Surveys covering all types of
businesses report consistently weak results for quality programs. About 5% of
all firms typically report breakthrough results; 20% + are still in optimistic
pursuit, but not yet making compelling guarantees; but, over 60% are flagging.
Because distribution businesses are
less complicated than manufacturing, the following short-cuts should help
jump-start any distribution center's TQM program.
“total” to “customer” quality management (CQM). Identify the most important
customers' top four service needs, and then focus on the service processes that
support those needs.
all employees the following strategic points:
is the company's #1 target niche of customers;
are the top most profitable customers within that niche. Have
employees memorize their names and put pictures of the customers on the wall if
appropriate. This will personalize who is paying everyone's wages.
and measure on the wall the top four or more service standards that customers
value. All distribution customers want in this logical order - fill rates, zero
errors, on-time delivery or performance and immediate heroic recoveries of
mistakes. Beyond these standards each customer niche is apt to have one or two
compelling service niche needs.
employees dislike poor service in their personal lives they don't knowingly
want to provide poor service on the job. Tell them why and how to score
“service” and get out of the way.
making the temporary “service investment” to free-up a “service manager”. This
job will be to-gather and post service measurements daily, rethink the
order-fulfillment process to handle order surges, and to reduce errors.
happens every tenth day when an order surge overwhelms the order fulfillment
pipeline of inside sales to data entry to the warehouse to trucks to customers?
Unless the people in and outside of this process pipeline are cross-trained,
pre-scheduled and precommitted to handling surges, 100% on-time delivery can
hint to solving this pig-through-the-python problem is that people downstream
and outside the process must jump on the surge and ride it through multiple
steps of the process. If you have trucks, for example, find a good trucking
company to outsource some or all of the delivery to ensure that at least twice
the normal daily volume can uneventfully be delivered on-time - guaranteed!
an error occurs or an upset customer calls, whoever picks up the call should
own it and be able to immediately solve it to the customer's stated
satisfaction at least 80%+ of the time. You can't have “heroic recoveries” that
will keep the customer's loyalty if you have to stall them by waiting for
authorization or by passing them off to other departments.
service manager should then do a post-investigation on every mistake to
determine why it happened and then change one or more of the following three
aptitude - the wrong person is in a job slot;
education - they can do it, they just weren't educated to know how;
rethinking - make systems as customer-friendly, fast, simple, and goof-proof as
improve personnel systems to increase the odds that the right type of person is
hired for each job and then systematically trained before they are unleashed
upon the customers.
doing any of the above, grab the last three+ months of credits that were issued
to customers and have a cross-functional task team code them. Assuming that a
credit is issued for most customer errors, then credits divided by transactions
will approximate a company-wide error rate.
team should decide on about 12 to 18 codes with one or more for each of the
following sub-categories: customer (caused); outside sales; inside sales; data
entry; warehouse; shipping; suppliers; and other. When coding, don't get bogged
down over correctly coding each credit, just best guess them. We want to
improve quickly and make money, not die by analysis paralysis while dreaming of
the Baldridge Award.
the top three most numerous problem codes and have the service manager dig for
the real causes behind them and the solutions. The quality college ideas of
statistical analysis by work team is deadening for small, simple businesses
like distribution centers. Stall the Deming lemmings until after these 20/80
measures are finished in a few months.
possible, generate a monthly summary report of credits issued for each sales
territory. The report needs at least two columns - the credit # and the
customer's name. Then, two things can be done. First, identify target customers
whose names appear a lot and have the salesperson help investigate. Then,
figure the ratio of credits divided by transactions for each sales territory.
There may be one or more salespeople who have ratios that are 2 to 6 times the
average; these rogues must be confronted.
you can capture credit codes into a customer master file, then periodically
rank all customers by their credit to transaction ratio. Up to 5% of all
customers are apt to be abusive or disorganized; they will be noticeably at the
top of this rascal ranking report. Shape them up or tactfully nudge them to
in to “Station WIIM”( what's in it for me) for all employees. Explain many
times that “ Do it right the first time” economics have numerous benefits.
Short-term, morale will go up because of the absence of tongue lashings from
upset customers and salespeople, and measurable improvement logged on charts
boosts pride and confidence.
the firm will retain customers at a greater rate. Happy customers, well-sold
will give you last look plus something more for distinctive service. Then
annual margin dollars per employee will grow to support premium wages for each
job niche. And, faster growing companies offer more job growth opportunities
for everyone. The company will also improve necessary profits for reinvestment
to finance growing assets to support growing sales.
Great service is dependent upon the
bottom 80% of the payroll. If these folks don't know: who the core customers
are; what their top four+ service needs are; and what's in it for them, then
lasting improvement will not happen.
Besides some big picture education
for the troops, we need to try simple, to scale tactics for getting basic
service standards up a few notches. Because distribution managers typically
have too many hats to wear, quality ideas for large manufacturing environments
fail in most small, service businesses. But, quality benefits are vital, so
revive TQM programs with simple, quick tactics!