The business world has experienced tremendous waves of change in the last 50 years. Like the ocean surfers, a few companies catch the wave early, paddle harder and stay ahead of the competition while the vast majority wait for the wave to peak.
Total Quality Management (TQM)
Originating from Japan in the late 60s the wave of Total Quality Management broke onto the shores of the american continent in the 70s and 80s. While no one denied that the Taylor system worked at the beginning of the century and achieved spectacular improvements in productivity, it was time for a change.
TQM put the customer satisfaction first and involved all employees in the continuous improvement process. Quality management was finally fully integrated into the organisation.
In 1985 as a young manager I quickly learned how to run a quality circle and set up a suggestion box. “Right First Time” a book from Frank Price opened my eyes on statistical tools to control my processes. Then in the early 90s “ISO 9002” or “ISO 9001” banners started to pop up in company lobbies or above front doors. The new quality standards were driving the adoption of this revolutionary quality culture to the vast majority. I signed up for a course, the company hired a consultant and in 1992 we were certified.
Lean Manufacturing
The next big wave was Lean Manufacturing or how to improve efficiency by eliminating wastes. Lean came from the Toyota Production System. Yes, another wave from Japan.
Lean is actually a set of tools and techniques such as JIT (Just in Time), 5S (Organization method), SMED (Single Minute Exchange Die), Kaizen (Continuous improvement) or Poka Yoke (foolproof).
Lean Six Sigma which came around the same time and was embraced by Jack Welsh at GE added the Variation Reduction into the lean principles. The main theme of Lean is efficiency improvement and as opposed to Total Quality Management that reoriented the focus towards the customer, Lean is a tool to increase shareholder value.
Ironically for me my journey toward Lean started with Eliyahu M. Goldratt, an Israeli business guru who introduced me to the theory of constraints in his book “The Goal”. In manufacturing the constraints are the bottlenecks that create big piles of work in front of working stations (waste). To produce and deliver on time (JIT) the goal is to address bottlenecks and reduce inventories.
5S was also a game changer in my career. Until learning about the 5S methodology I was a fervent admirer of the Japanese cleanliness but I could not grasp the benefits in terms of productivity improvement even though 5S has shown to be a powerful tool to rally workers around a common goal. Recently I led the physical relocation of Central Midori from an old industrial building to a brand new property. The new plant was set up as a perfect 5S example, clean, orderly, organized and the productivity jumped by close to 10 points.
Customer Experience
Today in the digital age customers have a greater number of options than ever before. They can choose among a variety of competitive products and services without compromising quality.
In 1997 Jeff Bezos in his Letter to shareholders admitted being “obsessed over customers” and was saying that “word of mouth remains the most powerful customer acquisition tool”. Amazon has since been the leader in customer experience for good reasons.
The american wave of Customer Experience is rising and will soon engulf those who do not want to see it. We all have examples of memorable customer experiences, some good, some bad. One good that comes to my mind is when I received my new Garmin watch, opened the box and realized that I selected the wrong model. The process of returning it could not have been more effortless with an instant credit on my account, a return label to print and a pickup scheduled for the following day.
B2B is catching up quickly. ULine is one of these terrific companies that pick up the phone immediately, no waiting, no answering machines with millions of options…The customer service agent calls you by your first name after she/he recognizes your phone number, the tone is cheerful whatever the time of the day and once you finalize your choice they will offer a free sample to be shipped overnight.
Today we don’t see banners above the front door to tell you that the company is “customer friendly certified” but a more powerful tool is available: “online review”
According to a recent survey 90% of consumers used the internet to find a local business in the last year and only 53% of people would consider using a business with less than 4 stars..
At Central Midori
In 2014 we partnered with the Singapore Manufacturing Federation (SMF) to train our top and middle management in Gemba Kaizen and Lean Six Sigma. The reduction of wastes is now ingrained in our culture including new metrics that are carefully monitored.
5S methodology has guided us to design our new facility with cleanliness as a top priority.
Quality has always been an important differentiator for Central Midori and we recently got certified ISO13485 for the production of Medical devices which is even more stringent than our ISO9001.
Although we still have a long way to go to delivering a memorable customer experience, we are actively working on it. Unlike the TQM and Lean approaches it requires more efforts from management as the responsibilities are more diffuse.