Published for Michigan’s Small and Midsize Manufacturers Volume 4, Issue 2, Spring 1998 Dear Manufacturers, The most valuable customer is one who has already been served A study commissioned by the US Department of Commerce pointed out that for small and midsize manufacturing firms it costs five times as much to get a customer as it does to keep one The study also showed that seven out of ten customers never complain when they have a problem Those two facts alone are reason enough for manufacturers to get out and talk to customers, listen to what they say, and make some changes to keep them coming back Customer loyalty works! In this issue of Manufactline, we focus on how to listen to customers You may want to spot little problems before they become big problems, or you may see the chance to build more business with current customers In any case, knowing your customers has become a key issue in the late 1990s If you would like more information on customer satisfaction monitoring, or any of MMTC’s other outstanding management activities, such as ActivityBased Costing or Quality Systems, please give us a call Sincerely, Michael Coast MMTC Executive Director ITI Vice President Customer Satisfaction Monitoring 10 Steps to Getting the Impact You Want Listen to your customers! It seems every business journal, magazine, and best selling business guru are telling management to be customer focused and really listen to customers So, when a company decides to begin monitoring customers’ satisfaction through a survey, the expectations are high The company announces the process, develops a questionnaire, sends it out, and then awaits the results The results trickle in, are tabulated, and a presentation is made to management Many times the survey finds no surprises, offers few, if any insights into customer’s attitudes, and after a couple of weeks the whole process is forgotten The experience is disappointing How can you use customer satisfaction monitoring as an opportunity to increase your customers’ loyalty, and have a positive impact on your business? Surveying customers seems simple on the surface, especially when there are few customers, but in reality customer satisfaction monitoring is complex It is not easy to get solid, actionable answers from customers that can help you improve your company and increase customer loyalty, but it can be done To help you develop a winning customer satisfaction program, I’d like to share some common issues our business services team have discovered while helping many small and midsize manufacturers develop their customer satisfaction surveys, select who to survey, execute the interviews, and act on the results They are not in any priority, but fall into three categories: designing the process, executing the survey, and analyzing and acting on the results Decide the Purpose for Customer Satisfaction Monitoring There are many reasons to survey customers First, decide what you are trying to accomplish Some people want to know how competitive their company is Others want questions that relate to their mission statement and strategic plan Still others will relate the questions to their continuous improvement program All these reasons are valid, however, pick just one When they are mixed together, the results are less than satisfactory Continued on next page what to but usually the questions are so vague no one knows what to do, or has the budget to solve the problem, so the issues also soon disappear n Expectation—What are the customer’s expectations on this issue? How excellent companies perform on this issue? The solution is to ask most of the questions about actionable items The quick way to find out if an item is actionable is to ask your managers, if this question comes back “dissatisfied” what can we to change it to “very satisfied”? n Performance—How we stack up on this issue? This is the last part of the satisfaction equation Examples of changing vague questions to actionable questions: n n Customer Satisfaction 2 (vague) How happy are you with our parts selection? (actionable) How many times have you called for a welding accessory and been told that we don’t carry that part? n (vague) How satisfied are you with our product quality? n (actionable) How many times have you found scratches on the coatings of our parts? Writing the Questions – Focus On Things You Can Change I have read many surveys, and some of them fall into the category of “popularity contest” The questions focus on whether the customer enjoys doing business with the supplier or not “How We Doin’?” was the title of one questionnaire This question is asked in many ways: “How’s our quality?” “How’s our selection?” “How’s our ontime delivery?” Managers ask these questions because they think 1) ultimately that is what they need to know, and 2) by directly asking the question they save the respondent time and reduce the risk of aggravating them Nine times out of ten the customer will answer “great” because it takes less time than to answer the question meaningfully These kinds of questions not give you information that you can use to make changes in your company When companies get positive responses to questions such as the above, the managers usually have a brief celebration, don’t gain any valuable information, and go back to business as usual If the answers come back negative, there are discussions about Michael Porter, a well known business author, has stated that companies that are in transition markets from growth to maturity, or have aging products, many times have inaccurate self-perceptions of their market position or capabilities A statement such as “we are the quality leader” may once have been true, but due to priority changes with buyers or competitors, it many times is no longer valid An exceptional quality part may once have gotten you a big job but those standards move up Previous quality levels may now be the expectation of the buyer The actionable questions tell a company