03 Costumer Focus

SENA Centro Nacional de Formación Virtual y a Distancia.

TECNÓLOGO EN GESTIÓN LOGÍSTICACustomer Focus

1.

Read the following adapted document Customer Focus by Donald Waters.

Read the following questions and answer them according to your knowledge.1. What is a customer in the Supply Logistics Chain?2. How does an organization determine customer requirements?3. Why is important to identify customer requirements?

2.

CUSTOMER FOCUS

Determine, communicate and meet customer needs and expectations’ are essential factors in the characterization of actors in the supply chain and development of the organization. In his document, Waters (2007) states that customer is not “simply the person or organization that pays the invoice but includes users as well as makers”. Waters declares that Customer Focus wants to satisfy customers under the concept of profitability and without any company loss. In order to know their requirements is necessary to ask customers what they need before making a decision and how the decision affects them. These questions lead the direction of the company and of their customers’ needs. The application of Customer Focus looks for the meaning, necessity and evidence needed for:Determining customer requirements;Communicating the importance of requirements;Meeting customer requirements;

DETERMINING CUSTOMER REQUIREMENTS

“All organizations have customers” and they “exist to create and retain satisfied customers – those that do not do so, fail to survive”. According to the author, “it is essential for the survival of an organization that it determines customer requirements”. Water says that the determination of customer needs and expectations differs from the establishment of customer requirements; for that reason, first the

organization needs “to seek to establish customer needs and expectations” before to start “the design of products and services to offer them for sale”. After that, the organization checks the results, and it determines what the customer requirements are. “These requirements respond to the Customer Focus Principle”.

The author expresses that “the requirement is implemented through the Demand Creation Process”. It involves the management system and the marketing process to satisfy customers. The marketing process tries to detect what customers want to attract them to the organization with the intention that their wants are satisfied. Also, the sales process makes contact with customers for

READING COMPREHENSION ACTIVITY



existing products and services to make enquiries and to know their needs, then those needs are firm orders. In this process, it is significant to determine the customer requirements to match the benefits of existing products and services with the needs and expectations of customers. Consequently, it is important to understand the needs before making a commitment to supply products or services.

Understanding Customer NeedsWaters assures that in order to determine customer needs and expectations you need to answer some important questions._ Who are our customers?_ Where are our customers?_ What do customers buy?_ What is value to the customer?_ Which of the customer’s wants are not adequately satisfied?

The answers to the above questions will enable marketing objectives to be established for:_ existing products and services in present markets;_ abandonment of obsolete products, services and markets;_ new products and services for existing markets;_ new markets;_ service standards and service performance;_ product standards and product performance.

The results of market research will be a mix of things. It will identify:_ new potential customers for existing products and services;_ new potential markets;_ opportunities for which no technology exists;_ opportunities for which no product or service solution exists;_ enhancements to existing products and services.

“The organization needs to decide which of these to pursue and this requires a process that involves”

all the actors in the logistic chain. The company needs to focus on all the parts of it to exploit the organization’s full potential. Waters adds that “the contributions from design, production, service delivery, legal and regulation experts are vital to formulating a strong set of customer requirements from which to develop new markets, new products and new services. The research may identify a need for improvement in specific products or a range of products, but the breakthroughs will come from studying customer behaviour(sic) “.

Determining customer needs and expectations need to be extent to other possible customers. The organization can check the good distribution, import regulations or distribution polices to satisfy new markets and actors in the supply chain or to preserve the product and service life.

The author quotes Morris (1960), who argues that customer’s needs analysis is necessary to show its results to design customers’ requirements and to “translate customer needs and expectations into performance, physical and functional characteristics for a product or service”. If the organization misunderstands customer needs and expectations it will produce an inadequate set of requirements. It is therefore the most relevant stage in the demand creation process where ideas and beliefs are tested and retested to ensure that they really do reflect customer needs and expectations.

In order to know customer requirements is necessary to gather data from the people involved in the use of products and services to make decision in the organization. “The data can be primary data



(data collected for the first time during a market research study) or secondary data (previously collected data). However, you need to be cautious with secondary data because it could be obsolete” or make with different research purposes. This data identifies problems or opportunities.

