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System. He surprisingly discovered that not only the best way for increasing revenue but also
the best way to reduce cost of automobile production was to make the system more flexible
and responsive! This is akin to the situation in the 1960s and 1970s when manufacturing
quality and costs were mistakenly believed to be in the opposition to each other; however,
by the early 1990s, it was clearly established that not only can an enterprise achieve excellent
quality at reduced costs but it was also imperative for its success.
Ohno discovered that the best way to reduce cost was also the best way to make the
enterprise more responsive: customer-responsive management was the most cost-effective
way to solve customer needs. Toyota found that to control costs, they had to separate capac-
ity scheduling (capacity management) from the work dispatching (task assignments): the
responsiveness was not necessarily limited because of the constraints or inflexibilities or
limitations of the infrastructure but primarily because of the inflexible way the deliveries are
scheduled and assigned (i.e., coordinated, monitored, and, if delayed, expedited).
3. Customer responsiveness is activity based : Customer responsiveness is activity based, where
every activity is constituted of four parts:
a. The first is an event (whether internal, external, regular, or dramatic) that triggers the
response.
b. The second defines the actions or tasks (guided by existing or customized best-practice
guidelines) that need to be taken in response to the event.
c. Third is the assignment (i.e., JIT coordination) of the identified actions to resources with
appropriate capability and capacity, in response to the event. Assignment minimizes lead
time and thus contributes in enhancing the flexibility.
d. Lastly, the desired benefits are delivered to the customer.
1.2.2.1 Salient Aspects of Customer Responsiveness
A major part of the following sections has been inspired by the insightful topic entitled Customer-
Responsive Management: The Flexible Advantage authored by Frank W. Davis and Karl B. Manrodt.
he literature on enterprise responsiveness is rather limited, but this topic is an exception and had
a lasting impression on the author in that it ignited an abiding interest into the nature of respon-
siveness and characteristics of responsive enterprises.
Salient aspects involved with the Customer Relationship Management are as follows.
1.2.2.1.1 Needs Diagnosis Management
This involves activities related to identifying, discovering, or understanding the needs of prospects
or newer needs of existing customers. Traditional offering-based or mass marketing organiza-
tions typically achieve this through product catalogs, demonstrations, or even product datasheets.
However, responsive organizations achieve this through dialog with the customer regarding their
operational or design issues problems, inefficiencies, and so on.
1.2.2.1.2 Best-Practice Guidelines Management
Best-practice guidelines management is to response-based enterprises what strategic and tacti-
cal planning is to the offering-based or mass marketing enterprises. It is the management of the
enterprise's knowledge base by collecting newer needs encountered and solutions proposed and
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