voice of the market
TRANSCRIPT
What do we mean by the voice of the market?
• The marketplace includes immediate customers as well as competitors, the customers of competitors, potential competitors, and potential customers.
• Customers can be good source of information about competitors, the data should include the strengths and weaknesses, by understanding the competitors we begin to understand the marketplace.
What do we mean by the voice of the market?
• Customer’s data may be useful for targeting weaknesses, improving products and services, and improve the performance of suppliers.
Strategic Quality Planning ModelCompany Mission
Strategic Plan
Competitive forces Strategic Quality Plan customer needs
Gaining insight through benchmarking
• A benchmark is an organization recognized for its exemplary operational performance (best practices).
• Examples: Toyota for process, Intel for design, Scandinavian airlines for service, and Honda for rapid product development.
• Benchmarking is the sharing of information between companies so that both can improve.
Benchmarking
• There are two parties to each benchmarking relationship:1. initiator firm: initiates contact and studies another firm .
2. Target firm(benchmarking partner): is the firm being studied ,and enters into a reciprocal agreement to observe the initiator firm.
3.Types of benchmarking: process, financial, performance, product, strategic, functional.
Process banchmarking
• The initiator firm focuses its observation and investigation on business processes, including: process flows, operating systems, process technologies, the operations of target firm or department.
Financial benchmarking
• To perform financial analysis and to compare the results with the overall competitiveness.
• The interaction will be between the initiator and a third party that gathers this information.
• EX: the internet.
Performance benchmarking Product benchmarking
• Allows initiator firms to assess their competitive position by comparing product and services with those of target firms.
• Performance issues include: cost structures, productivity performance, speed of concept to market ,quality measures.
• When designing new product or upgrade to current products, including: reverse engineering, or dismantling competitor’s products to understand the strengths and weaknesses of their design, and develop new ideas for product and service design.
Strategic benchmarking functional benchmarking
• Involves observing how others compete.
• firms go outside their own industries to learn lessons from companies and organization in different industries
• This involves target firms that have won prestigious honors such as: Malcolm baldridge award, Shingo prize, the Deming prize.
• Where a company focuses its benchmarking efforts on a single function to improve the operation of this function.
• Ex: purchasing managers , marketing department, human resource function, and others in many organization.
Benchmarking purposes and quality maturity
Best in
the
world
National
leadershipBest in
class
Beating
industry
standards
Best
in firm
Borrowin
g ideas
Learning
from
successes
Quality
maturity
Commonly Benchmarked Performance Measures
• The measures a firm chooses depend on the key business factors(KBFs).
• KBFs: are factors related to the business success of the firm,
• Ex: if customer satisfaction might be related to market share, then a company would be very interested in tracking its customer satisfaction.
Benchmarked performance measures:
Financial ratio:
such as return on assets (ROA) or
return on investments (ROI), which are
the easiest to obtain and compare.
All is needed is an income statement
and a balance sheet.
Operating Results:
are important for monitoring and
tracking the effectiveness of a company.
Might include cycle times, waste
reduction measures, value-added
measures, and lead time, setup time.
Productivity ratios:
is measuring the extent to which a firm
effectively uses scarce resources.
Human resources measures:
provide important insights into how
effectively the business is being run.
Employee satisfaction is significantly
related to business performance in
many firms.
Customer-Related Results:
Include customer satisfaction and
comparisons of customer satisfaction
relative to competitors.
•Good indicator of financial
performance.
Quality measures:
include conformance-based quality
information such as reject rates,
capability and performance information,
scrap and rework measures, percentage
of defectives, field repairs, costs of
quality.
Benchmarked performance measures:
Market share data:
are an essential indicator of business
success. Market share does not
encompass only a single measure,
because markets are segmented ,market
share includes shares in the different
markets served by the firm.
Structural measures:
include objectives, policies , and
procedures followed by a firm. They include
also safety, production, accounting,
financial, engineering.
Why collect all these measures?
• Management by fact: lead to that decisions are made based on the sound collection and analysis of data.
• Performance measures or indicators are measurable characteristics of products, services, processes, operations the company uses to track and improve performance.
Why collect all these measures?
• The measures should be selected to best represent the factors that lead to improved customer, operational and financial performance.
• Measures support goals.
Key measures:the metrics that need to be monitored to measure the
health of the business.
Critical success factors: factors that help to
determine the success of the firm.
InputsConversion
Process OutputAfter-
sales
Processes
Other
Firms
Control Process
Loop
Customer Feedback Loop
Benchmarking Feedback
Process model
Robert camp’s business benchmarking process
• Step 1: Decide what to benchmark.
• Step 2: Identify whom to benchmark.
• Step 3: Plan and conduct the investigation.
• Step 4: Determine the current performance gap.
• Step 5: Project future performance levels.
Robert camp’s business benchmarking process
• Step 6: Communicate benchmark findings and gain acceptance.
• Step 7: Revise performance goals.
• Step 8: Develop action plans.
• Step 9: Implement specific actions and monitor progress.
• Step 10: Recalibrate the benchmarks.
Leading and managing the benchmarking effort
• Benchmarking is a managed process.
• Managing the benchmarking process involves establishing, supporting, sustaining the benchmarking.
• To begin the management process ,a strategy statement outlining the goals and strategies to be used is developed.
• In strategy statement Management sets expectations for performance.
Leading and managing the benchmarking effort
• Other activity for management include training.
• Training is a key to success in all quality management approaches.
• Many of these training courses are available from many different consulting organizations.
Baselining Reengineering
• Baselining: requires the monitoring of key internal firm performance measures over time to identify trends such as improvement to inform managerial decision making.
• Involve identifying measures, time frames, gathering and analyzing data.
• A fundamental rethinking and redesign of business processes. two factors to achieving success through reengineering:
• breadth refers to the impact of the reengineering process to the entire organization.
• Depth refers to organizational elements such as responsibilities , measurements information technology and skills.