Insights on Excellence | "Insights on Excellence" Archive

How to win over customers: Give them what they want

by Stephen Hawley Martin
for Virginia Business
February 6, 2007

Henry Ford once said, "The customer can have any color [car] he wants so long as it's black."

No wonder the color black and Ford automobiles were associated with one another by the mid 1920s. Imagine how much time, effort and expense Ford Motor Co. saved for more than 20 years by offering its product only in black. Wouldn't it be nice if, as a manufacturer, you could economize in this way? But the truth is, those days are gone - long gone.

Eventually, Ford had to change because the pressure from the competition was just too great. Then as now, people wanted a number of colors to choose from.

Human nature hasn't changed. The company most likely to win in today's competitive environment is one that will offer a product in just about any color or configuration and deliver it exactly when the customer wants. And this expectation isn't limited to automobiles. We have come to believe that the any product we buy should work right the first time and keep on working almost indefinitely. In addition, we expect every product to incorporate the latest technology. Before we decide to buy it, we will of course be sure it has all the features we plan to use. Yet, if a product offers features we don't feel we will need, and costs more because of it, we will keep searching until we find a product that gives us precisely what we want. In addition, when it comes to availability, who nowadays would be willing to wait even a few weeks for delivery? And last but not least, the price should be the lowest in the marketplace.

This scenario presents a challenge to manufacturers. In the past, these demands would have been met by building different versions of a product and holding them in inventory. Then the desired configuration would be ready to go whenever a customer ordered that particular combination of features.

Today, that's not a practical solution. Inventory costs money, becomes outdated quickly and often has to be sold at a loss if it gets sold at all.

But suppose you could meet customer demands without increasing inventory. The idea is not far fetched. In fact, it has been put into practice in many industries. Many companies have been able to do this by instituting continuous-flow, just-in-time manufacturing, also known as the Toyota Production System or lean manufacturing.

But what if the products your company makes are complex? Don't they present a totally different can of worms?

Not really. Just-in-time production is a key aspect of a lean producer whether its products are simple or complicated. Likewise, continuous flow is an important aspect of this process in a repetitive environment as well as one in which the product is built to order. In a build-to-order situation, the manufacturer identifies potential bottlenecks created by the mix of products made in a period of time. The manufacturer then schedules the production sequence to minimize these bottlenecks. Often, anticipated bottlenecks can be scheduled to offset one another. Also, alternate routing though the various workstations can be mapped out so that products continue flowing. Side tracks may even be set up so that a less complex product can pass by others requiring more steps.

This new method creates a need to schedule work flow very precisely. No longer are individual supervisors responsible for scheduling in such a setup. The responsibility is handled by a daily scheduler. This employee is able to view the entire production schedule and use sophisticated software to determine the best possible sequence for maximum flow and minimum downtime.

A new book due out soon from Oaklea Press called "Build to Order: Lean Manufacturing in Complex and Variable Environments" by international consultant Jorge Larco and his associates explains how products that range from houses to airplanes to ship engines, oil rigs, HVAC systems and automobiles can be made in a way that keeps products flowing and money dropping to the bottom line.

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Stephen Hawley Martin is a former principal of The Martin Agency in Richmond and the author of more than half a dozen books including his newest, Lean Enterprise Leader: How to Get Things Done Without Doing It All Yourself. He is editor and publisher of The Oaklea Press, a book publishing business dedicated primarily to helping business executives increase productivity.