{"id":2336,"date":"2016-10-24T19:41:39","date_gmt":"2016-10-24T19:41:39","guid":{"rendered":"http:\/\/oaklandconsulting.com\/?p=2336"},"modified":"2016-10-24T19:41:39","modified_gmt":"2016-10-24T19:41:39","slug":"reducing-costs-protecting-reputation","status":"publish","type":"post","link":"https:\/\/weareoakland.com\/blog\/reducing-costs-protecting-reputation\/","title":{"rendered":"Reducing cost and protecting reputation"},"content":{"rendered":"

Whether you are a sales director who is fed up with dealing with excess volumes of customer complaints, a quality director struggling to fix the sources of failure or the finance director counting the cost, serial failure of manufactured products when installed in the field is a costly business. The costs of external failure (once the product is in-service) can be up to 10% of sales in companies that have little or no approach to managing the costs of poor quality. Notwithstanding the other risks to customer safety, reputation and brand equity. And even the most reputable companies can pay a heavy price for product failure, as Samsung have recently faced. Whilst the impact of such as event is widespread, companies should not underestimate the significance of reputation damage within specific market segments.<\/p>\n

But the road to recovery is not as painful as might seem, and the prize is worth considering. Every CEO in such circumstances should be insisting on 4 critical success factors to be in place: –<\/p>\n

Set a Vision and Target<\/h3>\n

The journey starts with the business asking where it wants to be in terms of warranty cost. Is it mainly about cost recovery or does the business need to push on to developing a more reliable product as a component of the marketing strategy? At this stage a broad business case should be developed and companies can expect reductions of 50-80% of failure cost over a 2 to 5-year timespan, depending upon context factors.<\/p>\n

Gather data and address key areas<\/h3>\n

Of one thing there is little doubt; in a business struggling with warranty claims there is plenty of data. But is it being systematically gathered and analysed? Without this action can be, at best reactive, and more than likely misdirected. The key here is to filter the data of \u201cnoise\u201d that can mask the key issues, adopt some simple but powerful analysis tools to plot field failure rates over time, and extract the key failures that can determine up to 80% of the costs. A simple total of the cost of this failure should also be in front of the management team at every executive review.<\/p>\n

Build some essential capabilities<\/h3>\n

When problems seem to be coming from all sides, it can seem overwhelming to decide what to do next. Experience of many such circumstances suggests that there are a few capabilities that must be established first: –<\/p>\n