Back in the late 1990’s, I was teaching an Introduction to Supply Chain Management course at the Malvern, PA manufacturing facility of the Invisible Fence Company. Throughout the course, we kept coming back to fundamental objectives found throughout the material. Those objectives, and the discussions about them which occurred during that course, ended up on a whiteboard in the form of the following model. The model became known as “The Triad” after its triangular shape.
We recently introduced that model, which was designed to logically connect strategic, but often conflicting, initiatives within the operations of a business organization for the sake of generating value. The objectives of The Triad represent the fundamental objectives of a Manufacturing Control System (MCS).
As a reminder, the overall goal of a successful MCS is:
“Simultaneous improvement in all areas for the purpose of generating stakeholder value (as opposed to localized improvements in one without concern for the others).”
The objectives of The Triad represent the fundamental objectives of a Manufacturing Control System (MCS), and connects the following parts: Customer Service, Inventory, Productivity, Cost, and Quality and Accuracy.
Surrounding these areas is the Management Culture of the organization. This topic wouldn’t be complete if we didn’t at least mention how the culture influences these results. How the objectives are determined, managed and achieved is affected by the management culture of the organization. Different cultures will place different emphasis on these areas. We will now examine each of the components and state its objective, starting with Customer Service and continuing in future posts
"The purpose of the model is to logically connect strategic, but often conflicting, initiatives within the operations of a business organization for the sake of generating value.
Customer service is about the fulfillment of promises to customers, which is typically measured as performance around a completion date. In the case of a Sales organization, that may be the promised ship date. How well does the organization as a whole meet the promises it makes to the market? APICS, the Society for Operations Management, defines Customer Service as:
1) the ability of a company to address the needs, inquiries, and requests from customers.
2) A measure of delivery of a product to the customer at the time the customer specified.”
Generally, the better the customer service, the higher the satisfaction level of the customer. Most
businesses therefore have the goal to maximize this service level because it increases value for the customer.
There are various methods for increasing Customer Service. One of the easiest ways is to make sure you understand the conditions of satisfaction found within any customer request and to deliver what you have promised to meet those conditions. Other more operational methods of increasing Customer Service include:
- Shortening horizons of time (i.e., decrease lead-time) for product and/or service delivery to your customers.
- Increasing flexibility (i.e., broaden product mix and volume).
- Increasing customer coordination (i.e., act in shared concerns with your customers).
I typically show the Customer Service objective as the base of the triangle because in a way it supports the other objectives. Without good Customer Service, meeting the other objectives may matter a lot less. You may argue that without good Customer Service, you will not survive. Customer Service is therefore said to “look outward” towards the market.
One method of increasing Customer Service is to increase the levels of inventory. More inventory on hand in the right place means less lead-time for delivery and higher overall service levels. Sales people love to have stuff in stock! Another way is to have more pickers and packers than needed. This means that each order will wait less time prior to shipping making order fulfillment very efficient.
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