customer expectation

What does Finance know about project management?

Posted on by owenl598

       Being the Finance Manager for a company that does rollouts and installs of POS and Voice systems for major retailers, I really get to see the impact of project management on the companies’ bottom line, be it positive or negative.  We quote our projects between a 30 and 40 percent margin, but in 2011 we saw projects running anywhere between 65 and negative 25 percent.  Our CEO estimated that 80% of the variability was due to our own operational inefficiency, while only 20% was due to factors beyond our control.  While the wide range and inconsistencies of our project margins were troubling, the biggest issue was that overall the margins were down, with over 75% of our projects coming in under quote.  At the beginning of 2012, my boss and I were assigned to investigate what was causing the lower margins, and to come up with a plan to turn it around.  It may seem strange that Finance was assigned this task, but our CEO’s reasoning wass was that we are the ones who look at projects on a macro level and are responsible for explaining the margin variation, while every other department is only focused on their one piece (i.e Sales, Logistics, AR, etc.).

       After spending two months auditing our operations, talking with people in Sales Engineering (quoting), Sales, Operations, Logistics, and AR, we identified many problems contributing to the lower margins, but the overall problem that we identified was a lack of a clearly defined process for our projects.  While every project is different in terms of the scope of work at the site and the deliverables that the customer expects, if the administration of a project on our end is done consistently, many of the problems we run into could be eliminated. 

       Some examples of simple steps that have been skipped leading to a hit in our margins are: 1) final revisions to quotes not being authorized by the customer, 2) sales not reviewing the first invoices that are sent to the customer, 3) work orders not being created in time so that contracting has to rush to contract the labor and has to pay premium rates, 4) AR not putting job notes on the invoice, 5) Logistics shipping the wrong equipment to the site, and 6) work being approved without a customer PO.

       To control the problems and get all the departments on the same page when it comes to our project management, we developed a project checklist and worked with IT to implement this checklist into the current PM software we are using. With this checklist, every adminitration step has a due date, a responsibility assigned, and needs to be checked off before moving on. The benefits of this include increased organization, increased accountability, and better communication. Since we implemented this new checklist, we have seen an increase in our margins each month in the last 3 months, as well as increased cash flow by ensuring we are collecting the revenue quicker from our customers.  It’s amazing to see what an impact the simple step of creating a comprehensive checklist can make to the bottom line.

Here is an excel copy of out Project Accountability Checklist for anyone interested.

What do your companies do to keep projects organized on the back-end? Do you have any kind of defined project process or checklist?

Samsung Galaxy S III isn’t quite an iPhone Killer

Posted on by justinas301s12

Recently I have read a review article on the newest Samsung phone, the Galaxy S III which came out this month. The Galaxy S III is the latest and the most ambitious phone from Samsung, which is available in most of the US, carries such as AT&T, Sprint, T-Mobile and a few others for around 200$ with a 2-year contract. While Samsung was aiming high with their newest phone and introducing a lot of new features, trying to cater to the customer’s wants and needs, according to the review it felt short due to some of its features not working properly.(http://www.cnn.com/2012/06/20/tech/mobile/wired-review-samsung-galaxy/index.html)

This week we have learned a lot about the design of goods and services, from the product decision process, to the ethical considerations involved in it. There are many decisions that have to be made and many aspects that have to be taken into consideration when creating something new or even when trying to improve a product. Samsung newest innovation the Galaxy S III has definitely undergone many decisions involving the price, software, design, as well as the different apps that are designed to use on only for this phone. The price of the phone is pretty affordable, as long as the customer would be willing to sign up for a contract with their service provider. The other good thing about the phone is that it is sold across the five US carriers. The phone also offers fast processing, a new voice recognition feature called S Voice, a display that is sharp and bright and a very light body. While this newer version of the Samsung Galaxy has been a big improvement, it still is not quite enough to over shine some other phones such as iPhone or One X. Some negative things that were pointed about the phone were, that the new feature S Voice is not really working properly and is no match to Apple’s Siri, also the sharing features are not really thought through out and could be improved upon. As many other phones out in the market place, this phone is not perfect, all of the phones have some features that still might need to be improved on. Even with its few flaws, I believe that this phone is a great new product that caters to most of the customers needs with its low price, easy accessibility and newly innovated features.

 

What do you think about the Galaxy S III?  Is it a product worth buying?

Cinderella’s shoe, does it fit everyone?

Posted on by nadaj502

Husband and Wife both are Six Sigma practitioners. Obviously, their daily lives conversations happen in Six Sigma parlance. The wife happens to be a very good cook, one of the reasons why the husband married her. Suddenly, three days at a stretch, the food starts to have extra salt. Husband objects, to which wife responds

“Common Cause of Variation”. One day, the wife adds a lot of salt to the food. Husband takes ill and is admitted to the hospital. Wife comes to see him and quips, “Sorry, special cause of variation.” Husband says, “It was Structural.”

Three days later, Husband hands out a divorce notice to wife and quips, “Process Unstable. Not meeting CTQ*.”
*CTQs are the internal critical quality parameters that relate to the wants and needs of the customer.

Thought of sharing this joke as I believe it will help us all in remembering few vocabularies used during our last session.

