Voice of the market

The voice of the marketThe supervisor: Dr.Khadair K.Hmood

By Samya Alghazo

What do we mean by the voice of the market?

• The marketplace includes immediate customers as well as competitors, the customers of competitors, potential competitors, and potential customers.

• Customers can be good source of information about competitors, the data should include the strengths and weaknesses, by understanding the competitors we begin to understand the marketplace.

What do we mean by the voice of the market?

• Customer’s data may be useful for targeting weaknesses, improving products and services, and improve the performance of suppliers.

Strategic Quality Planning ModelCompany Mission

Strategic Plan

Competitive forces Strategic Quality Plan customer needs

Gaining insight through benchmarking

• A benchmark is an organization recognized for its exemplary operational performance (best practices).

• Examples: Toyota for process, Intel for design, Scandinavian airlines for service, and Honda for rapid product development.

• Benchmarking is the sharing of information between companies so that both can improve.

Benchmarking

• There are two parties to each benchmarking relationship:1. initiator firm: initiates contact and studies another firm .

2. Target firm(benchmarking partner): is the firm being studied ,and enters into a reciprocal agreement to observe the initiator firm.

3.Types of benchmarking: process, financial, performance, product, strategic, functional.

Process banchmarking

• The initiator firm focuses its observation and investigation on business processes, including: process flows, operating systems, process technologies, the operations of target firm or department.

Financial benchmarking

• To perform financial analysis and to compare the results with the overall competitiveness.

• The interaction will be between the initiator and a third party that gathers this information.

• EX: the internet.

Performance benchmarking Product benchmarking

• Allows initiator firms to assess their competitive position by comparing product and services with those of target firms.

• Performance issues include: cost structures, productivity performance, speed of concept to market ,quality measures.

• When designing new product or upgrade to current products, including: reverse engineering, or dismantling competitor’s products to understand the strengths and weaknesses of their design, and develop new ideas for product and service design.

Strategic benchmarking functional benchmarking

• Involves observing how others compete.

• firms go outside their own industries to learn lessons from companies and organization in different industries

• This involves target firms that have won prestigious honors such as: Malcolm baldridge award, Shingo prize, the Deming prize.

• Where a company focuses its benchmarking efforts on a single function to improve the operation of this function.

• Ex: purchasing managers , marketing department, human resource function, and others in many organization.

Purposes of benchmarking

Benchmarking purposes and quality maturity

Best in

the

world

National

leadershipBest in

class

Beating

industry

standards

Best

in firm

Borrowin

g ideas

Learning

from

successes

Quality

maturity

Commonly Benchmarked Performance Measures

• The measures a firm chooses depend on the key business factors(KBFs).

• KBFs: are factors related to the business success of the firm,

• Ex: if customer satisfaction might be related to market share, then a company would be very interested in tracking its customer satisfaction.

Benchmarked performance measures:

Financial ratio:

such as return on assets (ROA) or

return on investments (ROI), which are

the easiest to obtain and compare.

All is needed is an income statement

and a balance sheet.

Operating Results:

are important for monitoring and

tracking the effectiveness of a company.

Might include cycle times, waste

reduction measures, value-added

measures, and lead time, setup time.

Productivity ratios:

is measuring the extent to which a firm

effectively uses scarce resources.

Human resources measures:

provide important insights into how

effectively the business is being run.

Employee satisfaction is significantly

related to business performance in

many firms.

Customer-Related Results:

Include customer satisfaction and

comparisons of customer satisfaction

relative to competitors.

•Good indicator of financial

performance.

Quality measures:

include conformance-based quality

information such as reject rates,

capability and performance information,

scrap and rework measures, percentage

of defectives, field repairs, costs of

quality.

Benchmarked performance measures:

Market share data:

are an essential indicator of business

success. Market share does not

encompass only a single measure,

because markets are segmented ,market

share includes shares in the different

markets served by the firm.

Structural measures:

include objectives, policies , and

procedures followed by a firm. They include

also safety, production, accounting,

financial, engineering.

Why collect all these measures?

• Management by fact: lead to that decisions are made based on the sound collection and analysis of data.

• Performance measures or indicators are measurable characteristics of products, services, processes, operations the company uses to track and improve performance.

Why collect all these measures?

• The measures should be selected to best represent the factors that lead to improved customer, operational and financial performance.

• Measures support goals.

Key measures:the metrics that need to be monitored to measure the

health of the business.

Critical success factors: factors that help to

determine the success of the firm.

InputsConversion

Process OutputAfter-

sales

Processes

Other

Firms

Control Process

Loop

Customer Feedback Loop

Benchmarking Feedback

Process model

Robert camp’s business benchmarking process

• Step 1: Decide what to benchmark.

• Step 2: Identify whom to benchmark.

• Step 3: Plan and conduct the investigation.

• Step 4: Determine the current performance gap.

• Step 5: Project future performance levels.

Robert camp’s business benchmarking process

• Step 6: Communicate benchmark findings and gain acceptance.

• Step 7: Revise performance goals.

• Step 8: Develop action plans.

• Step 9: Implement specific actions and monitor progress.

• Step 10: Recalibrate the benchmarks.

Leading and managing the benchmarking effort

• Benchmarking is a managed process.

• Managing the benchmarking process involves establishing, supporting, sustaining the benchmarking.

• To begin the management process ,a strategy statement outlining the goals and strategies to be used is developed.

• In strategy statement Management sets expectations for performance.

Leading and managing the benchmarking effort

• Other activity for management include training.

• Training is a key to success in all quality management approaches.

• Many of these training courses are available from many different consulting organizations.

Baselining Reengineering

• Baselining: requires the monitoring of key internal firm performance measures over time to identify trends such as improvement to inform managerial decision making.

• Involve identifying measures, time frames, gathering and analyzing data.

• A fundamental rethinking and redesign of business processes. two factors to achieving success through reengineering:

• breadth refers to the impact of the reengineering process to the entire organization.

• Depth refers to organizational elements such as responsibilities , measurements information technology and skills.

Thank youthe reference:

managing quality

integrating the supply

chain

fifth ed.

S.Thomas foster