By Catherine De Rosa
Vice President of Marketing, Symix

Over the past decade, improving operational effectiveness to provide the highest quality goods and services became the overarching concern of businesses worldwide. But along the way, the diffusion and adoption of these practices created competitive equality -- a level playing field -- and a challenging new issue: If quality is a given, on what criteria will customers base purchase decisions? On what basis will manufacturers compete?

The answer is value-creation-customer-directed value. To win, manufacturers must take a quantum leap in strategic focus, beyond operational efficiency, and integrate the customer into the corporate planning process to deliver customized services and solutions that redefine product value. They must adopt a new business model: customer synchronized resource planning (CSRP).


Who owns the customer?
Can you:

• Predict what your most profitable markets will demand in one year?
  
  
• Identify the one product enhancement your customers request most?
  
  
• Generate and track leads in your most profitable markets? Quote accurate delivery times on customized orders? Respond to service calls within 24 hours? Eight hours? One hour? Access vital customer information anywhere on the globe, any time?
  
  
• Identify why products and services are profitable? Network with suppliers to effectively bring solutions to customers? Recommend five product introductions or enhancements to increase sales in a year?

Manufacturers face dozens of similar questions daily. Yet few can answer "yes" to even a handful. Why? These answers require in-depth knowledge of customers, customer requirements and preferences -- information not easy to assemble or use and not normally integrated into today's enterprise management systems.

Intense competition has driven manufacturing to focus on finding ways to improve and speed up processes, and on how to make products better, cheaper and faster. The focus has been on the delivery cycle, not the customer.

Why the intense focus on how to achieve operational effectiveness? Because manufacturers could, business experts said they should, and the competition was already doing it. As Harvard Business School Professor Michael E. Porter explained in the Harvard Business Review article, "What is Strategy?": "The pursuit of operational effectiveness is seductive because it is concrete and actionable."

Unfortunately, operational efficiencies are not defensible. A transient work force, transferable technologies and widespread communication of best practices make operational superiority temporary. In the future, competitive advantage will be micro-dictated by the market -- by individual customers.

Competitive advantage will be achieved by profitably delivering total customer value. Focus must expand beyond how to produce and concentrate on what to produce.

The goal will be to make product and market efficiencies -- the art of determining "what to offer" -- concrete and actionable. Manufacturers' ability to synchronize customers with their resource planning processes will be critical. Customer synchronized resource planning will define means and methods.

So who owns the customer? It's the company that can partner with customers to determine what to offer and then use its manufacturing and operational strengths to offer it better and faster than its rivals.


Moving from ERP to CSRP: Focus on the customer
Four elements compose customer synchronized resource planning (CSRP):

1. Optimize operations. CSRP begins with efficient execution of enterprise resource planning (ERP), particularly in two critical areas.First, ERP is a framework and proven set of tools that tightly integrates the core execution operations of the enterprise. It establishes a systematic, measurable methodology. This is critical and powerful to CSRP, because once a business methodology is defined, process improvements can be identified, executed and repeated on a predictable basis. Second, if ERP make-to-order manufacturing applications are implemented, the required procedures are in place to manufacture customized products. Providing cost-effective, customized solutions is a critical component of CSRP.
   
   
2. Integrate customers and customer-centric departments. This is the heart -- and breakthrough element -- of CSRP. Synchronizing an organization's customers and customer-centric departments with its resource planning and execution provides the ability to achieve long-term competitive differentiation. It allows manufacturers to move beyond how to manufacture to understanding what products to make, what services to offer and how to provide customized product offerings. Why are manufacturers not currently customer-synchronized or customer-focused? Customer information and knowledge is not integrated with mainstream business planning systems. There is no concrete and actionable way to move customer knowledge effectively throughout the organization. The judgment on what is truly required -- what works and what doesn't -- exists with the customer. Coupling this information tightly with production and fulfillment is paramount. CSRP integrates this critical customer information directly into the manufacturer's planning and delivery processes, shifting the focus of the enterprise from production planning to customer planning.
   
   
3. Utilize open technologies. Fifteen years ago, mainframe and host-based technologies were in their prime. Machine requirements drove software development. In the 1980s, application developers began using new operating systems that could scan multiple hardware environments. The age of UNIX and open solutions began. Today, with the proliferation of PCs, manufacturers can quickly and cost effectively introduce new technologies and applications to satisfy broad-based needs. The obvious next step is to use open systems and the latest technologies to integrate and combine departmental information so that the development of strategic initiatives like CSRP is actionable, repeatable and affordable. This necessitates a move away from proprietary systems, including proprietary ERP solutions.
   
   
4. Customize product and service offerings to match customer needs. This is the payoff! Once the organization has optimized operations, integrated the customer, implemented an open technology architecture and refocused on customer-driven operations, a virtual organization exists. Answering the customer-focused questions posed earlier becomes easy now. What products do my most profitable markets want? I know this, so I track it, act on it and focus on it in every department.

How do I make products and services more profitable? My customer service, marketing, sales, R&D, finance and field service departments know what customers want most. They can design, build, reengineer or partner with suppliers to offer profitable, customized offerings. My infrastructure makes this possible.


Meeting the customers' needs
For manufacturers, the key to winning the most-valued supplier distinction lies in solving your customers' problems with your processes and information, wrapping your processes around your customers needs and delivering the unique solutions they need to grow and prosper.

Customer synchronized resource planning provides the means to do so, quickly and effectively, in order to make strategic differentiation concrete and actionable and to make manufacturers indispensable to their customers.

Copyright © 2020 by APICS — The Educational Society for Resource Management. All rights reserved.

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