Finishers focus on quality, cost and delivery—“QCD”—for good reason. It’s a popular metric and, if you can do it efficiently, it keeps customers happy. Trouble is, from a management point of view, “quality” always seems to trump cost and delivery. It’s probably because poor quality is so unacceptable. Well, I agree with the latter, but not so fast. Here’s the problem:
- There’s more potential for a shop to innovate with cost and delivery—A narrow focus on quality negates other, less competitive, perhaps less expensive opportunities to build great value for your customers and,
- Customers may dismiss “quality” as non-negotiable anyway—Quality is actually the part THEY dictate, not you.
What you can say about QCD is that it provides a large target of value for shops to aim for. Three clear disciplines also make it easy for larger shops to divide and conquer.
FIRST, SET ASIDE FINISHING QUALITY
For the sake of argument, let’s dismiss the quality metric and the whole bailiwick of cost-of-quality for that matter. Let’s do it in favor of examining innovation on price and delivery. That’s where there’s new opportunity to grow your business. Here’s how we’ll set aside QUALITY:
In manufacturing, quality is an objective metric. To grossly oversimplify, it’s a conformance to specification—you get it or you don’t. It’s not about grade. It is not about custom. And it’s nothing subjective. Outside of efficiency, there’s little judgment involved, yours or your customers’.
Read more about quality at HIT Solutions/Industrious Bastard blog, “Manufacturing-quality: How exactly do you hit the mark?”
NEXT, DISCOVER LOST OPPORTUNITY
Since your customers dictate QUALITY, you have the divine opportunity to define what exactly your price and your delivery look like. Here’s where you start thinking:
Imagine for a moment you could remove “quality” from the business equation. What does your value proposition look like now? How does your finishing story explain how you control your costs in order to offer the best price value on the block? What is it about the coatings you use and the delivery promise you make that is so compelling that I need you and only you? Finally, how does this change affect your positioning in the marketplace? How will you adjust your resources to support new ideas?
Those are the questions; the opportunity is available to any finisher who wants it.
Consider how many ways YOU could define DELIVERY and you’ll understand the opportunity to excel as a preferred coatings and finishing shop. Broadly, I define delivery as a customer service metric you cannot afford to let slip.
Delivery is more than hitting promise dates. And it’s much more that merely getting products into your customers’ hands. Those are both expected. What else have you got?
Next, consider that the cost of acquiring a new customer is about five times that of retaining an existing one. If you’re lucky enough to engender a healthy relationship with your customer, the disparity becomes even greater.
MAKE PRICE PART OF THE STORY
Successful finishers know; you don’t ship until you’ve got all your ducks in a row. As a supply chain, the finisher must work his magic to create consistent quality and deliver like it’s his only job. But margins are slim and COSTS can be transparent. Your opportunity is to improve your story by innovating on PRICE.
Price is a function of value. I don’t make decisions based merely on price. Few people do. Think about things or experiences that you like that you’re also willing to pay for without too much question. The difference is VALUE as told in the story.
I am a sucker for a good story. I could be buying beer nuts at a truck stop. The familiar little commercial package speaks plenty enough to justify the price, I know what to expect. But imagine there was a comparably sized package of beer nuts alongside, priced 75 cents cheaper. Would this zip-lock baggie of beer nuts, labeled by hand with a Sharpie, make a difference in your decision? It would for me.
While there’s probably a story that goes with the zip-lock baggie, you really don’t have time at any price difference. The commercial package delivers a better story. There’s one you’re familiar with, one you can believe in and the one you’ll remember to grab next time. The story attached includes the now exorbitant price you’re willing to pay.
The same goes for your finishing product. What can you do to improve the story? What have you done already that hasn’t been communicated? Your price becomes part of the story of your product. Name it what you want.
Quality is the only place you want parity with your competition. A spec is a spec. Match it, improve your efficiency and move on to develop other, more differentiating, parts of your story such as COST and DELIVERY. It will captivate your customers.
Find out how Accessa can help you improve your QCD. Talk to them about your ideas and your objectives. As a trusted coatings partner, they can provide both onsite support and full laboratory support capabilities to keep your story alive.
I welcome your comments, questions or more discussion.