.asifjmir.com

Motivating Sales People


A new product is an intrusion. It takes time. It disrupts schedules. It involves change and risk. Salespeople are known for wanting new items to sell, but there are still negatives. Salespeople are not usually given reduced territories when asked to sell a new product. So, it is important a) to investigate in advance any possible reasons why salespeople might object to the new product, b) to give them all the training and materials they need to be effective, and c) to make sure the product is available, in their territories, when they start writing orders for it.

The key is to do your job such that they can do their job. That means to have a product that customers will understand and want to try, and to train the sales force to understand and communicate the story. This training should use the latest technologies.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please contact www.asifjmir.com

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