As highlighted in a November 2012 HBR blog post, the Israeli company Netafim captured almost one-third of the “seemingly commoditized” micro-irrigation equipment market by changing its business model to better address the needs and constraints of its customers. According to the authors, “Netafim went so far as to change [its] mission statement from ‘making the best drip irrigation equipment for customers’ to ‘helping the world grow more with less’, an objective far more aligned with the objectives of its customers, the farmers [emphasis mine].”
This change in mission statement and objective reminded me of the Jaguar and Unipart Logistics case study I wrote about a few years ago. Jaguar and Unipart created the following shared vision statement, which they review at the start of every meeting between the two companies:
“To support Jaguar dealers in delivering a Unique Personal Ownership Experience to Jaguar Drivers worldwide, ensuring industry leading owner loyalty through partnership and world-class logistics.”
This shared vision statement answers two basic questions: Who is the real customer that defines the success of both companies? And how do you measure success? In this case, the real customer is every person that drives a Jaguar, and the overriding measures of success are providing “a unique personal ownership experience” and “owner loyalty.”
Determining how to measure “ownership experience” and “owner loyalty” was part of the exercise the two companies went through, along with determining how logistics and other parties in the supply chain impact those measures and what defines world class (improving JD Power and Associates rankings became one of the measures). But the key takeaway is that this shared vision statement aligned both companies toward a common goal that both unified and transcended the interests of each company.
The bottom line: a 3PL’s customer isn’t just the company that signs the contract, but also its customer’s customer — at least that’s the perspective 3PLs and their manufacturing and retail customers should take when defining their relationship and objectives (particularly for strategic partnerships). Ideally, 3PLs and customers should develop a shared vision statement that aligns with the objectives and desired outcomes of the end customer, which in many cases is the consumer.
Photo: ryancr, Flikr