Implementing a Continuous Improvement philosophy in today’s fast-paced digital world is a must and should be addressed using a slightly different approach from that of a traditional brick & mortar business. Rather than fostering lengthy improvement projects, a high-tech business can take a data-driven approach with more rapid process improvements that incorporate real-time, event-driven analytics for effective decision making.
Enabling employees to use proven optimization techniques enables rapid change according to micro-economic shifts which can occur very rapidly – as occurred with COVID19. Often in TECH, band aid solutions are implemented to respond quickly to customers, but these must be optimized and automated over time as the change requires operationalization.
For technology businesses, operations need to remain flexible due to variable workforces and changing accessibility of massive amounts of data. Traditional approaches soon become ineffective or obsolete, creating the need to adapt using continuous improvement frameworks. Digital Transformation is key, as organizations require more cross-functional and geographically diverse locations to work together using digital processes which have been automated to reduce duplication and cycle time. Remote-based Kaizen approaches can have significant impact in connecting employees who need to work together across multiple boundaries (geographic, functional and customer/supplier) to drive change.
Client Success Stories
How does Amazon measure sellers for long-term success?
A peak at Amazon’s quarterly results shows they use free cash flow, sales, operating and net income to demonstrate year over year success. Amazon remains relentlessly focused on their customers as the drivers of long-term success. To enable seller partners to understand this, Amazon clearly defines metrics on their “Account Health page”.
“To ensure we are delivering a great experience for our customers, Amazon might take action on these metrics if they do not comply with our targets. We regularly review the performance of all sellers and notify them when they are off-target. The intent of this review is to give you the opportunity to improve your performance before the issue affects your ability to sell. Occasionally, seller accounts with very poor performance are immediately deactivated.”
Order Defect Rate
The Order Defect Rate (ODR) is a key measure of your ability to provide a good customer experience. It includes all orders with one or more defects represented as a percentage of total orders during a given 60-day time period. The following are the types of order defects:
An A-to-Z Guarantee claim that is not denied Credit card chargeback
The Cancellation Rate (CR) is all seller-cancelled orders represented as a percentage of total orders during a given 7-day time period. CR only applies to seller-fulfilled orders.
This metric includes all order cancellations initiated by the seller, with the exception of those requested by the customer using the order-cancellation options in their Amazon account. Pending orders that are cancelled by the customer directly on Amazon are not included and do not factor in the seller’s CR.
Late Shipment Rate
The Late Shipment Rate (LSR) includes all orders with a ship confirmation that is completed after the expected ship date. LSR is represented as a percentage of total orders over both a 10-day or 30-day period. LSR only applies to seller-fulfilled orders. The following results can occur due to an order with a confirmed late shipment date:
Increased A-to-Z Guarantee Claims
Negative customer experience
Our policy is that sellers maintain an ODR under 1% in order to sell on Amazon. An ODR above 1% may result in account deactivation.
Our policy is that sellers maintain a CR under 2.5% in order to sell on Amazon. A CR above 2.5% may result in account deactivation.
Our policy is that sellers maintain an LSR under 4% in order to sell on Amazon. An LSR above 4% can result in account deactivation.