Customer service is the key buzzword for corporations, and deservedly so. Customer demand drives what we produce and when we produce it, and it therefore drives profits. It also drives value.

During the late 1980s, when IBM introduced Total Quality Management — which includes the six sigma quality process improvement approach — they defined customer broadly to include one’s bosses, colleagues, and suppliers, as well as external product users. IBM began to require that its suppliers implement TQM.

What Did IBM Know?

Quality Digest asserts, “quality professionals haven’t forgotten what customers want, but the quality community has never fully realized the best approach for recognizing customers: defining value, delivering it and maintaining accountability for those goals.”

The Role of Defining Value in Supply Chain Management

Why do you go back to the same store, the same car manufacturer, or the same appliance brand? Value. People who shop at Nordstrom return again and again for the exemplary customer service they receive, regardless of the department, product, or store location. Asked how they manage to get all their retail staff to offer exemplary customer service, a Nordstrom manager replied that they look for friendly, nice people and then train them on selling clothing. Nordstrom’s management defined value as the interaction between the external customer and the retail staff.

IBM’s value system includes offering external customers machines with few to no defects at competitive prices. That leads to requiring their suppliers to offer parts for IBM machines with few to no defects at competitive prices as well. In other words, IBM chooses to work with suppliers whose customer values mirror their own customer values.

Quality Digest notes that, “Within the supply chain, quality professionals must ensure adherence to processes, compliance to requirements based on the customer’s definition of value, elimination of nonvalue-adding activities, and documentation for consistency of purpose and practice.” Stay lean and implement six sigma approaches based on their customer’s definition of quality. Quality Digest adds that to achieve this outcome, we need to understand, in detail, “what maximizes value for our companies.”

What maximizes value always includes every process in the supply chain. It simply is not enough to design a great car; we need to insure that all its parts have few to no defects and were made at a competitive cost, that the marketing department delivers a great product campaign, and that the sales force’s interface with the external customer is exemplary. So it goes with every product or service.

Lean Six Sigma is a powerful approach that applies specific tools to improve quality, productivity, profitability, market share, and cost competitiveness – whether you are a supplier or the brand company.

Consider referring your supplier to us to better manage your supply chain and your customer service.

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