department. They can focus on the
changing needs of markets and
respond appropriately, making sure
they benefit from the premium
price of innovative products, and
build a brand loyalty.
More recently, companies have
also begun to value the creativity of
their customers. Using an approach
known as “open innovation,” new
ideas are welcomed from all sources,
and customer feedback is valued in
the product-development process.
The opportunity for customers to
post product ratings and reviews
online allows ready access to
customer feedback. Some even use
online crowdsourcing to refine the
design of products.
The rise of “big data”
Computer systems can collect and
yield vast amounts of accurate data,
which can translate into valuable
information about employees,
production lines, and markets.
Data collected about customers
is often referred to simply as “big
data.” Customer buying preferences
and habits can now be tracked with
incredible accuracy—from their
movements around a website, to
where and how they like to buy
products and services, both online
and in stores. This gives an accurate
picture of their overall market, while
also targeting individual
customers, offering them products
in tune with their preferences.The cost of quality
Companies aim to satisfy customers
to get repeat business and good
“word-of-mouth,” which can hugely
boost sales. Those that operate in
the fast-moving-consumer-goods
(FMCG) market, selling such things
as chocolate, beer, and cereals, rely
on quality for creating customer
loyalty. In the service industries,
following this “added-value”
approach can be problematic. If
competing companies raise the
quality of their product or service
to a level that would be unprofitable
to match, this would signal the
need for new strategic thinking.
However, high-quality goods
can last for a long time without
needing replacement, and this
was a problem addressed by
industrial designer Brooke Stevens.
He suggested that companies
could increase sales by creating
in consumers the “desire to own
something a little better, a little
sooner than necessary.” This seems
especially true today, when new
models of products such as
smartphones are produced
regularly—well before their
predecessors are defunct.For a smooth, fast route to a high-
quality product, companies need to
make best use of time and resources.
This has led to the development of a
way of working known as “time-
based management,” which involves
utilizing time in the same way as
raw materials. It is often used with
critical-path analysis, which
identifies all the stages of a project
and puts them into a logical order,
saving companies time and money.
Finally, businesses can improve
processes and sales by observing
the best practice of competitors in
their field, using a process known
as benchmarking, which takes the
“best from the best” so companies
can deliver the best products in the
best way to satisfy customers. ■DELIVERING THE GOODS 287
Improvement usually means
doing something that we have
never done before.
Shigeo Shingo
Japanese industrial engineer
(1909–90)