There are two distinct types of customers– external and internal. An external customer can be defined in many ways, such as the one who uses the product or service, the one who purchases the product or service, or the one who influences the sale of the product or service. For instance, McDonald’s determined the customers be the child when they introduced their “happy meals.” The child never paid for the meals but the child influenced the sale. Oftentimes, parents purchase lawnmowers and yet the teenage children use the lawnmowers. The identity of the external customers is not always easy to determine.
An external customer exists outside the organisation and generally falls into three categories– current, prospective and lost customers. Each category provides valuable customer satisfaction information for the organisation. Every employee in an organisation should know how his or her job enhances the total satisfaction of the external customers. Performance should be continually improved in order to retain existing customers and to gain new ones.
An internal customers is just as important. Every function, whether it is engineering, order processing, or production, has an internal customer– each receives a product or service and, in exchange, provides a product or service. Every person in a process is considered a customer of the preceding operation. Each worker’s goal is to make sure that the quality meets the expectations of the next person. When that happens throughout the manufacturing, sales and distribution chain, the satisfaction of the external customers should be assured.
All processes have outputs which are used by internal or external customers and inputs which are provided by internal or external suppliers. Each supplier performs work that produces some service or product that is used by another customer. As shown in figure 15.3, each forms a link in the customer/supplier chain where every chain ends with an external customer and starts with an external supplier. Every employee throughout the organisation is part of the chain of internal customers and suppliers.
A basic concept of TQM is an unwavering focus on customers, both internal and external. Most of the employees know about the external customer or end user but may not think of other employees as internal customers of their output.
In an ideal organisation, every employee would have direct contact with customers and be effective at meeting their needs. But the reality is that most of the employees are shielded from customers by organisational layers. For example, the first-line supervisor in a computer factory may never speak with the businessperson who buys and depends on the organisation’s product. However, that supervisor and countless other employees who lack direct contact should still contribute to the businessperson’s satisfaction.