several important things: 1) a quantifiable volume of lost sales — what this problem is costing the company in dollars; 2) the number of times a customer is aggravated; and 3) it gives a specific, finite set of parts or services to focus attention on Management can take action on these questions The narrow focus of the actionable questions may steer some companies away from this type of question, however, with proper planning management should be able to provide input on which areas are the important ones for customers Understand What You Mean by Satisfaction For many companies, satisfaction merely means you are allowed to continue bidding for jobs Generally, customer satisfaction is composed of three areas: n Importance—How relatively important is this issue to the customer? Keep the Entire Process Concise and On Time If the customer satisfaction project is dragged out management will forget about it, and forget the importance and original purpose Keep the process moving forward with periodic updates for those with interest in the results Customer satisfaction monitoring often takes a backseat to more urgent issues, and can have the plug pulled on it if something crucial occurs Delivering the results in a timely fashion is as important as commitment to the process manufactLINE s Spring 1998 Keep the Analysis on a Level Managers Can Understand Although you may understand the results of the conjoint analysis, if you spend most of your time explaining the technique to management before giving them the survey results, you may end up talking to an audience of blank stares Results of customer satisfaction surveys are often used for employee performance reviews If you are going to judge an employee’s performance by your client’s happiness, be very certain you understand what the results are saying and that the person being judged will understand them as well Most people without statistics coursework have an intuitive understanding of descriptive statistics (minimum, maximum, mean, mode, median, and standard deviation) Correlation and covariance are understandable but give people much more than they need, and they will not believe what you are telling them, especially if the news is bad If you are addressing results to other managers, give them suggestions on what to about problems, or at least a sense of direction on how to address the issue It is not enough to simply point out the problem Remember, the best programs have addressed the question “What will we if the answer is negative?” in the design phase of the survey Involve Others You need full support of company management or you will never get your customer satisfaction program off the ground Either the results will be ignored or discounted, or even worse, sales and marketing personnel may claim you are pestering customers with unwanted interviews Customer satisfaction monitoring must be a fully above board effort While it’s important to involve employees and get them excited about the process, you not have to involve them by inviting them to develop questions If you seek input from others in the survey development process, be certain that they clearly understand the purpose of the customer satisfaction monitoring activity A couple of questions in a lot of different directions may satisfy your employees, but will not give you a great survey tool It’s also important to share your company’s commitment to customer satisfaction with customers so they realize the importance of their participation This is best done with an introductory letter, signed by the president of the company The letter shows the importance the process has for the company, and serves to introduce the interviewer to the respondent in a positive light Don’t Be Afraid to Push Customers a Bit Many companies are so afraid of aggravating customers that it inhibits them from communicating with them and developing insights about their satisfaction They try to develop survey instruments that can be done in thirty seconds with “yes or no” answers This provides meaningless answers in which the respondent does not take time to consider his feelings and many times circles all “yes’s” It makes the company administering the survey feel good for about a day, then the whole process is discarded Most experts seem to feel that a survey should not exceed two pages or you risk aggravating customers, but within those two pages you can a lot more to coax insights that can address problems or add value to your products or services Ask customers about problem areas, but also consider what experiences they have had that were positive If you are trying to learn what customers think about a product, consider open ended survey questions in which you prompt them to tell the story of their experiences Prepare Your Customers and Involve Them The best way to ensure you are touching on issues that matter to your customers is to ask them — What matters to you? It may sound foolish but it works By asking them in the design phase of the survey, you can pinpoint their priorities and get directly to the issues that mean the most and produce the most loyalty The best method for doing this is to work with a customer who is friendly enough to go out for a coffee or a beer In a relaxed atmosphere, run a list of issues by the customer and ask them to rank ten issues by their importance to them Once you know the important issues then ask additional questions to try and understand some of the subtleties that make that issue a sore spot for the customer From that encounter you can begin building your questions for the survey When the questionnaire is completed, run it by the same customer for feed back and to ensure that you have captured the issue that they described Doing all the upfront work really pays off since you are dealing with issues that truly affect your customers About the Author: Bill Loomis is Director of the Industrial Technology Institute’s Small Business Development Center (SBDC) Mr Looms has assisted