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so that the right product is offered to the marketplace. This approach results in centralized
product planning, process planning, production scheduling, and market planning that is
separated from the daily operations. When the change is gradual and incremental, the tradi-
tional make-and-sell enterprises focus on optimizing the efficiency of execution in terms of
the following:
◾
Predicting or forecasting or projecting the market demand
◾
Minimizing the cost of making and selling the corresponding offering
In contrast, when the customer-driven change becomes rapid and essentially unpredictable,
adaptiveness takes precedence over efficiency: the enterprises need to sense early the need of the
customer and respond in real term, individual customer by individual customer. The sense-and-
respond enterprise becomes a pool of modular capabilities that can be dynamically configured and
reconfigured to respond to the customer's latest requirements. Therefore, in make-and-sell enter-
prises, the plan comes first, while in the sense-and-respond enterprises, the customer comes first;
make-and-sell enterprises primarily focus on what is common among many customers rather than what
is different about individual ones
(see Section 1.2.6.4 “One-to-One Marketing”). The customer
commitment rather than the command-and-control structure defines the dynamic interactions
between the modular capabilities.
Customer-responsive management
(
CRM
) enables enterprises to be more adaptable to changing
conditions and responsive to smaller markets. The responsiveness could be in terms of
1. Timeliness (e.g., a schedule)
2. Time window (i.e., by a specified time range)
3. Priority (e.g., a dynamic dispatch list)
It recognizes that forecasting and planning become more difficult as the marketplace and environ-
ment become more turbulent. The detailed planning of work is done at the front line. The purpose
of flexible planning is not to plan all the details of the work but to plan the infrastructure that
is necessary to enable and facilitate individual-level changes.
CRM
emphasizes taking steps that
minimize the time and cost required to recognize and respond to changes. Whereas mass produc-
tion was based on defining a product and designing the most efficient means of producing large
quantities of a product,
CRM
designs flexible processes that could make it easier to respond to
changing conditions.
hus,
CRM
consists of two major relationships: one relationship is with the customers to
identify and diagnose needs, and the second relationship is with the network of suppliers who
make the delivery. For offering-based enterprises, the former corresponds to the marketing func-
tion (e.g., market research, product planning, advertising, sales, and customer service) and the
latter corresponds to the operations function (e.g., purchasing, production, supply chain logistics,
and human resources). For traditional offering-based enterprises, logistics is generally understood
as the process of managing the efficient flow and storage of raw materials, in-process inventory,
finished goods, and information for conformance with the customer requirements. But within
the
CRM
framework, this logistics concept transforms to the coordination of deliveries that are
responsive to individual customer requests using a network of resources and integrated by flexible
processes and communications.
