Price with a meaning..

31 Saturday Jan 2015

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CEPQ, customer experienced product quality, Price with a meaning

When talking about the price of a service or product we all know the maxim ‘you get what you pay for’. Of course there is no reality to this! No matter how low the price, if it doesn’t do what it says on the tin or is actually very poor doing it, then its expensive!!

When I worked for IKEA the big statement when designing, sourcing, working with factories and communicating with customers was ‘low price with a meaning‘. Just to have a cheap product with poor functionality, design, quality and ethically unsound has no meaning!! Everything has to have a value no matter the price.

How can organisations achieve low price with a meaning? As with all things it requires the virtuous circle of the following:

The Price: Achieving a low price requires a concentration on high volume, with a high degree of industrialisation to secure the most efficient production process. Raw materials are secured in terms of sourcing, specification, availability and all within a transparent supply chain..

Supply Chain Agility: A forecast and order planning system that shrinks the distance between the point of sales and the factory. Regular shipments with stock having a status of evil! Implementing a supplier matrix set up of 70-30. Split the sourcing between two factories, securing high production utilisation at the 70% factory and the rest as a security back up at a newer supplier being developed for future business.

Secure Product Quality: Please see my previous article CEPQ – Customer Experienced Product Quality

Socially and Environmentally Assured: Secure the following basics:

Transparent and well supervised supply base including sub suppliers and contractors to the direct vendor factories.
Secure legal, clean and efficient factory supply.
Well managed labour in the supply chain – no child labour, no excessive hours etc..
A legal and well paid workforce securing an efficient and motivated factory.

The Product Design: See my previous LinkedIn article Democratic Design..

Everything that is made and supplied must have a meaning. It should be part of a company’s intrinsic value whether they are in the low volume/high price or the mass volume competitive market. Its all part of Good Business Growth…

Whatever the market, products have to be competitive, design and quality assured, produced and supplied by companies that care! As Apple Inc and IKEA have proven; customers buy why and not always the what !!

Quality is defined by customer experience..

13 Tuesday Jan 2015

Posted by mkastley in RVA Updates

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CEPQ, customer experienced product quality, Quality Drivers, Robert Vernon Associates, RVA

When boiling down to the main parameters for a business to succeed, it has to secure the following; competitiveness, availability, sustainability, good product design and quality. This means a customer offer that provides a well designed, competitively priced product on the store/warehouse shelves, supplied by a company that cares about society and the environment. And of course great product quality?

How can a company move quality further into the business, engaging all operations and not just the Technicians and Quality Managers. Quality is an essential part of good business growth..

Over the last 30 years there have been many quality improvement programmes and concepts developed and implemented. This has seen the use of science/maths equations, black/green/yellow belts and manuals full of procedures and directives. These improvement programmes have made great strides in improving service and product quality. However, they have been and are essentially the tools for quality technicians and managers.

As a business driver Quality needs to be concise and standardised for a more holistic understanding and participation by everybody. This starts with understanding the customer, it is only their experience of a product/service quality that determines success or failure. The best approach to customer quality I have worked with are the following 4 definitions of Customer Experienced Product Quality – CEPQ:

Durability and Function: What is the performance of the material and components to secure that the product does ‘what it says on the tin’.
Safe to Use: What shall be the product’s chemical and substance content. What is the security of small and loose parts.
Well Designed Product: Clear design briefs and specifications. If the product is part of a range, is it modular e.g. correct dimensions, consistent and true colour/shades.
Customer Friendly: What is the after use appearance, are the buttons, switches etc convenient. Is the packaging sufficient and recyclable. Assembly and installation is easy for the customer.

Using the above 4 CEPQ headings, a company can devise their own points to secure according to their customer’s profile, operational and product range requirements. Once devised, these CEPQ points are then used as integral inputs for design/development, manufacturing and quality assurance management.

Irrespective of which Quality management systems a company employs i.e. ISO 9000, Six Sigma, TQM, Lean Manufacturing etc. – Quality is defined by the customer experience. Therefore CEPQ shall drive all these systems and similiar used in the supply chain.

Everything is connected; achieving a competitive price, secured availability at point of sale and a sustainability for the product and the company is difficult without assured quality. Implementing and securing good Customer Experienced Product Quality is vital to secure for any company’s Good Business Growth..

RVA helps business to achieve Good Business Growth, please contact us for further details and discussions on how we can work together.. Mark K. Astley – Robert Vernon Associates Ltd.