President's Article "Serving our Members with purpose and passion..." By George F. Nagy, C.P.M., President NAPM-Orange County, Inc. Affiliated with the Institute of Supply Management

Another way to view what we do.
Supply chain management might be viewed as the ultimate risk management activity. We are tasked daily to reduce the risks associated with today’s realities of product life cycle, obsolescence, time to market, lower profit margins or lost customers. Another goal is maintaining quality while moving product offshore or to a contract manufacturer. Sometimes the very survival of the organization will depend on our cash management and negotiating skills.

Our job is also to mitigate cash erosion in today’s highly competitive environment. I encourage you to take measurements, establish benchmarks, identify where you want to be and write down a plan how to get here. Break the paradigms. Manage change and do it in increments to avoid being overwhelmed. We at the association can help by our continuing education programs and the networking opportunities. I encourage you to take advantage of all the opportunities your membership provides.

On another note, I recently read an article in Electronic Business entitled “How customer satisfaction prevents customer success” by Wayne Renken, CEO of SenseArray Corp. In it he suggests customer satisfaction is a “flawed idea, at least in practice”. That it implies “continuous improvement” to what is usually a temporary fix. That by specifically addressing the needs of customers, the procedures for and measurements of their satisfaction, creates a tunnel vision effect; and that this might prevent us from seeing a novel approach and perhaps ultimately, a more effective approach.

As purchasing professionals we serve the needs of many different internal and external customers. How can we make sure, that in our effort to satisfy our customer, we do not develop tunnel vision? The article speaks of the concept of “customer success”. It suggests that this is the best measure of how well we are doing and not some customer satisfaction index. The measure should be how much better off that internal or external customer is for having partnered with us. Have we contributed to their success, increased the company’s competitive advantage or had a positive impact on the bottom line. The article asks us to focus on “taking real measurement, and not bureaucratic ones”.

We talk about continuous improvement all the time and the need for it, more than ever under today’s business conditions. Balance is essential. Sometimes by focusing too much customer satisfaction we end up with the opposite outcome, despite the best intentions. I like this concept of “customer success” as a goal and objective. It is very doable with the right attitude and mind set. I encourage you to make a difference.