Next message: Jim Lynch: "Re: lv-ab: Re: holding tanks"
At 08:31 AM 09/24/2001 -0400, Richard Goodwin wrote:
>But such calculations, even though they may teach them in the world's B
>schools, are obviously flawed if you were to consider the true cost of
>production, PLUS the cost of warranty repairs due to cheap components,
>PLUS the cost of ongoing repairs.
>>> snip<<<
> I don't know if all that applies to all electronics today.
>Dick
REPLY
Dick, you forgot to mention the cost of lost business due to customer
loss of confidence in a product line.
This is an intangible that cannot easily be factored into a spread sheet
that accountants are so fond of using.
Companies that are run by accountants who really do not understand the
market place tend to hire freshly minted MBA's who also lack real workd
experience. They tend to create an illusion of profitability by
juggling spreadsheet numbers unitl one day they suddenly realize the
products are no longer selling because the consumer has lost confidence
after seeing one too many failures or had one too many bad experices with
customer service.
In the current business climate of downsizing and restructuring, what
seems to be escaping the MBAs and accountants is the fact that they are
throwing away their company's biggest and most valuable asset. Namely
people with real world experince who can say, this didnt work out well
befoer because of . . .
There is no real advantage in saving a couple of dollars in production
cost if the end result means fewer sales because of ticked off
customers.
There is an adage that a dis-satisfied customer will tell many more
friends and acquaintances of their bad experience than they will tell
about a normal ( good ) experience. This bit of folk lore is still true.
Once a company acquires a reputation for poor quality, it takes years to
undoo the damage.
When the Ford motor company had a rust problem for a couple of years, the
effect was felt for more than ten years.
I still feel this had a major influence in the sucess of the japanese
imports which gained ground at the same time Ford had their rust problem.
Cheers
Arild
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