KPIs, which are key process indicators, have long been used in the industry across the United States and across the world.  While they are certainly commonplace practice in financial services and healthcare companies, they are often most closely related with the manufacturing industry.  In the manufacturing industry, KPIs such as cycle time, yield, throughput, work in progress, and downtime are commonplace in this day and age.  The newest KPI that many large manufacturers have begun to employ are Amazon reviews.

Companies around the world have grown to understand the impact the reviews on their products have on the customer’s perception.  For competitors, if two almost identical products exist, research has shown that the customer, often times, will blindly look at the Amazon reviews for both products and purchase the product with better Amazon reviews.

Anna-Katrina Shedletsky, of Forbes, had the opportunity to sit down with senior leaders in various consumer electronics companies to dive more into this new KPI.  In a conversation with a senior manufacturing operations leader at one of these global consumer electronics company, the leader went as far as to say that “the most important post-shipment metric is Amazon reviews.”  While the implications of each review for various products is not as black and white as the reviews themselves, this senior leader and others across the industry know that the reviews help facilitate or reduce sales.

In addition to this over-arching insight, Shedletsky learned of two more ways in which this new KPI has an impact on businesses both large and small.  The notion that the earliest reviews are the most important runs true to companies across the industry.  Customers are waiting to hear how others perceive the newest gadget or gizmo before they make the move to buy it themselves.  This notion presents an even greater challenge as many times, the products which are first off the line are most susceptible to defects.  In the past, manufacturers embraced more of the idea that they should ship as many products as possible, as quickly as possible; but, with Amazon reviews ever-present to critique the product, this strategy is no longer as viable of an option.

The problem of identifying issues and ensuring the first reviews are positive leads manufacturers to work towards perfection, thus hoping for “perfection” in their Amazon review.  What’s sometimes a bit more difficult to accept is that perfection is unobtainable in many cases.  While manufacturers may work towards a 6 sigma process, meaning only 3.4 defective parts per one million produced, there are problems that will get to the customer.  Unfortunately, some of these defects can lead to product recalls and those poor Amazon reviews.  In fact, a recent study by Instrumental Inc. found that dark yield rates are at about 4% for the total units shipped to the customer.  4% is certainly not a trivial amount, but not all defects shipped necessarily equate to a bad review.

Brands have taken steps to compensate for the issues that arise in their processes and result in the poor customer reviews.  While the systems in place in many manufacturing are out-of-date in terms of improving quality, using the review as a KPI is a step in the right direction to make the problem visible.

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