The last few session reminded me of one of the main product development projects that I’ve worked on, where we launched one product in 7 different markets, however we had to customize it a bit for each market in order to meet customer expectations in each of the 7 markets.
The product was basically a credit card in local currency, you may wonder what is so special about it? Well it was an American Express local currency Credit Card.  And as you may know, American Express is considered the most prestigious plastic card in the world, and it targets individuals with high expenditure patterns. Refer to this blog for American  American
Express’s Competitive Position.

As this may be very true for its main product “the Charge Card”, it was not applicable for their Credit Card target segment, which made the product development & marketing teams wonder of what would attract customers to American Express Credit Card rather than any other credit cards available in their market? Well the development team followed the differentiation strategy while designing the product. It was the feel of the prestigious card that attracted customers to it, in addition to the appropriately designed product that met customer’s expectation in each of the targeted markets. But how did the development team identify the customer needs? They utilized their existing data and referred to the Charge Card customer base, they asked them if they would like to hold supplementary Credit Cards for their spouses and children with a credit limit, and bang that was highly demanded. As loyal cardholders they didn’t want to hold many different brands of cards and also didn’t want to  provide the open limit charge card as supplementary cards to their family. Of course further focus groups were obtained then to identify the requirements of each market, and to develop a product that is different than the current ones in the market. Tremendous amount of work was held but it was worth it, the product was launched successfully and it was well perceived in all 7 different markets.

However, do you think what AMEX did for identifying customer’s needs in each market was enough? If not, what alternative ways would you suggest?

The Cursed Shop

Posted on by mohammedala502

“Beware of this haunted shop I heard there was a kid who once entered this shop and never came out. His poor mother lives in misery because of her loss” said Cousin Noah. I still remember that day while my cousin and I were walking passing by this shop located in Arad Town. It was before 20 years but I remember it like yesterday, this shop was called the cursed shop, or the haunted shop. Furthermore the title (cursed shop) came because whenever a restaurant opens in this same shop after a while the business shuts down. By time people started believing that this shop was really cursed, it’s funny how some people are naïve.

 

 

I kept in mind this shop and the different restaurants that opened there; I said to myself there must be a reason behind this. Further investigation in this case I found out the reason was simple; the restaurants did not have good forecasts for the demands of the customers. A restaurant would open to operate and they would order for example a large amount of Kebab given it’s a restaurant serving fresh food they would have many Kebab left unfortunately some were already grilled and been ready to serve, this is just one example. Of course the forecasting was not the only reason, given the place of the restaurant, prices, and demand of customers played a role.

I believe that this restaurant could have avoided the risk by using the forecast starting from Qualitative method (using surveys or even second hand information.)Also using the Quantitative methods to forecast the demand and base the price on the forecasts.

Friday (11th may) class was an eye opening class, I always wanted to know how restaurants were able to survive and know exactly how much portion of meat, salads , fish , or any type of food to prepare each day. From the class exercise I leaned that there are different types of forecasts that addresses different categorize like (Economic, Technological and Demand forecasts.)Furthermore each method is suitable for a different case or scenario. There are two approaches to this matter the Qualitative  including ( Delphi method , consumer market survey , sales force composite) , and the Quantitative method including  ( Naïve approach , moving averages , exponential smoothing , trend projection , linear regression. )Moreover the manager has to know what type of forecast to use because each approach will give an answer however only one answer is accurate and reflects reality.

 

 

CLICKER TIME:

 

Do you believe that Forecasting is vital for any restaurant?

  1. YES
  2.  NO
  3. I didn’t read the article I just want to comment for the 5%

What do you think is the best Quantitative method to use for the restaurant?

 

 

More on restaurants failure click here:

http://www.econ.ucsb.edu/~tedb/Courses/Ec1F07/restaurantsfail.pdf

 

Winning with Customer Service

Posted on by maryama502

 

 

Operation management in the banking sector is challenging for me since I’m holding the duties of branch manager. Last class we have learned about operation management in the service sector. I didn’t realize that what I’m doing is considered as operation management. As you all know customer wants and satisfaction is the success measure of any business; i.e. if customer left our branch dissatisfied he will be unwilling to deal with the bank and it will affect the bank reputation.

I have just faced customer complaint last week when his car loan application went into a long process over our bank departments. He was saying that his friend applies for the same in other bank and he got the car after three days only. When I contact the other department asking about the reason for the delay it was not reason that will stop processing the loan and the loan can be processed now and then the customer is going to provide us with the requested document.
What I have realized here, bank departments that have no direct customer interaction will not do their job based on customer is first, what they do basically is to make sure that all documents needed are provided.

What do you think about operations, credit and risk department? How can they be involved in providing excellent customer service?

Moreover, the customer was complaining that the customer service representative was not clear about the missing document. I have talked to the customer service representative and realized that she did not read the document properly before sending it to the concern department and at the same time the car loan were approved from three departments without realizing the missing document.
I think the problem was from all departments starting from the front line to the back line. At the end his requested was processed in exceptional bases because the bank policy prohibits processing such loan without the required document.

Do you think the bank policy is a source of not meeting customer expectations? What about exceptions? Does it meet customer expectations?

At the end, the customer gets his car in the same day he raised the complaint and he left the bank satisfied and happy. He will be dealing with the bank as his loan will last for seven years which will leads for a strong customer relationship. As you all realized the problem was from the front line at the beginning, I have explain the problem with the customer service representative and instruct her how to deal with such cases.

How can the customer service representative avoid customer complaint? Is training enough?