Surveys are used for obtaining primary data. “Asking questions that reveal their priorities, their preferences, their desires, their unsatisfied wants etc. provide the necessary information. Information on the profile of the ultimate customers with respect to location, occupation, life style, spending power, leisure pursuits etc. to size the market to be established. Asking questions about their supplier preferences and establishing what these suppliers provide is also necessary. Knowing what the customer will pay more for is also necessary”, because many may expect features that were once options, to be provided as standard. Other sources of secondary data can be trade press reports and independent reviews. Comments about other products can give a wider perception of the needs and expectations of other possible customers.

COMMUNICATING THE IMPORTANCE OF REQUIREMENTS

The organization needs to communicate customers’ needs to establish statutory and regulatory requirements into it. To the author, “effective communication consists of four steps: attention, understanding, acceptance and action. It is not just the sending of messages from one source to another”. The communication permits to transfer information to satisfy customers’ needs.

Statutory and Regulatory Requirements

“Customers not only purchase products and services”, they also desire a sustaining relationship with a consistent quality, delivery and cost. It

permits to manage operations with environmental, health and safety legislation. The absence of key personnel for illness reasons can impact deliveries and relationships. “Some customers require their suppliers to operate ethically and conserve the environment”. Also, financial laws permit that the organization keeps the money to pay the fines without affecting the organization; therefore it is not only the product related to regulations that can affect customer satisfaction. Some customers require the organization to provide products and services that fulfill with statutory and regulatory requirements.

The writer thinks that in organizations where the producers are remote from the customer, it is indispensable to transmit customer expectations to the company members to make decisions primarily on the basis of satisfying these expectations and not on the secondary internal requirements. In management, is necessary to be clear about the intentions respecting of customers’ requirements, because in this way, the workers will focus in the factors that can affect their priorities. In opinion of the author, meeting requirements obliges a realignment of priorities and careful consideration to manage the attention, understanding, and acceptance and correct action of the workforce in favor of the customer needs.



MEETING REQUIREMENTS

Customer requirements need to develop customer satisfaction. Organizations need to do the necessary to satisfy customers. If the organization interprets customers’ requirements, it can supply them according to their needs and the statutory regulations. Water says that organizations only stay in business by satisfying their customers but organizations can fail to survive if they do not also satisfy other stakeholders such as their employees, regulators and society. People will only continue to work for organizations that treat them fairly. Regulators can close down businesses if an organization breaks the rules and if all else fails, society can influence government and so change the law to stop organizations behaving in a way that harms the population not only of the host country but even the earth itself. Each actor in the supply chain is a customer who constructs an operating system that meets the goals to achieve in the chain.

In sum, Customer Focus integrates all the actors in the logistic chain with their needs and wants. Each one is a customer to be satisfied in all his requirements under legal, environmental and statutory regulations. An organization survives if internal or external members find their needs.



CustomerFocus

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By means of

statutory and regulatory requirements expectations

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ACTIVITY

Read the text and complete the diagram according to the corresponding information. Use the words in the box.

When you finish the activity, check your diagram according to the answer sheet.



needs

Customer Needs and Expectations

To know customerTo

by means of to know

occupation

search for new markets design servicessurveysexpectations requirements

pricelocationpreferences

design products

satisfy customer's needsmatch benefits

standarize products

priorities

desiresunsatisfy wants

life style

others

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ofof

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safetyenvironmentdeliverytransferregulatory

qualityrequirementsstatutoryEstablish

information

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health

financial laws

Meeting Requirements

To developof tocustomer satisfaction

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actors in the supply chain construct operating systems

Customer Focus

REFERENCES

Waters, Donald. (2007). Global Logistics - New Directions in Supply Chain Management. (5th Edition). Kogan Page Publishers.

Online version available at:http://www.knovel.com/web/portal/browse/display?_EXT_KNOVEL_DISPLAY_bookid=2573&VerticalID=0

Documents

03 Costumer Focus