Operations strategy hinges on understanding what customers value most. Order winners are the key factors that make customers choose your product, while qualifiers are the baseline requirements to even be considered. This distinction is crucial for prioritizing improvements and staying competitive.

Identifying and adapting to changing order winners and qualifiers is an ongoing process. By aligning operations with these factors, companies can focus resources on what truly matters to customers, giving them a competitive edge in the market.

Order Winners vs Qualifiers

Defining Order Winners and Qualifiers

• Order winners directly contribute to winning business by causing customers to choose one company's products or services over competitors
• Order qualifiers establish baseline criteria for customer consideration as a potential supplier without necessarily differentiating the company
• Terry Hill developed the concept of order winners and qualifiers as part of a framework for aligning operations strategy with market requirements
• Order winners demand superior performance and continuous improvement
• Order qualifiers require consistent performance at industry-standard levels
• Distinguishing between order winners and qualifiers helps prioritize operational improvements and allocate resources effectively
• Companies must excel in order-winning criteria while maintaining adequate performance in order-qualifying criteria to remain competitive

Industry-Specific Examples

• Manufacturing industry
  • Order winners include product quality, customization capabilities, and speed of delivery
  • Order qualifiers involve competitive pricing and basic product reliability
• Service industry
  • Order winners encompass customer experience, personalization, and convenience
  • Order qualifiers comprise accessibility and service consistency
• Technology sector
  • Order winners often involve innovation and cutting-edge features
  • Order qualifiers include user-friendliness and compatibility
• Healthcare industry
  • Order winners typically include quality of care and specialized expertise
  • Order qualifiers involve patient safety and regulatory compliance
• Retail sector
  • Order winners commonly encompass product selection and shopping experience
  • Order qualifiers involve competitive pricing and product availability
• Logistics industry
  • Order winners usually include reliability and speed
  • Order qualifiers comprise track-and-trace capabilities and basic insurance coverage

Identifying Order Winners and Qualifiers

Market Research and Analysis

• Conduct continuous market research to identify industry-specific order winners and qualifiers
• Analyze customer feedback to stay aligned with evolving preferences and expectations
• Study competitor offerings and performance to benchmark order winners and qualifiers
• Utilize surveys, focus groups, and data analytics to gather insights on customer priorities
• Monitor industry trends and technological advancements that may impact order winners and qualifiers
• Engage with sales and customer service teams to gather front-line insights on customer decision factors
• Analyze lost sales data to identify potential gaps in order winners or qualifiers

Evaluation and Prioritization

• Assess the relative importance of different product or service attributes to customers
• Quantify the impact of potential order winners on market share and profitability
• Evaluate the cost and feasibility of excelling in specific order winners
• Determine the minimum performance levels required for order qualifiers
• Prioritize order winners based on their potential to differentiate the company in the market
• Balance the focus on order winners with the need to maintain performance in order qualifiers
• Regularly review and update the list of order winners and qualifiers to reflect market changes

Dynamics of Order Winners and Qualifiers

Evolution Over Time

• Order winners and qualifiers evolve due to changes in customer expectations, technological advancements, and competitive landscapes
• Former order winners can become order qualifiers as markets mature and competitors catch up
• The rate of change varies by industry (technology experiences rapid shifts, traditional industries change more slowly)
• Economic conditions, global events, and societal changes can dramatically alter the importance of certain order winners and qualifiers
• The transition from order winner to qualifier often follows an S-curve pattern (rapid adoption followed by market saturation)
• Companies must continuously monitor market trends and customer feedback to anticipate shifts proactively
• Historical examples illustrate this dynamic nature (quality transitioned from order winner to qualifier in the automotive industry)

Adapting to Changes

• Implement systems for early detection of shifts in customer preferences and market trends
• Develop agile operations strategies capable of quickly adapting to changing order winners and qualifiers
• Invest in flexible technologies and processes that can accommodate evolving market requirements
• Foster a culture of innovation to continuously develop new order winners
• Establish cross-functional teams to rapidly respond to identified changes in order winners and qualifiers
• Regularly reassess and realign operational capabilities with current market demands
• Develop scenarios and contingency plans for potential future shifts in order winners and qualifiers

Impact on Operations Strategy

Strategic Alignment

• Order winners and qualifiers directly influence prioritization of operational capabilities and resource allocation
• Aligning operations strategy with order winners and qualifiers achieves competitive advantage and meets customer expectations
• Design operations strategies to excel in order-winning criteria while maintaining adequate performance in order-qualifying areas
• Link performance metrics and key performance indicators (KPIs) closely to identified order winners and qualifiers
• Tailor production processes, technology investments, and capacity decisions to support specific order winners and qualifiers
• Design supply chain management strategies to deliver on order winners while consistently meeting order qualifier standards
• Prioritize continuous improvement initiatives based on potential impact on enhancing order winners or maintaining qualifiers

Operational Decision Making

• Use order winners and qualifiers as a framework for making trade-offs in operational decisions
• Allocate resources preferentially to capabilities that support key order winners
• Invest in automation and technology that enhances performance in order-winning criteria
• Design quality management systems to ensure consistent performance in both order winners and qualifiers
• Develop training programs to build employee skills aligned with critical order winners
• Implement performance measurement systems that track progress in both order-winning and order-qualifying criteria
• Establish supplier selection and management processes based on their ability to support order winners and qualifiers