Ricardo R. Fernandez, P.E.
Ricardo R. Fernandez, P.E., Managing Principal, Advent Group, Inc., Miami, FL, 305/227-9478, firstname.lastname@example.org
ABSTRACT. Everyone hates complaints. Some of us though, have listened to the Customer Service gurus and we make sure we react to complaints quickly. "The customer is always right," they say. "Do it right the first time! Respond quickly! Make them happy at all costs!" We are tired of this stuff. We are doing the best we can..... especially since our resources were cut so much in the last reengineering effort! What do they want from me? I am not going to take this anymore!!!!!!
One should realize that all those slogans are worthless by themselves. They tell you what you need to do, but they leave out how. You want to do it, but you don't know how. They frustrate you. This article discusses how the purchasing professional can seek out the information they need to deliver better service, in an efficient, timely, and cost effective manner. It will also discuss how to use this information to improve the Purchasing process from the requisitioner to the supplier in a systematic way. This system will help the purchasing professional in their quest to prove to their customer, the value that they bring to the business table.
OBJECTIVES. One of the keys to this session is the use of customer complaint information as a valuable tool to the improvement of existing Purchasing processes. We will change the paradigm of complaints as being negative and instead consider them a positive opportunity to learn what their customer expects and how to manage those expectations. We will explain how to develop performance agreements and build them into a system.
This article will concentrate on the concepts of Customer and Market Focus of the Malcolm Baldrige National Quality Award of the United States. It will include discussions of the measurement of satisfaction and of dissatisfaction, the creation of customer loyalty, the translation of the customer's requirements, the development long-term customer-supplier's relationships, and the development of service delivery processes that will attain the customers' satisfaction and delight. It will also discuss when the customer is always and when the customer is not always right.
INTRODUCTION. You have most likely heard not one but several presentations of very good speakers that have motivated you to change the culture of their company and thereby focus their resources toward their client's necessities. Although you may be very much in agreement with this focus, when the enthusiasm subsidizes don't you wonder, "How do I make this happen? What do I do first? What methods can should I use? What problems should I expect? Can I be sure that I will be successful?"
The answers are based on the methodology that is titled"Advancing Organizational Performance". This is a systematic and integrated management process that this based on the approach of the Malcolm Baldrige National Quality Award. To be successful in the implementation of this methodology one needs to understand two fundamental concepts that are learning and the measurement.
LEARNING AND MEASURING. The focus to the client and the market forms this model's crucial concept. One of the very important concepts that determines if this management process can be successful or not is the learning of the overall company. Very associated with this concept it is the measurement process. All departments, functions, operations, or projects in the company need to establish and use a set approach to everything they do.
Purchasing, for example, needs to establish written plans and procedures for their procurement process and for their process of establishing and maintaining long-term supplier relationships. If everything is done in an ad-hoc way and there is no set method, it cannot have systematic measurement nor can there be a comparison of the plan against the current activity. If comparisons are not possible then one cannot make an analysis of the breach created between their expectations and reality. This prevents true organizational learning from taking place.
This learning is imperative so that the company and its employees can continue improving, becoming more competitive in the new world economy. Although there are many forms of measuring the results of the company in this article we will limit our discussion to the methods related to client satisfaction loyalty. Other performance measures are covered in other articles.
THREE SYSTEMS FOCUSING THE CLIENT AND THE MARKET. The focus to the customer is a prerequisite for the success of this management process. The requirements must come from the customers themselves. This is not just the Purchasing Agent but rather the end user of the product or service being purchased. We have to understand, to predict, and to translate these requirements. To achieve this the following systems are needed:
COMMUNICATION SYSTEMS WITH THE CUSTOMER. If we want to understand the requirements of our customer we have to create communication systems with the customer that create a level of proximity and listening capabilities that allow one to derive the most accurate and most complete information from them. It is not enough simply to acquire this information, but rather the key is to use this information for the organizational learning that was mentioned before.
Although there are many alternatives that can be considered to develop communication methods with the client we will concentrate on one. This is the complaint or feedback system.
COMPLAINTS OR FEEDBACK SYSTEMS. A great source of information that we don't use enough is the fantastic opportunities that we call "complaints". It seems that our paradigms don't allow us to accept that complaints are really gifts. A complaint is not only a gift of information, it is also a gift because it allows us the opportunity to win over a customer before she/he stops being a customer. Studies have shown that 95% of those that complain and their complaint is resolved to their satisfaction are transformed into faithful customers and even fans of you and your Purchasing department.
We should make it easy for the customer to complain. They should be made aware of the various ways that they can send in their opinion and suggestions of your service. For example, the end users of your Purchasing department should be provided with either forms, email locations, or Intranet forms to log their complaints and to follow up for a response. These methods should be accessible to everyone. The complaint process should be promoted and incentives should be given to clients that complain. It is extremely important that they understand that the Purchasing department is willing to hear them and to respond.
This is just as important with suppliers. We sometimes forget that suppliers are also customers of our organization, especially, but not limited to our Purchasing and Accounts Payable departments. We need to hear how they feel about our company as a "supplier friendly" organization. Are we meeting their needs so that they could in turn meet our needs better?
It is not only important to use the information that we derive from customer complaints to react to them and to somehow make them happy on the spot, but most importantly, we must be able to aggregate and trend that information to give us an idea of the areas in our process that need to be redesigned. This redesign would be intended to prevent the recurrence of this type of complaint and to maintain a more satisfied customer base. The information can lead us to make long-lasting improvements to our processes that will have significant impact on the future dealings with our customers. It is these types of changes that eventually help change the perception that the customers may have about the Purchasing department.
TRANSLATING COMPLAINTS TO PERFORMANCE AGREEMENTS. Historically most Purchasing departments have used performance agreements with their suppliers for key purchases of their organization. Suppose that similar, but simplified performance agreements could be developed between the user departments and Purchasing. The process would be similar. The following 5 key elements would need to be addressed:
SUMMARY. It is very important not only to understand that the company should focus on their customers and its market but also how can this new culture be implemented. Slogans are useless without the process behind them.
Without the methodologies, the focus to the client and the market is simply a dream, but with the methodology such a huge change takes place that it changes the company, its clients and its employees deeply, and turns the dream into a reality.
The Purchasing department and its customers are also deeply affected especially when they use the same methods to improve their listening skills with their customers, establish approaches and guidelines that they can perform in a consistent manner and set up mechanisms for learning and improving from those same processes. One of the main players in this management system is the "complaint". We should not complain about complaints, rather we should welcome them and use them as opportunities to improve our processes and our relationships with our end users and our suppliers, thereby simplifying our jobs as Purchasing departments and making us much more effective and useful in the eyes of our organization and our customers.
Copyright 1998 by Advent Group, Inc. All rights reserved.