ERP & Coffee Mate
Catching up with a couple of friends recently, we decided to meet in a café. It was particularly busy but, as I was early I decided to go ahead and get my coffee. Having paid, and whilst standing in line waiting for my skinny latte, I started looking for somewhere for us all to sit. A little frustrated that it seemed to be taking some time for my coffee to materialise I saw a table come free but there were still two people in the queue ahead of me. My customer satisfaction levels at this precise point was rapidly dwindling – I was stuck in a queue, waiting for my coffee and unable to move to the now available free table.
You might be wondering what has this got to do with ERP but the fact is, this particular circumstance got me thinking, and how my personal experience is actually no different to that of a packet of work managed through an ERP system….
ERP System Coffee Shop
Customer places an order = Select coffee
Order put on the system = Assistant enters the item and cost into the till
Manufacturing process = Warm up milk and percolate coffee
Shipping = Coffee is passed over the counter
So where in this process is value added and destroyed? Any queue-time in the work-flow is unacceptable and, fundamentally destroys value. Or, put another way, creates customer dis-satisfaction. At the café my personal customer satisfaction level would have been determined by three separate factors:
1. The price paid
2. The product – the coffee, the ambience, etc
3. The efficiency of the business process
Regardless of whether the coffee cost £2.00 or £2.75 per cup, the price is probably the least important factor of the three in determining “customer satisfaction”. The efficiency of the business process – ie, how long did I have to wait before placing my order and how long before my coffee was delivered – is likely to be the primary factor in determining the propensity to revisit this café. Secondary factors will be the value-adds – how comfortable were the chairs, was it clean and did they provide free wi-fi? In other words, customer satisfaction levels have a direct correlation to customer retention and revenue.
A company who focuses on customer satisfaction today will reap the rewards tomorrow of increased profitability. Why? For a host of factors including:–
1. Reduced customer churn
2. Increased levels of repeat business
3. Customer recommendations & referrals
4. Lower levels of complaints, returns, etc
It is well-documented in Treacy and Wiersema’s Value Disciplines that in order for companies to succeed they must choose from one of three value discipline strategies:
One of the fundamental elements of focusing on “Operational Excellence” is to optimise business processes across functional and organizational boundaries. In other words ensure “Customer Satisfaction”. By having the right tools in place within your ERP, inefficiencies can be quickly identified – with one of the major factors being queue-time. With constant monitoring, queue-times can be eliminated…leading to manufacturing efficiencies and perhaps more importantly increased customer satisfaction.
Back in the café they are now reducing queue times (or Value Sinks as we think of them). Having moved the coffee machine so that it is next to the frother, they are now frothing the milk the same time as making the coffee.
Improving customer satisfaction in the café could be achieved quite simply but, in complex manufacturing and supply chain operations, having the right tools/technologies and the expertise to deploy them is the only way to identify and remove Value Sinks.