It is therefore imperative to go beyond the present VM efforts to strategically align the organisation and its business design with the evolving customer-priorities, so as to capture profit and value growth. Fig. 5 gives the emerging ‘ten commandments’ for managing value in the 21st Century. Some insights on the emerging Value Vistas are highlighted below.

‘Outperforming’ organisations will increasingly seek ‘Total Employee Involvement’ as a way of life, for continuous improvement of customer satisfaction. They will provide diverse stimuli - such as empowerment, small group activity, training, etc. - and will offer a wide ‘Basket of Values’ to make all employees want to add value and to abhor waste.

Our enterprises have been experiencing large gains out of ‘sporadic’ employee-improvement efforts. For example, BHPV had several Value Circles, who helped their VM Teams in reducing cycle times of their key-processes. At BEL, Quality Control Circles initially had ‘resistance’ problems; well-nurtured, they grew in large numbers. Some of them could solve ‘chronic’ problems of rejections, delays etc. BEL has now emerged as ‘the best VM Practising Organisation’.

In the coming years, the challenge to our organisations will be in learning how to ‘unleash’ employees’ creativity - ‘intellectual capital’, as it is increasingly perceived - in full. They can learn a lot from champions like Toyota’s Ohno, the ‘JIT evolutionary’ and GE’s Welch, ‘the most successful Change Master of this decade’. They can imbibe the strong belief of Mr. M.S. Ram: "VA-VE/VM will act as a catalyst in kindling the creative instincts of employees, who often work in a routine way and perform routine functions. It will add a new dimension to their personality and will lead to the value growth of their organisation."

‘Winning’ companies will increasingly ‘capitalise’ on customer complaints. In the past, many a Top Executive had travelled widely to personally listen to their dealers’/customers’ dissatisfaction. Illustratively, such ‘hard wiring’ with customers by the Managing Director of MRF and the Deputy Managing Director of Mahindra & Mahindra ‘seeded’ their focussed organisational efforts to emerge as Market Leaders in tyres and tractors respectively.

‘Prosumers’ - producers involving consumers in the design of their products - will increase. Becoming more sensitive to evolving customer priority needs will quickly modify their business design to capture value and profit.

Hindustan Lever’s ‘New Surf with Excel Power’, Jenson & Nicholson’s ‘instacolor’, Mafatlal’s ‘dial-A-trouser’ and many others aim to go beyond customer satisfaction to customer delight / enthusiasm / excitement.

Customer satisfaction surveys will be more frequently done to assess the company product’s standing against competition and to improve on it. New Product / Service Development Teams will involve their customers more, for concurrently working fast towards their ‘First Time Right’ designs.

Target Costing will be widely used to ensure profitability of new products. Since it is "Market Price minus Target Return", Target Cost is synonymous with profit planning.

Japanese firms pioneered its use through their cost reduction strategies and VE activities. The goal of their VE Team (also called ‘Cost Assurance’ Teams) is: ‘to use the expertise and ingenuity of people in the company to develop innovative ideas to bring a new product’s cost into line with allowed cost’.

In India, we have been habitually doing more of VM, after our product is out. We will need to develop Target Costing and put in focussed VE efforts upstream, in order to thrive.

For ‘World Class’ Companies, VM practice will become a way of life, since they strive for ever-increasing Customer Satisfaction (value) and Inventory Turns (waste elimination). VE/VM efforts will get intensified on assemblies - particularly on new products / ‘imported’ designs.

They will enormously benefit by the application of DFMA, in addition. Number of parts will get reduced and reliability greatly enhanced. ‘Multiplier’ gains will include reduction of assembly efforts, time and cost. DFMA questions the need for a part to be separate based on three most essential criteria, viz. relative motion, different material / characteristic, and necessary assembly / disassembly.

DFMA is being used in India in small ‘doses’. In the several ‘Synergy From VE+DFMA’ Workshops conducted by the author, one of the assemblies of ‘imported’ design showed the ‘largest’ parts-reduction potential of 47%! ‘Spoonful’ gains from VE+DFMA should become ‘shove-ful’ in the years to come.

‘Thriving’ companies will increasingly resort to outsourcing, limiting their in-house efforts to their ‘core-competencies’. The trend will be towards fewer suppliers, technically ‘sophisticated’ and willing to ‘co-destine’ themselves with customers.

Fewer suppliers will be called to make ‘pre-assembled modules’ and ‘deliver on the line’ just-in-time, many times a day. General Motors, for example, visualised only 15 sub-assemblies for their 15000 parts-car! In the Indian scene, TQM practitioners like Godrej-GE are developing more number of their ‘on-the-line-delivery’ vendors.

Value-seeking companies will involve their suppliers more in their VM efforts to improve customer value. Honda in USA, illustratively, got suggestions from every supplier on their design of ‘1998 ACCORD’; it resulted in ‘shaving’ 21.3% of the cost of producing the car!

