It’s Simple Math
Pickers Travel Less = You Save Money
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Comparison
Path Optimization 305.2 feet - 33.3%
Location Sequence 457.7 feet 0.0%
Pick Location
Pick Path
AA
AA
gineer backward in your business and
make precise decisions about where to
put your resources. You take the guesswork out, and you get rid of the over- and
under-servicing that’s been going on for
about half a century. We don’t want to be
giving too much service to customers who
don’t appreciate it. On the other hand,
we’ve got loyal customers out there who
don’t make much noise. We don’t want
to underservice them either. It’s a matter of switching those resources around
but having a frame of reference to guide
that—that’s where the “outside in” comes
from. It’s about clever segmentation of
the marketplace using methodologies different from what most companies have
used for years.
[One of those methodologies involves]
getting away from just looking at companies as what they are institutionally—
for example, being a traditional retailer.
What we’re saying is within an institution, say retailing, you can have six different companies that have come from
different backgrounds and histories, and
different leadership styles that will have
slightly different expectations of their
supplier. The fact that they are all retailers
and they are all institutionally the same
doesn’t mean they have the same expectation, and that’s the sort of nuance you’ve
got to work with.
QDo you have any concrete tips or advice for companies on how they
can start this process?
A I think the starting process has to be, go out and do some conjoint analysis
[a survey-based technique used in market
research that helps determine how people
value different attributes]. Get your marketing people to help you do a trade-off
analysis. Try to segment your customers
using behavioral techniques, and then
work your way back inside the business.
It’s important to do that [analysis]
because otherwise it will just be a matter
of your opinion versus someone else’s.
And you might lose that battle. Whereas
if you can get in and document and map
the structure of your market, and then
take it back inside, people cannot argue
with that. You can say “Well that’s what
it is, whether you like it or not. That’s the
structure of our market. Now, are
you going to work with me to start
the whole process of transforming
our business?”
If you don’t do something like
that, you can argue interminably
inside the business. It can turn into
my opinion versus your opinion, and
you go around in circles. And that’s
the worst possible thing because the
name of the game today is you’ve
got to make faster decisions. If you
can do that and get that sort of
momentum, you can pretty much
out-decide and out-market any of
your competition.
