Organisational Plans to meet customer needs

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Organisational Plans to Meet Customer Requirements

1. 1 Identifying and Meeting Customer Requirements.

Planning to ensure quality to meet customer requirements is about the way organisations

produce goods and services. Everything we wear, eat, sit on, use, or read comes to us




courtesy of an organisation with the intention that the product/service meets customer expectations. As Peter Drucker said [meeting customer needs, preface]

There will always, one can assume, be a need for some selling. But the aim of marketing is to make selling superfluous. The aim of marketing is to know and understand the customer so well that the product or service fits him and sells itself. Ideally, marketing should result in a customer who is ready to buy. All that should be needed then is to make a product or service available…

Since then, marketing has repeatedly come back to the idea of the customer as the key to the marketer’s success. Businesses and management need to focus more on the customer as a key to the organisations and each individual managers success. One of the ideas that have helped the customer become important in management terms is the recognition that markets exist within, as well as outside of the organisation as demonstrated in a map of flows to internal and external customers in appendix 1.

Before organisations can meet customer needs, they need to understand who the their customers are and what influences them when they are buying. Marketing is responsible for keeping an eye and ear on the market place in order to identify new opportunities and possible products or services that might be appropriate.



There are many market research tools for gathering data from customers in a formal and

structured way, including questionnaires and interviews, these techniques can be used by

marketing professionals to research and analyse customer needs and identify buying

factors.

For example Sasco, Overhead Projection Systems, [Slack et al] extensively researched their overhead projectors and identified the need to make controls clearer and easier to use. The use of focus groups and a value engineering exercise resulted in the new product that incorporated all customers’ suggestions at a significantly lower cost.

Product or services � what are they?

According to Philip Kotler [cited in, Ian Smith].

‘A product is anything that can be offered to a market for attention, acquisition, use or

consumption that might satisfy a want or need. It includes physical objects, services,

persons, places, organisations and ideas’ [ P57].

1. Definition of Quality.

Products/services need to meet customer expectations; therefore organisations need to

define quality as

Ø Meeting the needs and expectations of the customers;

Ø Covering all parts of the organisation;

Ø Including every person in the organisation;

Ø Examining all costs which are related to quality, especially failure costs;

Ø Getting things right first time’, i.e. designing-in quality rather than inspecting it in;

Ø Developing the systems and procedures which support quality and improvement;

Ø Developing a continuous process of improvement

Organisations need to convert these into products/services that get customer approval, in other words ‘consistent conformance to customers` expectations’.

There are two specific views of quality

Internal Defines quality as the closeness of a product’s performance to its design

specifications.

External Defines quality by how well the product performs.

Organisations should be looking at two types of quality

Design quality Determines the quality a product is designed to have.

Achieved quality Shows how closely a product achieves the design quality.

Quality has several aspects that essentially distinguish between what a product is and

what it does. These are

Ø Quality design. This is the proposed standard in the design specification. A product will have been developed so that it meets consumer expectations, including those for quality.

Ø Quality conformance. This is the extent to which the goods produced meet the standards laid down. It is important that the products are consistently produced to the required standards.

Ø Quality performance. This is the extent to which a product achieves what consumers expect from it which is particularly important for repeat business.

Ø Quality of reliability. This is the extent to which a product consistently performs well over a period of time. Again this is important for the future business.

.1 Quality Systems

BS EN ISO 000 is a set of worldwide standards that establishes requirements for companies’

quality management systems. ISO000 is used worldwide to provide a framework for quality

assurance, it describes a “system” for doing things; as shown in ‘The Quality Loop` in

appendix .

The following are just some of the advantages associated with ISO 000

Ø Operations find it provides a useful discipline to stick to `sensible’ procedures.

Ø Benefit in terms of error reduction, reduced customer complaints and reduced costs of quality.

Ø The ISO000 audit (companies are inspected to see if they warrant the ISO award).

Ø Adopting the ISO000 procedures identifies existing procedures that may not be necessary and can be eliminated.

Ø Gaining the certificate demonstrates to customers that the company is taking quality seriously; it therefore has a marketing benefit.

Quality standards demonstrate a commitment to providing a certain level of

service, but cannot guarantee that those standards will be achieved. The distinction

between quality and standards is as follows

Ø Standard = Predefined and measurable specification

Ø Quality = A consistent conformance to standard

It is possible for a product to be of high standard, but of low quality, i.e., a high

specification but lacks the consistency in meeting it. Overemphasis on the quantifiable could

lead to only measuring what is easily obtained and not what matters. This could lead to the

neglect of areas where performance is difficult to quantify.