In India, the purchasing / procurement function has traditionally been a ‘suspected / hassle-ful’ Cost Centre - with too many ‘unreliable’ suppliers and too many company-personnel ‘chasing’ timely quality supplies. We need to elevate it fast to transform it to a Value Centre, generating more value and profit in the long run. Companies doing it increasingly and swiftly will thrive in the 21st Century.

6. STREAMLINING PROCESS FLOW FOR QUICKER RESPONSE:

Process view is customer orientation, since customers perceive the company only through processes they interact with, such as Order Receiving / fulfilment, billing and servicing. It is truly said: ‘Business is people in relationships, performing processes and customer satisfaction is its end result.’ ‘Manage the process to get the result’ is the emerging new ‘mantra’!

Business Process Improvement / Redesign / Reengineering (BPR) will be greatly deployed, as it is reckoned as ‘the breakthrough operational strategy for Total Quality and competitiveness’. TQM practitioners like Hindustan Motors and Mahindra & Mahindra are already deploying BPR with impressive gains. TQM begot many other new ‘avatars’ in the last decade, such as Total Cost Management, Total Improvement Management and Total Innovation Management!

Process Value Analysis is an explicit step in Total Cost Management. Through ‘IS’ process-mapping, it assesses the cycle efficiency in terms of Value-adding Time as % of total time, and seeks to identify and eliminate the large Non-value-adding Time, consumed by unnecessary delay / inspection / storage /

transport activities. ‘SHOULD BE’ process can reduce cycle time greatly, through the use of Information Technology, among others.

In India, we have been gainfully extending VM application to processes, since ‘IS’ Vs. ‘SHOULD BE’ is built into its ‘Evaluation by Comparison’ technique. Fast Cycle Time will be effected more, in future years, through Process Value Analysis; Quicker Response will be the result!

Outperforming companies will increasingly use Customer Value Analysis techniques - such as Market-perceived quality & relative price profiles, Orders won / lost analysis and Customer Value Mapping - to understand their product’s standing against competition. Independent agencies will be increasingly deployed to do the comparative studies / surveys.

Recent advertisements in the Indian scene already proclaim the ‘superior’ quality features of their product and its ‘lower’ price in relation to competitors’ e.g., cars, colour TVs, computer printers and White goods, where competition is getting more fierce. Their ‘tribe’ will increase in the 21st Century! Customer Value Analysis will greatly help in understanding and serving the market better.

The operational focus of ‘winning’ companies will go beyond TQM to Customer Value Management, since it will help them continuously align their operational strategies with evolving market-needs. They will increasingly become ‘market-driven’ to achieve value growth.

How Customer Value Management differs from TQM and ‘Traditional’ Management is captured in

Fig 6.:

Management Value Management

Stage 1 Stage 2 Stage 3

Customer Conform to Customer Market Market-

Dissatisfaction requirements Satisfaction Standing driven

Illustratively, companies like Hero Honda and TVS-Suzuki are already introducing new ‘Super’ models of two-wheelers, Daewoo and Telco are on to develop their new ‘small cars’ and Kirloskar and L&T are diversifying into new business, such as multipurpose passenger vehicles and tractors. Thriving organisations will more frequently re-assess their strengths / core competencies and align themselves comprehensively with their changing markets.

Companies will seek increased share of Market Value through a better understanding of the Value Migration trends due to their current business designs. Value Migration Analysis will help them to introspect and modify their business designs quickly so as to capture / sustain / protect value and profits, as needed.

Research has shown that the success of a business design in creating value is independent of company size. It gets reflected through positioning among the 3 Value Migration stages, viz. Value Inflow / Stability / Outflow.

Managing transition of value migration from one stage to the other is challenging. Eg. Hero Honda and WIPRO are up ‘on the move’ into the Value Growth stage from Stability; On the other hand, TISCO will now slip down from Value Stability stage into Outflow stage (as Telco did), unless their value erosion is quickly arrested and reversed.

More multi-dimensional strategies will be deployed by organisations seeking to provide superior customer value. They will be more innovatively and

seamlessly ‘marrying’ their people with their emerging technologies, processes, products and services. Not only ‘the harp with so many strings should stay in tune’ but the whole ‘orchestra’ should continuously play ‘in sync’ to the ever-changing ‘tunes’ of the market, thereby exciting the customers to pour ‘value in’.

Our Top Management will be constantly called upon to ‘visibly’ demonstrate their commitment to and ‘constancy of purpose’ of their Value strategies & initiatives. Thriving Companies in the 21st Century cannot do without their inspiring Transformational ‘Contact’ Leadership as well as the conducive ‘Teamsmanship’ amongst all people within and outside the organisation.

The 21st Century beckons our enterprises to become global ‘World Class’ players-winning all the way, by providing superior customer value. They will be required to move quickly beyond Value Management ‘Wave’ to be able to create value and grow.

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