Process refinement:Company activities have shifted away from producing predefined products or services towards having the capability to produce creative solutions for customer requirements
Company activities have shifted away from producing predefined products or services towards having the capability to produce creative solutions for customer requirements. Companies must be flexible, not just to raise customer satisfaction, but to avoid waste and loss. The symptoms and challenges in refining the process are listed in Table 1.2.
The prerequisite for process redesign is access to information across organizational boundaries. Without that exchange of information, no streamlining can be achieved. Buyer–seller partners are increasingly sharing common databases. The obvious example is stock manage- ment. If point of sale data is transferred to commonly held databases of stock information, the suppliers of logistics services and goods can
Table 1.1 Responding to rapid change
Symptoms Challenge
Compressed time horizons Ability to exploit markets more rapidly
Time-based competition Process excellence and flexibility
Shorter product lifecycles More effective new product development
Shorter technology lifecycles More investment in skills and understanding of applications and technology
Transient customer preferences Flexibility in approach to markets, accuracy in demand forecasting, and optimization in price setting
Increasingly diverse business area Cultural sensitivity
Lean supply practice also lends itself to sharing some costs critical to mutual success.
Companies must be flexible, not just to raise customer satisfaction but to avoid waste and loss.
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make sure that retail outlets are always fully stocked with the fastest moving lines. That enables everybody to make more money through the consumers obtaining what they want when they want it. Buyers and sellers also need to examine their current activities together in order to explore and optimize processes.
The output of process redesign (or re-engineering) should be enhanced customer value. Customers want quality through attention to detail. Any customer wanting to initiate new quality indicators with a sup- plier is more likely to do so if there is a strong element of trust and partnership. The closeness of customer relationships can be greatly enhanced through collaboration, both across and between organiza- tions. Joint planning initiatives and coordinated working practices can be used to create mutual understanding, benefit and commitment.
Our way of depicting how organizations receive goods and services, add value and sell them into their end-user markets is Professor Michael Porter’s value chain. Figure 1.1 depicts the standard Porter value chain model for a manufacturing organization and Figure 1.2 depicts a value chain for a service organization.
Within these models, companies will have functional specialists work- ing together, ensuring a consistent and integrated approach to the development of value.