Meeting customer needs cost money?

While providing a service or product in many circumstances involves spending and require investment, meeting expectations which customers do not value will certainly cost much more to the company. It is sensible and most company executives think that way but the reality is far from it. In many circumstances, these executives will disregard the impact on customer experience and whether the expectations are met and will primarily and entirely focus on their internal process and conveniently ignore about the rest. Are they right in doing so?

On regular basis, we send our product collaterals to retailers and the content changes with new information for example with a new promotion or new product lines. It puzzled us when we received queries on past promotions (2 years ago) and complaints from our retailers. I was tasked to look into it.

The marketing team was coming out with new collaterals every quarter but the distribution unit had in their inventory collaterals of at least 1 year old. Besides the lack of synchronisation between marketing and distribution unit, the latter was doing bulk order to reduce printing costs.

I probed into the reasons. Their answer: they were sending older collaterals to run out their stock as they consider it as a waste and in their words "they have a lot to spare". Even when we brought the issue that it would cost much more sending collaterals with outdated information. This has led to customer complaints and has impacted our brand negatively. Their reply was to meet customers expectations cost money and we would have to pay a lot to destroy the stock!

There was a deadlock as they were not willing to spend a single dollar. I mapped the value stream of the processes and requested for the actual cost for destruction. Only after a few weeks of debates and push back, they came back to us that it would be free. I was puzzled by the inaction of the team to meet customer expectation and really took a few minutes to fix the broken process and established proper linkages and removed "waste" from value chain.

Luckily, we intervened on time because distribution unit would not have been able to run out their old stock at all as there was a disconnect in terms of the frequency of printing marketing collaterals and distributing them to our retailers. The issue was "obvious" and amazingly they decided to ignore it as they focused only on their internal processes to reduce costs but did not think of the big picture where it would cost even more to the organisation.

We have fixed the straight forward issue, and we have not seen this type of complaints from our customers. In the meanwhile, that's a couple of thousands of dollars saved per week.

What for? How does it Matter?

I was chatting with a friend of mine who was in a senior leadership position.   He wanted to implement a relocation strategy and he mentioned that based on his intuition all the processes should move into a particular country.

As a Six Sigma professional, I asked him whether he knew why the processes where they were today.  His answer: What for?  How does it matter?

I was taken aback and puzzled by the question and I remained speechless.  Not because I did not know but the questions were bizarre.  

I kept quiet and looked around.  And suddenly I started having a headache.

My first reaction was to go back to what I did in the past.  Did I eat?  Did I have too many drinks last night? Did I sleep well last night?

Then, I thought that I only caught 2 hours of sleep.  And I decided that I should head home for a nap and my headache would subside (if that was the cause).

This thought process is present in every aspects of our life.  And I would even go on to say that it is fundamental to our knowledge and our learning and to progress in technology and mankind.   Imagine a world where we are cut off from the past experience or we do not understand our past and do not learn from our mistakes. 

In fact, we are what we are today because of our past.  And failure to understand the past will not help us understand who we are today.  Fair enough, knowing the past is not crystal ball gazing for our future for sure, but equips ourselves well with tools to ensure that we do not repeat the same mistakes – And why we say learning from mistakes?   And practice makes perfect?

And knowing the past is fundamental in Six Sigma discipline.  As a Six Sigma professional, I would look at control charts, identifying special and common causes, which then would lead me to determine the type of actions/solutions to be adopted to address the issues.  And how about the 5-whys?  And I can name a whole list of tools which look at the past and synthesize with the trends to identify potential impact to our solutions.

I kept quiet and I wished my friend good luck.  The last I heard, the project is not taking a good shape.  People are demoralised; there are no clear directions; costs have escalated and what happened to be one country solution is looking at many country solutions with the deadline fast approaching.