Executive Summary:

The CEO of one of the largest processors of strip mill plates in North America asked us to review their quality assessment and management processes. It was the CEO’s understanding that poor quality production was contributing to the loss of long standing and profitable customers.

Business Problem:

Client loss rates were exceeding seven percent per year for the past five years. New sales were being actively pursued by the sales department and they were successfully adding new clients but the continued losses were resulting in reductions in annual sales.

Business Opportunity:

Increase the revenue stream through the continued sales efforts and by retaining existing clients. Both existing and new clients were profitable.

Solution:

Customer Interface with both lost and existing clients and analysis of the results provided evidence that quality was not the issue. It became apparent that the client losses were attributed directly to flawed accounting, logistics and operations systems.

Ex-clients were asked if they would return to the company if those digital systems were fixed. Eighty-five percent of those companies responded that they would and, in fact, wanted to return based on the high quality of the specialty steel products manufactured.

Analyze existing model and create a new business model for the customer experience.

Benefits, Goals and Measurement Criteria:

Increased annual revenue, sustainable client growth, annual client loss reduced to 2% in the first year after the innovations are successfully implemented.

How We Helped:

Through our analysis of the problem we were able to identify the true reason(s) for the loss of clients. Asking the right questions of the right people held the answers.

Creating a system for real time client communications using strategic account management protocols that would prevent this type of problem from happening again. The sales team was successful in selling; the operations team wasn’t so successful in retaining the clients.

Next we architected the accounting, logistics and operations systems that would ensure that clients were able to easily purchase products from the manufacturer. This new system would result in reduced client loss, increased annual revenues, more efficient delivery of manufactured products and a sustainable plan for future growth.

Results, Return on Investment and Future Plans:

A major result of this engagement was to encourage the company to Know Their Clients, an asset they couldn’t afford to lose. Better accounting, logistics and operations systems would help but if they continued the path of not knowing their clients and their concerns, questions, problems and what made them happy all the new software would never fix the problem.

The ROI of the proposed updated systems had a direct match to the retained client numbers. The future plans were to have a strategy for account management that would never allow this to happen again. The business units including manufacturing, accounting, logistics and sales would meet frequently with the IT unit to discuss their needs, new technologies that might meet them and what problems they were faced with. These conversations were a change in the corporate culture from reactive to problems to being proactive and meeting and exceeding client needs.

 

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