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Realisation Introduction

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Customer/Supplier real estate mapping is a technique for initiating process improvement activity by giving a market such as property an overall orientation or direction. It creates a picture of a business or business unit’s functions to which managers and staff can continually return to confirm that their improvement efforts are focused on the right things. The map itself is a specialised form of flowchart, with boxes for all your customers and suppliers showing your relationship to them. It is divided into quadrants marked `ultimate’, `immediate’, `internal’, and `suppliers’ (see the example below). Once completed, the map allows you to go on to identify the customer /supplier and product /service attributes which need to be monitored, measured and controlled to bring about improved performance.

Before attempting to draw the map, there are some critical concepts to be understood. First, why are customer and supplier relationships important? Because process improvement activity depends for success on,

  • the relationship between the business and its customers

  • the relationship between the business and its suppliers

Second, change for the better only comes about when people change their behaviour, and apart from you, the only other players are either customers or suppliers. This makes it important to identify these relationships clearly. Every person in an organisation has an immediate customer, regardless of who the organisation’s ultimate customers are, and every person in an organisation relies on others – that is, suppliers – to do their job effectively.

Who are customers?

Customers are the whole reason for continuously improving processes. It is they who decide whether your product or service offers the best value for money when they make their purchase decisions, and their purchase decisions determine whether your business will be a success or not.

While the importance of this relationship is obvious, there are a number of factors which complicate it. Many companies do not deal directly with the ultimate users of their products or services; they deal through intermediaries. These intermediaries (such as wholesalers and retailers) have needs which are as important to satisfy as those of the ultimate customers. In fact, such intermediaries are often in a better position than you to know how the ultimate customer feels about your product or service.Your ‘business unit’ may also be part of a larger organisation which means there are even more layers between what you and your staff do and the ultimate customer. You may provide an internal support function (such as Administration, Personnel or Accounting) so your contribution to product or service quality will be even more difficult to identify. What all this means is that a customer for you is anyone to whom you provide products or services, whether directly or indirectly.

Who are suppliers?

Suppliers are all those whose input you rely on to do your job effectively. Obvious suppliers are those outside the organisation from whom you acquire raw materials for production processes, stock for re-sale, capital equipment or equipment consumables. Not so obvious suppliers are those who provide you with services or with information essential for you to do your job.

Identifying suppliers external to your company is one thing, but what is often overlooked is that all those who are inside the company and on whom you rely to do your job are also your suppliers. The importance of this realisation is that if you do not treat internal sources of input as suppliers, it is unlikely that you will develop the attitudes necessary to generate their support for your improvement efforts.

Draw the map before you do anything else

Complete a Customer/Supplier map when you begin your improvement activities, or when you wish to get an overall view of where your improvement efforts are focused. Review the map whenever you need to affirm your key customer and supplier relationships, and revise it when,

  • there is a major change in your strategic direction

  • new products or services are added

  • major changes are made to production processes which require different supply inputs

How to draw the map

Customer/Supplier mapping is essentially a flowcharting exercise, with a number of key differences. Instead of charting steps in a process, you chart the relationship between each element of your operation and your customers and suppliers. Boxes on the chart will identify:

  • ultimate and immediate customers

  • functions, departments or persons within your business or business unit

  • suppliers

Follow the steps below to complete your map.

  • Begin by taking a sheet of paper and ruling three lines to divide it into four sections. If you are developing the map with a team, draw the lines on a whiteboard or flipchart.

  • Label the four sections from top to bottom, `ultimate’, `immediate’, `internal’, and `suppliers’

  • Go to the part of the map labelled `internal’ first and write in the names of each department, section, or function of your business unit or operation, drawing boxes around them as you go. (In the example shown below of a warehousing operation, the internal sections are identified as `Goods Receiving’, `Goods storage’, `Goods Despatch’, etc.)

  • Do not connect the boxes with lines at this stage because you will need to give some thought to the customer/supplier relationships which actually exist. These are not as obvious as may be first thought.

