Operations and quality management principles

Operations & Quality management (Discussion Questions)

Operations and quality management

In an era of increasing competition, economic agents have to continually devise new means of attracting and retaining customers. In order to complete this objective, more and more companies come to implement the practices of customer management. This concept refers specifically to the totality of tools and practices engaged in the development of a fruitful relationship between firm and the customer base. In a different formulation,

"CRM [Customer relationship management] is a business strategy directed to understand, anticipate and respond to the needs of an enterprise's current and potential customers in order to grow the relationship value" (CRM Forecast).

There are various other concepts associated with customer relationship management, three of the more relevant of these being customer success, customer service and customer satisfaction. Each of them refers to specific dimensions of CRM. In this order of ideas:

Customer satisfaction is the feeling of the customers who believe that they are valued by the firm. In addition, satisfaction is pegged to the feelings sensed by the customers when they believe that the offer made by the company -- at the level of both products and services -- is similar, or very close, to their own expectations and needs (SEOnix).

Customer success is strictly dependable on the organizational ability to serve the needs and wants of the customer base. An example of how customer success is implemented refers to the implementation of ongoing research and communications between firm and customers in order to best identify the needs of the clients, the improvement demands or the provision of support (Blaisdell).

Last, customer service represents the totality of support actions offered by the economic agent to the client before the purchase, during the purchase, as well as after the purchase has been completed.

The attainment of organizational success is strictly linked to the attainment of customer success, which is in turn influenced by a wide array of dimensions, including operations management. Operations management can contribute to customer success through aspects such as adequate planning of stocks to ensure sufficiency of the inventory or product design based on the input provided by the customers.

Student 2

Customer management aims to ensure that the firm satisfies the needs of the clients. The means to attaining this objective are multiple, some of them including increased emphasis on customer service, customer success and customer satisfaction. While they are often perceived as synonymous, differences exist between the three components of customer relationship management (CRM).

In this order of ideas, customer service includes the totality of efforts made by the company to support the customer before, during and after they have purchased an item from the firm. Customer satisfaction is the response received by the customer to the positive efforts of the company. In other words, the difference is as such given by the source of origin for the concept -- the firm vs. The customer -- and the actual element which is represented by the concept. Customer satisfaction is felt by the customers when these are ensured that their needs and wants are met by the firm. Last, customer success is attained by the firm, when, through its CRM oriented efforts, it has created customer satisfaction and this satisfaction has helped it attain its objectives. Customer success is also supported, aside from CRM, by operations management at levels such as product planning, design and even distribution (WZL RWTH-AACHEN).

Student 3

The important dimensions of customer relationship management refer to customer satisfaction, customer success and customer service. Customer service refers to the support offered by the company and which is complementary to the actual service or product being sold. It can include elements such as information, warranty or the provision of technical support.

Customer satisfaction is attained when the clients are satisfied with both the purchase made, as well as the quality of the adjacent services. In other words, customer satisfaction is attained when the company manages to create value for the buyer (Adams). In other words, when there exists customer value, there would also exist customer satisfaction. Additionally, when there exist customer satisfaction and customer service quality, there exists customer success. In this setting, customer success is understood as the organization's ability to use the positive relationship with the customers to accomplish its pre-established objectives.

In this order of ides, the difference between the three concepts is that they are inclusive in one another as they each lead to the generation of the other. Still, in order to attain customer success, it is necessary for the firm to fulfill other dimensions as well, such as operations management, e.g. inventory management or logistics operations.

Part B

Student 1

In the era of globalization, market liberalization and increasing competition, economic agents across the globe seek new ways to develop competitive advantages. They strive to become more operationally competitive, more cost effective and more profitable.

In this setting, they often turn to outsourcing, namely the completion of several operations outside the firm. This decision is widely disputed and the researchers and practitioners have yet to come to a common conclusion.

In the current case, an economic agent is looking to outsource its supply and logistics management operations. These operations are extremely complex and they include elements such as "inbound and outbound transportation, fleet management, warehousing, materials handling, order fulfillment, logistics network design, inventory management, supply / demand planning, and management of third party logistics service providers" (Search Manufacturing ERP). Virtually, they include the totality of efforts which ensure that the company is stocked and that the products and commodities reach those who need them, within the required standards.

The decision to outsource these processes is quite complex and it should not be taken easily. Some elements to be considered in the making of this decision include the nature of the company in which the industry operates and the nature of its own operations, the comparative assessment of completing these operations in house and having them outsourced, or the impacts of outsourcing on the company.

At the level of the industry and the operations, it is noted that if the company's primary operations include logistics, then these operations should not be outsourced, but maintained in house. Outsourcing should as such be reserved for the non-core business processes, the outsourcing of which would allow more time and resources to be concentrated on the core operations (Tbije).

Additionally, even if the activities are non-core and outsourcing them could generate benefits, these are often short lived and the company should not engage in them. It would have to downsize its staff members and would suffer demises in its public image. Additionally, it would outsource to more cost effective regions, where it might be accused of exploitation. In other words, outsourcing should be avoided at all lengths.

Assuming a context in which the firm has decided to not outsource the supply and logistics operations, several aspects would have to be taken into consideration. These include the storage of the products, the transportation issues (by which way, in what volumes etc.) or the management of the supplies and orders (Supply Chain).

Student 2

Outsourcing is becoming a more and more popular practice by which economic agents come to reduce their costs. In the current case of the company, the recommendation is that of outsourcing the supply and logistics management operations, since these are tedious and expensive, costing the firm vast financial resources. The advantages the firm would encounter in this scenario include the reduction of costs, the simplification of the business operations -- followed by the ability to better focus on the core business processes --, or the ability to benefit from the support of a third party specialized in supply and logistics management operations (Bucki).