case study What a customer wants and what a customer gets can be two very different things. To get more in tune with customer preferences, Hunter Holden implemented a new dealer management system, taking customer relationship management (CRM) right back to the manufacturing floor.
Next time you see a yellow car whizzing round the streets, don't assume for a single moment that the driver actually wanted it in yellow. According to Gordon Towell, CEO of e-business supply chain management software provider IDS, the reason this character is driving a yellow car could be due to a fundamental error in the manufacturing of durable goods -- the inability for manufacturers to get access to data about what customers want.
The manufacturer normally only gets to see what the customer buys, and the two can be worlds apart, says Towell.
A car-buying punter usually walks into a showroom with a list of features it desires, be it alloy wheels, a sun roof, or silver paintwork. But Towell claims that 90 percent of people drive out of a showroom in a car that doesn't match those original specifications because dealers don't always have the exact match and sell a different model at a discounted price.
So, the customer speeds off in a yellow vehicle and a little way down the line the manufacturer receives a quarterly report from the dealership stating that 100,000 yellow cars were sold. So what does it do? It manufactures 100,000 more yellow cars for the next quarter, when really it should be manufacturing 100,000 silver cars.
The question is: if a customer walks into a dealership wanting a silver car, and is instead offered and accepts a yellow car at a discount price, aside from the loss of a decent margin, is the simple fact that a silver car was the preferred choice also lost forever?
It is based on the concept of demand chain management (DCM), the lesser known relation of supply chain management and enables a customer to enter a showroom and find out instantly whether the perfect vehicle exists in the dealer network, within the logistics chain, is in transit or is being assembled at the manufacturer.
-What we're talking about is full integration from factory to retail, allowing the customer to request what he or she wants and the manufacturer to deliver it. DCM is not new but the technology to make it happen hasn't really existed before," says Towell.
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