  • Having identified and written down the names of each of your business unit’s sections, identify and note in the part of the map labelled `immediate’ the types of persons, types of companies, or other departments (that is, departments within your company but outside your unit) who directly initiate your unit’s actions. (In the example below, these are `Company sales/order processing dept’, and `Company product management /technical dept’.) These are your immediate customers.

  • Identify and note in the `ultimate’ part of the map, the names of the types of persons or types of companies who initiate action by your immediate customers. Remember that the mapping process seeks to identify customer/supplier relationships and these do not necessarily follow the physical flow of goods. (In the example below the ultimate customers are amateur and professional photographers, photographic retailers, and film processing laboratories.)

  • Connect all the boxes drawn on the map with lines and arrowheads to indicate the direction in which information about customer needs flows. (In the example below this is illustrated by following the lines from amateur and professional photographers who talk to retailers, who in turn talk to the Company’s sales/order processing staff, who in turn send instructions to the Goods picking, packing and despatch section, etc.)

  • Complete the `suppliers’ part of the map as the final stage of the process. The lines will terminate with suppliers because these are the persons, companies, or other departments on whom your business unit places its demands.

The arrowheads in the map point to the supplier in the relationship – that is, the direction of the arrow will be from the customer to the supplier. This emphasises the obligation on suppliers to constantly meet the needs of those who initiate their tasks – their immediate customers – in order to satisfy the needs of the ultimate users of the products which pass through their hands.

An example of a Customer/Supplier map appears below and is followed by a full explanation of the elements and relationships described in it. The map was drawn for the warehousing department of a photographic equipment, film and processing chemicals distribution company.

The map shows that for this business unit (which is the warehousing and distribution department of a larger organisation), its ultimate customers are the customers of the organisation as a whole – amateur and professional photographers. In all its activities, the staff of this department must be mindful of the needs of these customers.

Quality parameters which readily spring to mind for these ultimate customers, over which this department has control, are:

  • the way goods are handled, stored, and transported so as to prevent damage or deterioration

  • whether the correct goods are delivered in the correct quantities

  • whether goods are available to customers when required

  • ensuring goods with a limited shelf life are not delivered when already out of date

In order to see that these parameters are met to the highest standards, the warehousing department must ensure that its relationships with its immediate customers are sound. The map shows that the warehousing department’s immediate customers are the company’s order processing and product management/technical departments. Why is this so? The word `immediate’ in this situation is used in its true sense to mean `not mediated’ or `direct’. So an immediate customer is someone with whom you deal directly who is either the user of your products or services or who represents the interests of the user of your products or services. The company’s Sales/order processing staff talk directly to retailers about their needs and pass on this information to the warehouse. They are acting on the ultimate customer’s behalf and so must be treated by warehouse staff as if they are the customer. The same applies to the company’s product management/technical staff who act on the ultimate customer’s behalf by setting specifications for how to store goods properly, how to pack them so as to prevent damage and how to detect and correct defective goods.

Within warehouse operations, or `internal’ to the warehouse, the various sections act as suppliers to each other. Goods receiving section respond to the needs of Goods storage, who in turn respond to Picking, packing and despatch section and so on. If each part of the organisation treats the people to whom it responds immediately as its customers, then the whole organisation is able to continuously focus on delivering the best quality and value products and services to its ultimate customers.

Finally, the map shows the suppliers outside the warehousing department on which it relies for input. In addition to manufacturers, packaging materials companies, materials handling equipment companies, and carriers, these suppliers include the company’s data processing department which provides the stock control system used by the warehouse.

The benefits of this mapping process are that you will have,

  • clearly identified immediate customers, so the tasks of identifying needs, measuring effectiveness, and solving problems can begin in the right places

  • a much clearer picture of who you need to speak with to clarify customer needs, and product or service specifications

  • clearly identified those on whom you rely to do your job effectively – your suppliers – so you can begin work on communicating your needs to them more effectively, measuring their effectiveness, and solving problems