I sat down to re-read a book that I had been introduced to several years ago by a marketing expert friend of mine. In the book, there was an interesting discussion of service companies. The author asked readers to think about companies that had a reputation for outstanding service and note which companies come to mind.
Playing the author’s game, I came up with five companies that popped up as having a reputation for excellence in service. These were, in no particular order, McDonald’s, FedEx, Disney, Dell and Wal-Mart.[pullquote]
The author then went on to explain that companies that were well-known for customer service had two common traits. These common traits included efficient processes and discipline to their processes. When companies achieved these two traits, the typical results were lower costs for operations, leading to pricing flexibility. Pricing flexibility ultimately resulted in the ability to attract more customers and to increase market share.
I’d also point out that each of these outstanding service companies had something else in common. They did not just try to be more effective at executing old service models. These five companies either established a new industry segment or redefined what service in their respective industries meant.
McDonald’s created the fast-food industry, but, more than that, they created a systematic training process and established expectations for cleanliness and service. FedEx not only delivered huge volumes of packages in a timely manner, but also provided access to tracking information so customers could see for themselves where their packages were in the system. Disney optimized theme parks, but also provided tremendous customer satisfaction in the experiences; they made sure all of their employees understood how to enhance the guest’s satisfaction through cheerfulness, cleanliness, and value. Dell became an icon in highly customized computer equipment, delivered expeditiously and at low cost. Wal-Mart’s reputation was built on relentlessly pressuring vendors to provide lowest cost products and a logistics system that became the envy of the retail industry.
So, what can you take away from this discussion? A maintenance organization, or for that matter any other plant function, whether outsourced or in-house, is a service organization. The person in charge of the maintenance organization should be striving to lower total operating costs while delivering the best possible services as viewed by the customer. Like any other service organization, the maintenance manager should understand how to best satisfy customers.
Each of those five companies thought differently about how to approach servicing their customers while their competitors were thinking about how to improve profitability or other performance measure by 5% or 10% over the previous year. Relating this to a typical maintenance organization, it’s like the difference between saying we need to cut costs and figuring out how we can get better overall performance.
The least imaginative option becomes an edict to reduce the maintenance budget by 5% or 10%. This is a tactic where, after one or more such rounds of cuts, the organization becomes incapable of delivering the services required by the customer. There simply aren’t going to be sufficient resources to meet goals or expectations. The maintenance manager is eventually fired or quits to find a more tenable situation.
Forward-looking organizations look beyond the unimaginative response. They embrace a mindset that efficient processes, executed with discipline, will optimize the way their resources are deployed. Getting more work done with the same workforce drives down operating costs. Some of those resources become available to reallocate to higher-value activities that drive higher customer satisfaction. If your customer needs more reliable production systems, those “found” resources should be allocated to proactive reliability activities — support for defect elimination tasks such as engineering analysis, root cause failure analysis, failure modes and effects analysis. These activities lead to better quality, and more value-added preventive and condition-based maintenance tasks, which improves reliability.
Maintenance trades can often do more capital projects and other repair work at lower cost than contract services. Overtime costs come down as fewer emergency repairs are required and as time dependent tasks get done as scheduled.
Learn from successful service firms. Spend the time to contemplate what services your customers really want. Don’t follow the old patterns that lead to the predictably lower performance levels. Avoid the spiral of declining capacity to deliver high-quality services. Design efficient processes and execute the processes with discipline to gain resource availability. Reallocate found resources to drive performance to new highs.