All things considered, a C+ might be just fine

Statistics don’t lie, but conventional thinking might lead to the wrong conclusions about customer ratings. You tell us.

At its Quarterly Forum in San Jose, California, last week, Technology Forecasters reported the results of the 2007 edition of its “EMS, ODM and Distributor Report Card: Customer Satisfaction Survey.” On five criteria OEMs gave their EMS and ODM partners mostly boring grades – a lot of C’s and C+’s, few A’s and no F’s. The results are consistent with OEM ratings from previous TFI studies.

And, perhaps adding insult to injury, most OEMs did not consider their primary EMS or ODM partner to be “best in class,” except on one of the criteria graded —responsiveness to change.

What shall we make of this?

The results caused a rousing discussion among TFI members at the Forum. One conclusion: OEMs are loath to give their supply chain partners anything higher than average marks because they want to keep the pressure on them to deliver better, faster, and cheaper. Some OEMs represented at the Forum agreed this could be the case.

The grades also prompted an interesting reaction from the EMS folks at the Forum: If an EMS company is getting all A’s, maybe it ought to be paid more by the customer. Think about it. If the EMS is getting C’s, then maybe the effort and expense it is expending is just right. Forget about “delighting the customer” when margins are razor thin. There’s some kind of weird logic to that.

We’re interesting in your comments. Be sure to identify whether you’re from the OEM or EMS side of the equation. Are C’s and C+’s the sweet spot from everyone’s perspective?

Posted by Bill Roberts, December 14th, 2007