Last night I watched “The Toyota Story” on BBC2. It was sad to see the mighty giant in so much difficulty and receiving so much bad publicity. The programme showed how Toyota became the World leader in manufacturing and the five key principles that got it there. For me it was important to be reminded about those principles but also how vital it is to stay focussed on them.
DrivenByQ is based around the same principles and the importance of eliminating waste or “Muda” as the Japanese call it. A lot of people think the principles can only be applied to a manufacturing company with a manufacturing process but to me it can be applied to any company with a continually repeated process.
Take for example the visit that Toyota paid to Ford and the tour around its vast Detroit plant back in the 1950’s. The Japanese witnessed how Ford made cars and how some vehicles had reoccurring faults that appeared in the manufacturing process. At the end of the production line, Ford had an inspection area and any defect vehicles would move to an area for re-work so the individual car could be fixed.
The Japanese saw this and decided that constantly fixing the same fault was ridiculous. They decided it was better to understand the root-cause of the problem and fix that instead. This way the fault could never re-occur. Toyota of course moved to eliminate the re-work area as it was a wasteful process. Why would anyone want to spend time making something wrong and then spend a second amount of time (and money) making it right – today they call it the “right first time” philosophy.
Finding the root cause of a problem is also the heart of a quality system and is intrinsic to a quality process.
This story is important because it is a simple but fundamental element in running a modern “lean” business. You can see this directly translated in to our own organization in the way we receive data from our customers. Our booking forms cannot be submitted until all the necessary basic information is present. We receive quality information to begin with so that the rest of the process stands a chance of being correct.
Some of our competitors still use fax machines with no control over the format or completeness of the information they receive. When our competitors have to pick up the phone and call a customer for them to do re-work and acquire the missing data, DrivenByQ is already ahead and ultimately more cost-effective.
Friday 26 March 2010
Wednesday 17 March 2010
Increased costs, increased opportunities
Yesterday I read that the cost of petrol (and diesel) is likely to increase in the next few weeks to a record high. There is also a planned increase of 3p per litre in fuel duty by the government on 1 April 2010. In addition to this, Manchester Airport just increased their annual car parking costs by 80%. That is a significant increase!
Now, when you get in to the business of airport transfers, you quickly realise there is a LOT of competition in the market place; there are low barriers to entry and most of your competitors never calculate their break even point when setting their prices – a lot of them don’t calculate the turnover they need to continue trading either.
So, you might ask, am I bothered? Am I feeling depressed and gloomy? Well, no. I actually see this as an opportunity to develop our business and sing about the benefits of our fantastic customer service. From day one, we were always going to be the most efficient company in the market place. We embraced new technology and ensured that our business model was not only robust but that it gave the best value to our customers and (importantly) our drivers. We also ensured that we knew our costs and what type of volume we needed in order to operate at a profit.
After the recession of last year, we are now in a much stronger position. First of all we are established in the ‘airport transfer’ market so people know we are reliable and reputable (the growth we have had in the last five years speaks for itself). Secondly, we deal with high volume so a lot of our airport transfer journeys link-up (this gives us economies of scale). And finally, our on-line booking and management system delivers such a saving on conventional office based overheads, we are way ahead of our competition.
In short, although the increased costs of fuel, parking and licensing are significant, there is comfort in the knowledge our competitors are facing the same challenges. There is also a lot of excitement in the fact we can really shine as an efficient company and offer so much more to our own – and our competitors - customers.
Now, when you get in to the business of airport transfers, you quickly realise there is a LOT of competition in the market place; there are low barriers to entry and most of your competitors never calculate their break even point when setting their prices – a lot of them don’t calculate the turnover they need to continue trading either.
So, you might ask, am I bothered? Am I feeling depressed and gloomy? Well, no. I actually see this as an opportunity to develop our business and sing about the benefits of our fantastic customer service. From day one, we were always going to be the most efficient company in the market place. We embraced new technology and ensured that our business model was not only robust but that it gave the best value to our customers and (importantly) our drivers. We also ensured that we knew our costs and what type of volume we needed in order to operate at a profit.
After the recession of last year, we are now in a much stronger position. First of all we are established in the ‘airport transfer’ market so people know we are reliable and reputable (the growth we have had in the last five years speaks for itself). Secondly, we deal with high volume so a lot of our airport transfer journeys link-up (this gives us economies of scale). And finally, our on-line booking and management system delivers such a saving on conventional office based overheads, we are way ahead of our competition.
In short, although the increased costs of fuel, parking and licensing are significant, there is comfort in the knowledge our competitors are facing the same challenges. There is also a lot of excitement in the fact we can really shine as an efficient company and offer so much more to our own – and our competitors - customers.
Thursday 11 March 2010
Transition
Welcome to my first ever blog.
It seems a good time to start a blog because there is so much going on right now that is easy to talk about. Take for instance the recession of last year and how it really made me focus on who our customer is and what is our niche in the market place.
I came to realise that in the past we have maybe had the mindset of a smaller, sole-trader business and we have been competing on the merits of a sole trader. By that I mean we sold what was good about a sole-trader.. For the customer, they always get to talk to the decision maker, they get to know you personally and build an ongoing relationship with a high degree of familiarity. For us, we get to know the customer too and understand the way they work much better.
What happens though when you want to grow your business and make it more professional. How do you start to differentiate yourself from your competitors and deliver a better level of support to your customer. Well, how about looking at the benefits you give as a bigger company while still holding on to the best bits of being a sole-trader.
How about offering a 24-hour support telephone number. How about reassurance that you are not the only driver and will be out working all sorts of silly hours. How about taking more time to listen to your customer and understanding what else you can do to help them. Last year we introduced an on-line booking system that handles our information in a very efficient manner. It gives us the ability to manage our business in a way that a sole-trader could only dream of.
What we haven't done though is find a way of showing new customers just how good the system is and how much extra support it gives a corporate client. Anyway, in order to achieve this, we are currently investigating branding and how to convey our message in a different way. A way that is more reliable and easily understandable by a customer.
I came to realise that in the past we have maybe had the mindset of a smaller, sole-trader business and we have been competing on the merits of a sole trader. By that I mean we sold what was good about a sole-trader.. For the customer, they always get to talk to the decision maker, they get to know you personally and build an ongoing relationship with a high degree of familiarity. For us, we get to know the customer too and understand the way they work much better.
What happens though when you want to grow your business and make it more professional. How do you start to differentiate yourself from your competitors and deliver a better level of support to your customer. Well, how about looking at the benefits you give as a bigger company while still holding on to the best bits of being a sole-trader.
How about offering a 24-hour support telephone number. How about reassurance that you are not the only driver and will be out working all sorts of silly hours. How about taking more time to listen to your customer and understanding what else you can do to help them. Last year we introduced an on-line booking system that handles our information in a very efficient manner. It gives us the ability to manage our business in a way that a sole-trader could only dream of.
What we haven't done though is find a way of showing new customers just how good the system is and how much extra support it gives a corporate client. Anyway, in order to achieve this, we are currently investigating branding and how to convey our message in a different way. A way that is more reliable and easily understandable by a customer.
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