hundreds of small and midsize manufacturers in the areas of customer satisfaction, strategic planning, organizational development, market development, and market research He has authored numerous articles for industry trade journals, as well as national publications such as the New York Times For Your First Questionnaire, Keep Things Simple and In Control For the first attempt, select customers that really matter to your company Identify the best twenty-five and set a goal to interview all of them (a census, not a survey) As you gain experience and confidence, you might consider expanding the scope of your survey For example, the first expansion should stay with customers This way, the person conducting the survey does not have to deal with interview subjects who may have never heard of your company Staying with customers, one might compare big buyers to so-so customers and find out why they differ Some managers think that since they are going through all the trouble of developing a questionnaire and conducting the survey, they might as well get the most they can from the Continued on page manufactLINE s Spring 1998 Susan P Cook Challenges Companies to Think and Act Differently Author of Turned On: Eight Vital Insights to Energize Your People Customers, and Profits stewing hypothesis in 1990, when, as founder of a consulting firm called Think Customer, she responded to a distress call from Marriott’s Roger Dow, General Sales Manager “Marriott was facing a serious fiscal crisis,” Cook recalls She suggested to Dow that they bring together a select group of CEOs and execs from thriving, cutting-edge companies (among them Intel, Mary Kay Cosmetics and Charles Schwab) to informally share ideas that might help rescue them Customer Satisfaction When asked about her philosophy, Sue Cook waxes about “timeless wisdom” and “tapping the heart,” and declares that “all of us are born loving, caring human beings.” As children we love to innovate, collaborate and please others How can we regain the wisdom of our youth?” No, Cook isn’t a New Age guru, and she won’t be running retreats in the woods to worship Mother Earth She’s a business coach who spent 25 years in the corporate trenches, including a stint as vice president of Macy’s California and partners with Tom Peters….long enough to learn that the current boardroom mania for short term profits is stifling long-term innovation and customer satisfaction In it’s place, Cook challenges companies to think and act differently to create value for a firm’s clients and employees while hoisting the bottom line Cook posits this holistic managerial mantra of “customers, people and profits” as the key to long-term vitality Cook was given a golden opportunity to test her long- The meeting, marked by a candid discussion of corporate change, redirected its members’ attention from 10 year plans on spreadsheets to humanistic values Bill Marriott, who had been skeptical of the meeting, left inspired to “get back to the roots of Marriott’s culture, and get closer than ever to their customers and people.” Buoyed by the success of this first summit, Cook decided to make it an ongoing leadership forum Every months, she and Dow, who had become her partner in the enterprise, examined companies that in Cook’s words, “really care about their customers, their people and their shareholders.” To their amazement, they were inspired by the five year results of the publicly traded companies that they visited…sales were up 300% and profits 600%! Cook and Dow published these startling results in Turned On (HarperBusiness 1996), a chronicle of their corporate anthropology that serves in the words of Tom Peters, as “a fullblown business plan” for every type of enterprise That design is based on Cook and Dow’s “Eight Insights,” the first of which is to “build a strong foundation.” Cook defines that by quoting Jim Cleamons, ex-assistant coach of the Chicago Bulls, who when asked the secret of their five championships, replied “we constantly work on the fundamentals.” One fundamental element to business success is customer loyalty “65% of your current customers will buy 85% of your future products Therefore, it makes sense to take good care of your existing customers,” Cook says USAA, a $40 billion insurance company in San Antonio, Texas, is a master at this Cook explained that they have 2.6 million customers who are in the military During the Gulf War, USAA sent letters to active duty customers indicating that their auto insurance payments were being prorated because most of them couldn’t have used their cars during the war That’s what Cook says is “really knowing your customers.” She asks “how well you know the top 20% of your customers?” Cook exhorts companies to “be brilliant on the basics” and suggests that they ask customers to pinpoint the five factors most necessary to keep them happy For example, at Marriott Hotels, customer retention and satisfaction is clearly linked to (1) Everything is clean and works (2) Check-in is hasslefree (3) Staff is friendly and hospitable (4) Problems are resolved quickly (5) Breakfast is served on time Bill Marriott reinforces the message that the basics mean “serving hot food hot, and cold food cold.” Addressing such basic concerns will make each customer feel special, another of Cook’s manufactLINE s Spring 1998 Although that suggeston may sound far-fetched, it is such bold goals that Cook feels are most needed in a time of warpspeed technological change…goals that spark innovation “A decade ago, Intel was number ten in the world in manufacturing semiconductors, and it was losing competitive advantage Bob Noyce, one of the co-founders of Intel, said “Let’s get competitors to collaborate on new ways of manufacturing semiconductors.” He convinced the government and private industry to put up $100 million each to start SEMATECH (the consortium’s name) and guaranteed a certain return on investment Ten years later, Intel is No in the world in