Monday, April 29, 2013

The Changing World...

Mad Men is an award winning television show about a Madison Avenue advertising firm set in the 1960's.

It chronicles the lives of the several characters who are employed by the firm including partners, creative directors, account representatives, as well as the multitude of administrative support such as secretaries, copy writers, artists and accounting types.

The show fascinates me not only for the human drama, but because it accurately and visually describes life in the 1960's both personally and professionally.

It's incredibly hard for me to imagine conducting modern business without personal computers (desk tops and/or portables), mobile (and now smart) phones, e-mail, search engines, spreadsheets, Skype, and/or electronic documents.

These modern conveniences have allowed an explosion in personal productivity, virtually eliminating the need for the army of support personnel previously employed at most businesses.

It also has depersonalized, in many ways, the way we now conduct business.

It no longer makes economic sense to spend time face-to-face with customers and suppliers. Electronic communication is virtually free and highly efficient in being able to reach a mass audience.

Personal relationships have taken a back burner position as we try to find more ways to squeeze more and more time out of our days and nights.

This new reality was brought to my immediate attention several times these last few days.

This week I'm traveling in Asia visiting customers and suppliers.

One of the first things I've noticed on this trip is the shrinking population of employees at many of the factories that I've visited.

This seems especially true on the assembly lines, where I've noticed that many of the functions that were once done by hand are now being performed by robotic automation.

When I inquired about these changes, I was told by the factory managers that the decision to go to automated assembly was being driven by two main factors:
  1. While there is a fixed cost typically associated with factory automation, those costs have been significantly decreased over the last several years as there are now more and more manufacturers of industrial automation equipment.

    One just needs to purchase the machinery, set it up and feed it raw material (okay... granted there are a few more steps than that... but this is essentially what happens).

    Whereas before it might have taken 100 workers to complete 1,000 finished parts per day... it now only takes perhaps 5 workers.

    The savings of not requiring an additional 95 workers quickly helps to pay for the cost, set-up and maintenance of the machinery. This is especially true when you consider the quickly rising salaries, mandatory benefit costs, training, and additional factory floor space to set up a production line.

    Automated machinery can be run continuously for hours... without the need for coffee and meal breaks.
  2. The second major benefit of using factory automation is that the product quality can be tightly controlled.

    What I saw on this trip, was that there were more factory personnel associated with quality control and testing, than in actual production.

    At one time, there was an adage that said that you never wanted to purchase a car made on a Monday (due to perhaps the lingering effects of weekend reveling)... or on a Friday (due to perhaps the anticipation of weekend reveling).

    This same thought process could be extended to many different other industries. Anytime there is a human element added to construction and assembly of equipment (especially in a monotonous assembly line), there is a possibility for human error.
The most immediate thought that entered into my head as I was heading back to my hotel, was now that the cost of labor was quickly being removed from the cost of goods (or at least marginalized), production in low-cost labor countries was no longer economically essential for businesses to compete.

It would be just as easy to set up a fully automated line in the U.S. as it would be in China (or any other low-cost labor provider).

The cost drivers now have become the transportation of raw materials to the factory and finished goods to the markets.

The typical factory assembly line worker of the early 21st century has now become somewhat synonymous with the secretarial pools of the 1960's. Technology has effectively killed off the millions of jobs previously needed to perform manual labor functions.

So where will all of these displaced workers go?

One thought is that the abundance of manual laborers will now find employment in the service industries.

If they do, their employers might want to take a lesson in customer service from of all people... the Chinese government...

Now when I think of one of the most joyless positions ever created it is that of the customs and immigration officer.

Now picture in your mind for a moment, a customs and immigration officer, in full military dress regalia complete with campaign ribbons, sitting behind a sterile governmental desk in communist China as you disembark from a plane and attempt to enter the country.

You hand him your passport and immigration form.  He looks up at you, smiles, and asks you how you're doing this morning in fairly decent English...

You're now somewhat taken aback thinking that perhaps this is a trick question used to expose smugglers and/or felons on the lam.

Looking back at him, fake a smile and respond, "I'm doing fine... thank you".

He looks up at you... comparing your picture to that of your passport... smiles again and then politely asks you how long you're planning to stay in China.

You respond, "Umm... just 24 hours".

He hands you back your passport and tells you to enjoy your stay in China.

As you get ready to leave you notice a box sitting on his desk with 4 buttons now blinking. 

You look down at the box and at the 4 button choices...

- Red - Poor Customer Service
- Red - Checking Time Too Long
- Green - Satisfied
- Green - Greatly Satisfied

You select "Green - Great Satisfied"... not because you're afraid that pushing a red button will cause you to be sent off to a Chinese prison somewhere in the Gobi Desert... but rather because you are indeed "Greatly Satisfied" with the customer service that you've just received.

Can you even remotely imagine having a box like this installed at a government office in the United States?... say at perhaps the DMV... or maybe as you're exiting a TSA airport checkpoint?

Why would the government be interested in how its employees are treating its customers... you know... the taxpayers?

Unfortunately, the unions would NEVER agree to anything like this...

It would never happen... PERIOD!

In fact, I would go so far as to say that providing immediate customer service, like this box offers, would never exist even in the most progressive, customer service centric retail outlets - think Nordstrom's or The Container Store...

...but you can only imagine how the service sector might improve...

Attain a 98% approval rating... and you get a daily bonus...
Good for the employee... an opportunity to make more money...

Good for the business... happy customers come back and spend more money...

Good for the customer... receiving better service makes for a better shopping experience...

I've been racking my brain to try and figure out a method that our customers can provide us with some simple, immediate, and anonymous feedback for us...

If anyone knows of a good solution... I'd love to talk with you...

The 1970's brought a revolution to the modern office through advances in technology... the 1990's the revolution occurred in manufacturing through outsourcing...

...perhaps now is the time to think about revolutionizing the service sector and bringing back the personalization of fantastic customer service (just without the 3-martini lunch)...

Then maybe we can go from being Mad Men to happy customers...    

Thank you for your support of OptiFuse, where we encourage your feedback... because it can only help us to perform better in the future.

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