Factfile 42
New approaches to alignment
The Business Excellence Model, which has been around since 1988, attributes 20% of business success to understanding customer results, 10% on leadership and 8% on policy and strategy.
Also, the new quality standard ISO 9000:2000 requires that:
??top management shall ensure that:
-
customer requirements are fully understood and met;
-
customer needs and expectations are determined; and
-
converted into requirements with the aim of achieving customer confidence.?
New ways are needed to help all parties in the supply chain to understand the ultimate end-users expectations.
Secondly, that there has to be a better way of measuring the degree of alignment in the supply chain.
Discussions between Leading Edge Management Consultancy and Mott MacDonald with BAA's T5 team in 2001 led directly to the development of KPI-online as a customer alignment tool.
This is a flexible Web-based means for supply chain members to evaluate their expectations and perceptions of each other?s performances, starting top down from the ultimate client.
These are measured against customer satisfaction and business excellence criteria. (See Parasuraman, Zeithaml & Berry, Journal of Marketing Vol 49 1985 and European Foundation for Quality Management.)
It has been designed to work in a variety of scenarios from multi-billion projects, to a supplier with many clients, or even a supplier serving many locations for the same client on a long-term contract.
The benefits are:
-
Clients want their contractors to understand what their expectations are and for their contractors to understand if there are any perceived gaps in their performance. A better performance means better value from the contract and more business for the contractor.
-
Contractors want their clients to understand how they can contribute to a contract?s success and where improvements are possible. A better performance from the client will help them both.
-
Contractors want their suppliers to understand what their expectations are and for their suppliers to understand if there are any perceived gaps in their performance. A better performance from suppliers means the contractor will be more successful and that means more business for them both in the future.
-
A supply chain member wants to compare its performance with other supply chain members at the same level on the same (large) project. This benchmark helps to establish whether its performance is in-line with the average that the client is seeing. This establishes what improvements are needed to achieve more business.
These benefits provide the motivation for project participants to complete the questionnaire. KPI-online delivers an instant report every time a questionnaire is completed and regular management trend reports.
Implementation of alignment is likely to be predominantly led by the ultimate commissioning customer in complex supply chain situations, because they seek to gain most from the value released. But experience shows that it can also be supplier-led, depending on circumstances.
See: Aligning marketing strategy with supply partners and sales channels at BT.
CIM are currently seeking contributions in the area of alignment of marketing activity and sales effort. Help shape best practice by submitting your articles, research case studies and marketing tools to this canon project. In the first instance, email: editor@cim.co.uk. Please use the title: M2B ? Alignment. All work submitted will be protected by copyright, retained by the author.