Daily Archives: August 7, 2009

Earn Your Customer’s Loyalty … And Maybe You’ll Keep Them

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Customer acquisition is an investment, but customer retention delivers profitability, so you should do what you can to keep your current customers, as per a recent article on how to earn your customers’ loyalty in CRM News.

The article delivered seven strategies to keep your customers loyal which is worth a review, especially if you are a supply chain department whose survival depends on keeping your internal customers happy.

  • Provide Stellar Customer Service
    It’s a key differentiator in the retail world and in the boardroom.
  • Make your Web Site a Customer Self-Service Center
    And open your applications up to the company, at least for status reporting.
  • Use e-mail to communicate with customers.
    It’s great for keeping them up to date.
  • Pick Up the Phone
    Call your customers regularly to see how they are doing or if they need anything.
  • Solicit Customer Feedback
    Listen, and Respond. Customers want to feel valued.
  • Reward Customer Retention
    Share the success. There’ll be enough to go around.
  • Establish Customer-Friendly Policies.
    Your job is to get them what they need at the best price.

What Metrics Should Your Manufacturing Organization Be Using?

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In The Metrics-Driven Organization from Exact Software, the authors reprint a table from AMR from 2007 that listed the top 19 manufacturing metrics in use today, with 13 used by over 50% of organizations. Metrics are important, because you really can’t manage what you can’t measure, but you need to have the right metrics, and the right number of metrics to achieve success.

The top 13 metrics are:

  • inventory levels
  • fixed manufacturing costs
  • average cycle times
  • scrap and rework
  • variable manufacturing costs
  • profitability of products
  • raw material quality
  • finished goods quality
  • demand / demand variance
  • manufacturing line-schedule visibility
  • transportation/logistics schedules and costs
  • manufacturing line capacity visibility
  • KPIs / performance of key production assets

But which are the right ones for you?

The article notes that you need to focus on metrics that drive productivity, metrics that are demand-driven, and metrics that can be automated with technology. In addition, it’s also important to focus on metrics that impact the perfect order, metrics that impact sustainability, and metrics that impact working capital.

I’d recommend the following five from the above list:

  • inventory levels (working capital)
  • average cycle times (productivity)
  • profitability of products (sustainability)
  • demand / demand variance (demand driven)
  • KPIs / performance of key production assets (automated)

Plus these two metrics from AMR’s list that are only used by 48% and 35% of organizations, respectively:

  • supplier on-time delivery (perfect order)
  • variability of cycle times (productivity, perfect order, sustainability, & working capital)