Delivery System Quality

“Quality in a service or product is not what you put into it. It is what the client or customer gets out of it.” – Peter F. Drucker, Renowned Management Expert

We’ve been focusing this blog series on delivery systems – how your company gets your product or service to the customer. A good delivery system will be efficient and have the appropriate amount of capacity to handle your production needs. But what about quality? It doesn’t matter if you have the most efficient and cost-effective system on the planet. If you are delivering an inferior product or something that doesn’t meet the customer’s expectations, you will quickly lose sales, as well as your reputation.

If you haven’t analyzed your delivery system from a quality control standpoint, you should. Here are some things to evaluate and consider:

What is Your Commitment to Quality? – If you want to deliver a quality product, you have to be committed to doing just that. Does your company have a clear vision of how you define quality? Are management and staff aligned on that vision? Do they define quality the same way? Take the time to create a mission statement for quality in your production system.

Who Is Responsible for Quality? – The responsibility for quality should be shouldered by everyone in the company. That being said, the customer should have a point person to call whenever there are questions about products or services they’ve received. Don’t ever make the customer call every department in your shop trying to figure out who can “make it right.” Do they call their sales rep? Do they have an account manager? Make sure the lines of communication are well-established within your production system.

What Quality Control Measures Do You Have in Place? – You do have some, don’t you? In short, how does your production and delivery team know if they are producing the product correctly and to the customer’s specifications? Are there checks at several points on the production line? Have these quality specifications been clearly communicated to the production team? Do they have any input or ideas on how to improve quality?

Are They Sufficient? – You should have a clear target of what percentage of errors you are willing to allow for in your production line. Each person on the line should be well aware of what they need to do to meet those performance measurements. If you have Quality Control measures in place, but you are still delivering products that are underwhelming your clients, you may need to add more quality control checks to the delivery system. Assess what your system currently allows for. Late delivery? Insufficient packaging? Incomplete orders? Find out where you need to tighten controls and set performance targets for your team in those areas.

How Do You Handle Breakdowns in Quality? – Do you involve the whole team and look for a better way to make the product? Do you assess where the bottleneck or breakdown occurred and make changes to improve the process? Who manages these breakdowns with the customer? Does the customer feel as though they are getting good customer service, even when something goes wrong? How much are these breakdowns costing you?

It’s important to remember that delivery systems aren’t just for companies producing widgets. Service providers need to consistently monitor quality if they want to deliver quality consulting or creative services. Even if you aren’t producing a physical product, you are delivering a project or service that needs to meet your client’s expectations. Quality goes a long way toward good word of mouth and repeat business and can be the difference between winning and losing in the customer’s eyes.

Are you ready to win?

Delivery System Efficiency

“There can be economy only where there is efficiency.” – Benjamin Disraeli – Famed British Statesman

Last week’s blog focused on delivery system capacity. You must have enough production capacity to produce what you sell. But before you run off and spend precious capital on additional equipment and resources, it’s best to analyze how efficiently your current system is running. An efficient delivery system will yield higher profits without extra expense.

So how do you know if your current delivery system is operating efficiently?

Find the Bottlenecks – Almost every system has a component that slows down the entire production process. The first step is to find those bottlenecks and decide how to handle them. Let’s say you have a production rule that a senior manager has to sign off on all filled orders before they ship. What if that person is out sick or on vacation? How much time does it take to perform this task? Can this job be delegated to someone on the production floor? Can the system generate a report that can be emailed to the manager at certain times in the day? Find your bottlenecks and see if there is any way to eliminate them.

Is the Staff Working at Peak Performance? An efficient system is only as efficient as the people working it. Is your staff giving you 100% effort? Have you studied industry averages for producing your product? How would you know if your people are working hard?

Specific and Measurable Targets – In answer to the previous point, you need specific and measurable production targets in order to tell if your system is efficient. How many units per day? How many orders filled? What measurements can you put in place that would tell you that you are operating at full speed? How often should you measure for them? Good reporting is a hallmark of the efficient delivery system.

Incentives – A good way to keep the production team operating optimally is to have some games or incentives in place to reward them for good performance. If we make our quota of 1,000 units per week, everyone will receive a Starbucks card. Individual goals and quotas are great ways to measure for outstanding performance and identify who really has company interests at heart. A more motivated production staff will tend to be much more efficient, creating more profit for the company in the long run.

Is the Product Profitable? – Are you producing the product as profitably as possible? When was the last time you looked at vendors or re-negotiated materials pricing? Could you be getting your material cheaper? Could you be outsourcing one of your processes that is currently a bottleneck? Is it cheaper to do it somewhere else? An efficient delivery system should maximize the profit potential for the product.

Lots of companies are trying to be lean in these challenging economic times. The best way to approach efficiency is to start by analyzing your current system and looking for ways to improve what’s already there. A re-energized production team that’s clear on the company’s intentions and their role in achieving them is bound to be more efficient and more cost effective. These days, that’s half the battle if you’re going to win the game of business.

Are you ready to win?

Delivery System Capacity

“The secret of success is to do the common thing uncommonly well.” – John D. Rockefeller

One of the most important components of any company’s delivery system is capacity. You can only deliver as much product as your operation can produce, and that capacity threshold will impact not only your profitability, but your sales. It’s crucial that every business owner, manager and sales person understand production capacity. Here are some key things to consider:

Capacity Must Meet Sales Intentions – Sounds simple, but it’s often the Achilles heel of many companies. Management sets sales goal and intentions that far exceed what the production team can physically produce. If you are setting unprecedented sales intentions for your business, you must be prepared to acquire the necessary resources to produce the product at that level. Can your current production system accommodate a sharp increase in demand?

Capacity and Percentage Sold – It’s very important that production and sales meet regularly to monitor available capacity. If your production capacity is 100,000 units per month, and your sales team has already sold 85,000 units, you only have 15% remaining capacity. Another order for 30,000 units will create a backlog that will frustrate customers. Sales and production must always be planning for upcoming orders and how they will fit into the available capacity. Either that, or management must be prepared to do what it takes to increase capacity so that there is no backlog.

Manage to Customer’s Expectation – Your production system must be able to produce product to meet the customer’s expectations in terms of features, timing and service. The sales team should not make a practice of over-promising beyond what production can reasonably deliver. If the customer is expecting 10,000 red and blue units in 7 days, they will not be delighted to hear that they can only receive 7,000 blue units in 10 days. Production has to operate to the customer’s expectation, but sales needs to appropriately communicate that expectation.

Getting the Product Out the Door – It’s one thing to produce 10,000 red and blue units in 7 days, it’s another to get them safely to the customer. Production capacity doesn’t stop with manufacturing the product. Timely physical delivery to the customer is just as important. Do you deliver the product yourself? Do you rely on outsourced shipping? Who is responsible for making sure the product reaches the customer in good shape – sales or production? Your company’s system and capacity for getting the product to the customer as promised is essential for customer satisfaction.

Don’t leave any of these steps to chance. Clearly define delivery responsibilities at every stage of the production process. Consistently monitor your production capacity so that you are prepared for all orders and can anticipate breakdowns in advance. Always advocate for collaborative communication between the sales and production departments. Companies that go the extra mile to meet the customer’s expectations will reap the rewards of repeat business and good word of mouth. And that’s a winning formula for meeting sales and profit goals, even in the most unpredictable of markets.

Are you ready to win?