It is better to limit performance indicators and quality standards to small number of effective

ones that really can help assess, monitor and improve performance. Joseph Juran defines

quality as ‘fitness for use` that he breaks down into quality of design, quality of

conformance, availability and field service [Dale].

. Managing Quality.

Quality Management involves

1. Determining policy e.g. Nil defects

· Customer demands

· Market segment

· Image etc

. Product specification

· Plant, equipment, materials, staff, process

· Vendor rating and sourcing

· Value analysis

. Motivate and decide who is responsible

· Quality circles

· Skilling

· Training

4. Measure quality

· Production control sampling (on line)

· Acceptance sampling (finished)

· Taguchi

· Centralised or decentralised control?

5. Make adjustments

6. Review management systems

. Quality of Design.

Customers determine what a business is, what a customer feels he is buying, and considers of

value is crucial. Products/services have clear tangible benefits

Ø Appearance

Ø Shape

Ø Colour

Ø Size

Ø Design

Intangible benefits

Ø Guarantees

Ø Servicing

Ø Customer care

Ø Repair service

Any company that thinks of its business in terms of customer benefits rather than in terms of

physical product is in danger of losing its competitive edge.

The following factors represent a product/service and are taken into consideration by the

customer

Ø Price

Ø Before sales service

Ø After sales service

Ø Company reputation/image factors

Ø Reliability of delivery

Ø Design factors

Ø Administration factors

.1 Function of the Operation Management.

Operations management is concerned with the way the product is made and this function is

central to the organisation because it produces the goods and services, which is the reason for

the organisation existing, but is not necessarily the most important function; it is one of the

three core functions of any organisation. These are

Ø The marketing mix;

Ø The product/service development function, which is responsible for creating new and modified products and services in order to generate future customer requests for service;

Ø The operations function, which is responsible for fulfilling customer requests for service throughout the production and delivery of its products and services.

In addition, there are support functions that enable the core functions to operate effectively,

these would include

Ø Accounting and finance function, that provides information to help economic decision-making and manages the financial resources of the organisation.

Ø Human resource function that recruits and develops the organisations staff as well as look after their welfare.

Almost all organisations have three core functions, due to the fact that all organisations have

the fundamental need to sell their services/product to satisfy their customers, and create the

means of satisfying customers in the future. Appendix demonstrates the activities of the

three core functions.

. Quality Planning and Control.

Organisations need to look at the activities that reconcile supply and demand in order to

produce a quality product/service to satisfy customer demands. Quality planning and control

is concerned with managing the ongoing activities of the operation so as to satisfy customer

demand, as shown in appendix 4.

Quality planning and control activities provide the systems, procedures and decisions that

govern the quality of products and services whilst connecting supply with demand.

We can define a plan as setting the intention for what is supposed to happen, and control as

driving through the plan, monitoring what actually happens and making changes as necessary.

Long-term operations managers make plans concerning what they intend to do, what

resources they need, and what objectives they hope to achieve.

Medium term concerned with planning in more detail (and replanning if necessary).

It looks ahead to assess the overall demand which the operation must meet in a partially

disaggregated manner.

Short term resources will have been set and it will be difficult to make large-scale changes

in resourcing. However short-term interventions are possible if things are not going to plan.

By this time, demand will be assessed on a totally disaggregated basis.

If planning and control are the processes that reconcile demand with supply, then the nature

of decisions taken to plan and control an operation will depend on both the nature of demand

and the nature of supply in the operation, appendix 5 shows how the control aspects of

planning and control increase in significance closer to the date of event. Planning and

control requires the reconciliation of supply and demand in terms of volumes, timing and

quality.

Organisations use different definitions for these processes, but the most commonly used are

as follows and shown in appendix 6.

Ø Loading process of working out the resources required to allocate to a particular job or task

Ø Sequencing concerned with the order in which particular tasks are carried out

Ø Scheduling actually gives a time when the work should begin, arranging jobs so that the work is done effectively as possible

Ø Monitoring and control

. Scheduling, Monitoring and Control.

There are various methods of scheduling, monitoring and controlling, for example Gantt

charts, MRP [material requirements planning or manufacturing resource planning] JIT

[just in time] and TQM [total quality management]. The Gantt chart, was introduced by Henry Gantt who was a colleague of F.W. Taylor, who’s aim were to increase production methods, not just to lower company costs and thus increase profit, Gantt humanized Taylor’s ideas of scientific management by developing this simple device that represents time as a bar, or channel, shows start and finish times for activities and the actual progress of the job, an example of two Gantt charts is shown in appendix 7. The advantages of a Gantt chart is that they provide companies with simple visual representation both of what should be happening and of what actually is happening in the operation.



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