Chapter Twenty-Five: Customers – The Raw Product of Profitability

ConPriDigm AvatarQuality IS…the raw product of profitability.

Why is the term “customer” often associated with fours concepts: needs, expectations, requirements, and demands? Why is each concept unique, but often overlap with the others?

 

Conceptual Pattern for Customer

A customer is current or potential buyer or user or of goods or services in a particular way from an individual or other company. A customer is a business organization that has authority to consume or employs a good or service that is founded to produce articles of commerce. A customer is a number of persons united or incorporated for joint action and a specific purpose to obtain a benefit or to solve a problem that may not be the actual purchaser of items that are used for later consumption. ( Pattern Engine: Customer N=12 © 2014)

If customers are understood the meaning of Quality will follow.

First Principle: The purpose of the customer is to drive profitability.

Second Principle: Quality in the twenty-first century must start with the customer, not with the tangible product sold or the work process that create it. 1

Third Principle: Internal improvements have to matter to the customer before they can create improved external quality, customer satisfaction and loyalty. 2  

Fourth Principle: The most cost-effective areas of product and service performance to improve are those that are important to the customers and which, at the same time, the organization is performing poorly. 2

Fifth Principle: Successful organizations deliver value to their customers in one of three categories: operational excellence, customer intimacy, or product leadership. 3

Sixth Principle: A customer’s loyalty grows through seven stages: suspect, prospect, qualified prospect, first-time customer, repeat customer, client, advocate. 3

Key Conceptual Patterns

LOYALTY

Loyalty is unwavering devotion and allegiance that may be intellectual or emotional, to a course of action. It is the use of knowledge that creates a tie and a commitment to some purpose. Loyalty is the manifestation of enthusiasm, admiration and a strong attachment that results from a highly developed ability to think, reason, and understand. It may be implied or expressed in return for support and protection, often characterized by intelligence or mental capacity. (Pattern Engine: Loyalty N=12 © 2014)

LEADERSHIP

Leadership is a goal seeking activity and state of mind that results in doing something well. Leadership is an effective way, when measured against a standard. It favors steady progress and typical behavior while accomplishing a task well, with a particular amount of success. Leadership is often the result of some previous phenomenon that brings about an outcome as a direct result of somebody or something else that makes something happen or exist or is responsible for something that happens.  It is characterized by reliance on one’s self, or one’s circumstances; a feeling of self-sufficiency; a feeling of security; self assurance or a belief in one’s ability to succeed. World class leadership is often in free from anxiety or fear. (Pattern Engine: Leadership N=12 © 2014)

Nest Post: Segmentation – Focusing Customer Needs

 1Karl Albrecht: The Only Thing that Matters, Bringing the Power of the Customer into your Business, 1992.

2 Michael D. Johnston & Anders Gustafson: Improving Customer Satisfaction, Loyalty, and Profit, 2000.

3Jill Griffin:  Customer Loyalty, How to Earn It How to Keep It, 2002.

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Chapter Nineteen: Capability – The Indicator of Quality Performance or Not

ConPriDigm AvatarQuality IS…conformance to requirements, but is not free.

Why is poor process capability equivalent to Russian roulette when it comes to customer satisfaction?

 

 

Conceptual Pattern for Capability

Capability is the total range of inherent variations in a stable process that is susceptible to a particular treatment expressed as potential ability. It is a sustained phenomenon resulting in an action to do something well. Capability is a series of actions directed toward a specific aim intended to achieve a result manifested in an effective way when measured against a standard that favors steady progress and typical behavior while accomplishing a task well with a particular amount of success and results in a particular way something is handled or managed. (Pattern Engine – Capability N=12 © 2014)

If capability is understood then the meaning of Quality will follow.

First Principle: The purpose of process capability is to demonstrate compliance with customer needs.

Second Principle: If a process is predictable and stable then its capability will be predictable. 1

Third Principle: Once the location of a process output has been described and the dispersion of the process output has been measured it is possible to make useful         comparisons between the Voice of the Process and the Voice of the Customer. 1

Fourth Principle: Capability can be expressed in ratios that compare the Voice of the Process with the Voice of the Customer or they can be simply expressed as the percent of the product that is exceeding specification limits.1

Fifth Principle: A measurable process characteristic is considered capable if one-  hundred percent of the data values fall within the specification limits.1

Sixth Principle: A simple estimate of the fraction of nonconforming product for a stable process can be obtained from a histogram of the measurements by dividing the number of nonconforming measurements by the total number of measurements in the histogram. 1  

Key Conceptual Patterns

CUSTOMER

A customer is current or potential buyer or user or of goods or services in a particular way from an individual or organization. A customer is a business organization that has authority to consume or employs a good or service that is founded to produce articles of commerce. A customer is a number of persons united or incorporated for joint action and a specific purpose to obtain a benefit or to solve a problem that may not be the actual purchaser of items that are used for later consumption. (Pattern Engine – Customer N=12 © 2014)

SPECIFICATION

A detailed description of design criteria providing an exact measurement or detailed plan needed to make, build, or produce something. It is a detailed written statement regarding a standard point of reference. A specification represents something in words regarding certain or salient aspects, characteristics, or features of a subject matter or something seen, heard, or otherwise experienced or known. It is used in making a decision or judgment against which others can be evaluated against and intended future course of action aimed at a method for achieving specific objectives within a timeframe.(Pattern Engine – Specification N=12 © 2014)

Next Post: Algorithms: Effective and efficient use of metrics and indicators.

1 Donald Wheeler, Advanced Topics in Statistical Process Control, 1995

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