Which would you rather rely on to protect your home: The world’s best team of firefighters, or a system that ultimately will keep fires from ever breaking out? It’s better to have a system, you might reply. But too many dealers rely on the former—ultimately to their regret.
TW Perry was like that. Then, at a December 2010 strategy meeting, operations director Sean Parker made a casual boast. “Operations fixes most problems before anyone really knows they’re happening,” Parker remarked.
True as that statement may have been, it set management to thinking. As TW Perry mused in its Excellence Award entry: “We wondered if we had great firefighters because we gave them so many opportunities to train in fighting so many fires.”
Management eventually concluded that the Gaithersburg, Md.-based company wouldn’t get better unless it created a process to identify and track its mistakes. Thus was born in July 2011 the Quality Assurance System.
The idea is simple: Whenever an error occurs, an employee is expected to go onto TW Perry’s Intranet and call up a form in which the worker enters a sales order, purchase order, or invoice number. That triggers the filling in of several other fields on the form. Next, the worker checks off boxes linked to roughly four dozen of the most typical errors that occur, briefly describes the problem, ticks some more boxes listing the most common root causes of the error, and then has space to suggest how to fix the problem.
Senior staff get copies of each form as well as a more general report showing how many times particular errors occurred. Recently, a third report was created containing similar information related to vendors’ performance—a key concern since 30% of TW Perry’s purchases are special orders.
Every two weeks, the bosses review the reports and—if a staffer hasn’t resolved the issue already—come up with ways to limit future occurrences of the same problem.
Sometimes the solutions are practical, sometimes personal. For instance, when it was pointed out that refunds on items paid for with credit cards weren’t moving quickly because refund requests had to be forwarded to the store. TW Perry speeded things up by moving some credit card machines into the dispatch offices.
Another change involved a vexing problem: Special-order goods that arrived at TW Perry’s loading docks without a purchase order. Sales reps were responsible for creating those p.o.’s, but too often they didn’t.
The very fact the problem was happening so often surprised company president Michael Cassidy. “If you asked me a year ago that [missing] p.o.’s would have been top of the list, I’d have said ‘You’re crazy; it’s No. 20,’” he says. But once the reports showed how big a deal this was, senior leadership tackled it.
Thanks to the reports, sales vice president Doug Kelly learned which reps were the most likely offenders. He began working with them to improve their performance.
The company also used an existing cross-training program to place sales reps in the shipping area so they could see for themselves the problems caused by not writing the purchase order. (Cross-training also helped reduce the number of times salespeople entered incorrect delivery addresses into sales tickets.) And for those who still didn’t get the message, TW Perry began to hint that failure to create the p.o.’s could affect team benefits and individual reps’ commissions.
In promoting the Quality Assurance System, TW Perry’s executives pushed hard to make employees realize that reporting mistakes wouldn’t lead to them getting fired. The emphasis is on ferreting out problems with policies and procedures, not people.
“We had to say, ‘This isn’t to throw the receiving group under the bus,’” stresses Gary Bowman, TW Perry’s vice president for information technology and training. To date, only one worker cited in a report was fired, and that was for chewing out a customer.
“It’s not a program to track stuff,” Cassidy says. “We don’t need precision. Our job is to move in a positive direction.”
“Each report gives us a coaching opportunity on process improvement,” adds Jimmy McClay, vice president of operations. Bowman notes that the program also enables employees to make suggestions on a daily basis. In most operations, employee suggestions get entertained at formal meetings that take place only a few times per year.
The technology used to create the form has evolved. The first version lived on Google Docs, one of Google’s many free software programs that make it possible to share documents with anyone who can get onto the Internet and has the right password. Google Docs can be configured to look like a form, and what’s entered can automatically populate spreadsheets and graphs. Its options are limited and crude, but you can’t beat the price.
Cassidy says using Google Docs enabled TW Perry to move quickly and learn along the way. “Don’t let perfect be the enemy of good,” he says. “Start to track what’s important now. Then, once you get the basics, that’s when we brought the experts in. I told [the reports’ creators], ‘Just decide to do it. Don’t pick 20 parameters; pick three.’”
Eventually, chief information officer Daryl White created a database on the company’s server and imported the Google Docs info. Staff rewrote the form based on the issues that were cropping up most frequently and then put the revised document on the company Intranet. To speed data input, it linked some fields to its Spruce database so that entering one bit of info would automatically fill in other parts of the form. Those changes have slashed the time needed to fill out the form to less than a minute, thus increasing the likelihood that staff will perform the task.
TW Perry expects the types of problems cited will evolve as the company evolves. Three years ago, Cassidy says, about 20% of the company’s problems involved people, 20% were the fault of poor communication, and 60% stemmed from bad processes. Now it’s even more skewed toward poor processes, he says.
“In five years, the complaint that’s filled in now should be gone,” Cassidy says.
“We’ve spent 10 years talking about continuous improvement,” Bowman says. “This took it a step further and institutionalized the process. ... On a manufacturing line, you can hit a button [and stop the assembly line] if you see a problem. This is our equivalent of the stop button.”