Art Work: Dr. Murad Abel |
Just like Americans went through a
shift in their manufacturing management toward Japanese models in the past they
are now moving toward new customer service oriented values. They are seeking to
tie their products more closely to the needs of the customer and this requires
a new way of thinking. As the system changes, so will the measurements of
success and the accounting of financial revenues.
Metrics are important markers that
help guide strategic decisions. The previous product-based performance
measurement systems are inadequate to understand the service dynamic.
Organizations are seeking to update their measurement mix in order to create
higher levels of relevant data used to guide the organization to higher levels
of performance.
Companies often rely on a few
measurements and try to replicate them in other places, other nations, and at
different times. Because measurements are supposed to give one the ability to
take a snap shot of what’s going on in the market a single measurement skews
this the accuracy of this picture. It is beneficial to ensure that measurements
are chosen for their well-rounded image so trends and changes can be discerned.
The researches completed a three-year
case study of Atlas
Copco a multinational equipment manufacturer to come to their conclusions. They looked at both qualitative and
quantitative data to understand their measurement systems. They have a presence in 100 companies and
14,000 employees that makes them adequate for a global case study.
They
found that moving services from a support function role to a revenue stream helps
encourage better decisions. Conflicts
between production and service should rectify by developing and catering new
performance measurements that can bridge the gap. Companies should seek both
breadth and depth in their customer service penetration. Capitalizing on the new service oriented
dynamics makes companies more responsive to market trends and raises their
potential revenue generation.
The
report does provide some information on bringing forward concepts as they
relate to changing the perception of customer-oriented processes within
manufacturing. Having the right data metrics is important for analyzing and making
strategic decisions. Implementing service components into the manufacturing
processes takes some time, as it is a new way of thinking. As the
implementation process continues, the mindset of employees and decision-makers
will change with it.
“The
relationship with the customer tells us every day how well we perform and, for
sure, keeps us alert to all the changes in the market.”—Ronnie Leten, CEO
Atlas Copco Group
Visnjic, K., et. al (2013). Steering
manufacturing firms towards service business model innovation. California Management Review, 56 (1).
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