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Converting Customer Requirements into Measurements
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As a working example, the goal of this project is to establish key performance measures and to develop supporting programs to improve customer service and satisfaction levels The results of this effort will directly impact the strategic and business plan objectives regarding increases in market share, customer retention, and operating income The end results will also help to create and maintain a competitive advantage in the marketplace
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Manager s Guide to Business Planning
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The process of converting the voice of the customer (VOC) into deployable measurements is outlined below and will be illustrated with a concrete example that will serve as a baseline for creating other measurements
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Future Needs
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Voice of the Customer
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Strategy
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Measurements
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Present Requirements
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Customer Feedback
How the VOC Process Will Produce Improvements
The process will ensure that your products and services consistently meet and exceed the customer requirements if it s implemented in the following manner Obtain feedback from the customer to gain valuable input on present requirements and future needs This should be accomplished by short, concise surveys done either online or via mail In certain situations, faceto-face focus groups may be more advantageous Analyze the feedback, and based on the requirements that customers rate as important, review your current measurements to see if there s a match for the requirement For example, the question of responsiveness of the company representatives to resolve issues receives high importance ratings If you don t have an accurate method of measuring this,
CONVERSION TABLE
I I I
Customer Requirement: Responsiveness Attributes: Order fill rate, cycle time, on-time delivery Performance Standard: 100% of fill rate, five days turnaround, TOOLS within two hours Measurements: Actual versus goals in percent achieved Process: Flowchart all activities that impact performance and identify process improvements, eg, forecast accuracy, sales input accuracy, inventory planning, etc
Measuring Performance
you ll want to create a more precise measurement An example of this conversion is shown in the table on page 52
Linking Planning and Budgets
The last step in completing the functional plan is to prepare the annual budget estimate for review and approval by the finance team This will ensure that the company total budget will meet the revenue and profitability targets specified in the business plan
Bringing the Planning Data Forward
The annual budget estimate will be composed of the total expenses required to meet the functional mission, key results areas, and major objectives (maintenance, improvement, and other) The expenses will include labor and administrative costs
Labor Expenses Management Salaried Hourly Subtotals Total Labor Operating Expenses Supplies and Equipment (noncapital) Outside Services Other Expenses Total Expenses Total Annual Expenses
Base Salary ___________ ___________ ___________
Benefits ___________ ___________ ___________
Amount ___________ ___________ ___________
Aligning Priorities
One of the most important skills of managers working in a resource-lean environment is to be able to align priorities to ensure they re working on the right priorities at any given time It s inevitable that unplanned
Manager s Guide to Business Planning
NEW ROLE OF THE FUNCTIONAL MANAGER
The role of the traditional functional manager has shifted from FOR the basic responsibilities of scheduling and controlling to one of EXAMPLE leadership In this new role, the functional manager is responsible for hiring the right people and creating a work climate in which employees want to produce results, not have toThe new role involves the ability to remove obstacles that block productivity and develop employees so they continuously learn new techniques to apply to day-to-day problem solving
priorities will come up, so the challenge is how to sort out what s most important to the business and customers Three skills are directly linked to success in this area:
Priority Setting These individuals are able to quickly zero in on the mission-critical priorities by assessing where the lower-value priorities really are They can eliminate roadblocks that hurt productivity and can sense what s helping or hindering progress immediately They spend time thinking about these priorities every day Action-Oriented These individuals create energy and action for everyone they work with They can take calculated risks and have a high success rate They are comfortable with their actions and rarely reverse direction Timely Decision Making These individuals are able to make swift, unbiased decisions and meet or exceed deadlines in every situation under their control They can act within all information others may need to initiative decisive actions
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