semiconductor sales and SEMATECH is now privately funded.” She notes similar successes in ventures ranging from state welfare programs to the Mars Sojourner Although most firms couldn’t build an interplanetary spacecraft (and would have a rough time selling it to their boards), what anybody can…and should…do is simplify things, for both customers and employees Cook is adamant about “removing the crazymakers”…those bureaucratic roadblocks that sap the manufactLINE s Spring 1998 morale and innovative ideas of an entire team “How are you making it easier for your customers and employees to business with you?” she exhorts Marriott Hotels provided her with a perfect example of making customers jump through hoops “They used to charge guests a dollar connection fee to use their credit card to make phone calls Of course, Marriott made millions in additional revenue, but Bill Marriott insisted that if they were going to be a customerdriven company, his managers had better find another source for that income.” Such decrees can be spurs to creative thinking One of Cook’s most surprising findings was that the most innovative uses of technology to improve customer satisfaction were not found in Silicon Valley but at firms such as office furniture innovator, Herman Miller, Harbor Hospital, and USAA In the middle of the recession, Herman Miller listened to it’s customers and created a subsidiary called Miller SQA…simple, quick and affordable…the very mandate they received from customers Miller SQA reduced delivery time for new furniture from 12 to weeks, gave each dealer computers and easy-to-learn software that allowed customers to, in effect, become their own interior designers This is a perfect demonstration of how technology can be your servant and enhance customer and staff satisfaction and profitability (By the way, Miller SQA continues to enjoy 35% compounded growth in sales and profit.) priority, only 30% are getting dramatic results According to Cook, these firms keep measures simple and take action on those vital few things that customers and staff care about Do your customers and staff receive a monthly scoreboard? Cook talks a lot about unleashing the power of people and explains this in pragmatic terms Some companies think “all we have to to maximize profitability is to develop great products and services.” But the catch-22 is: You won’t be able to innovate without great people Continual innovation demands great people and great people demand a great place to work.” Toward this end Cook suggests that firms “design learning around what individuals need to be great…on and off the job…and “hire people who match your values You can’t teach nice.” Customer Satisfaction main convictions To illustrate this, Cook summons the spirit not of some Gatesian visionary but of Bob the Bagel Man “For three years, whenever I visit New York, I stay at a hotel that is trying to be “the number-one business person’s hotel.” Oh, they spend millions of dollars renovating the lobby and each hotel room…even have cherry wood wall units built into each room and three telephones However, check-in is always a nightmare, and there is no desk in the room so I end up working on the bed Meanwhile, every morning I stop to see Bob the Bagel Man on the corner of 44th and 6th Ave Bob has no computer system, but he knows me by name and how I like my bagel and coffee I told this New York hotel to hire Bob to run their front desk.” Finally, managers should lead with care According to Cook, leadership isn’t earned by title, but by compassion “People don’t care how much you know, until you show how much you care Customers and employees are boss watchers and they are individual people with feelings When treated as human beings, they tend to act that way.” Excerpted with permission from Capturing Hearts, Minds and the Bottom Line, By Jim Gerard, freelance writer, New York, NY “We all know that if you don’t keep score, you don’t know how you’re doing,” asserts Cook Yet most organizations she visits are inundated with market research data, customer satisfaction data and morale studies Of the 85% of the organizations that talk about customer satisfaction and loyalty as their number-one Q&A with Douglas B Spooner Vice President of Sales Support at American Seating Measuring Customer Satisfaction at American Seating Our approach to customer satisfaction is not complicated American Seating is one of several major, highly respected office furniture manufacturers in Michigan, and more specifically in Grand Rapids American Seating was founded over 100 years ago and has been a leader and innovator in products, marketing, and management in the state for many decades Q&A A key element to prosperity at American Seating has been its ability to communicate with customers About seven years ago American Seating wanted to be certain that the importance of that notion was understood by employees, customers, and suppliers, so they included it as one of three key elements of their mission statement That mission statement is printed on every employee’s business card and it reads: American Seating is committed to being: • Customer Driven • Profitable • A Great Place to Work Douglas B Spooner was appointed vice president of sales support a year and a half ago He is totally committed to that mission He sees the idea of measuring customer satisfaction as an important tool to ensure that the mission of American Seating is lived Bill Loomis, program manager for strategic planning and market research at the Industrial Technology Institute visited Doug at American Seating to try and understand how he is working to ensure that American Seating continues to enjoy success in the face of overseas imports, cheaper labor, and changing tastes in American and international offices The following interview was conducted in Doug Spooner’s office at American Seating Q What motivated you in the beginning to measure customer satisfaction and what did you want to happen? A We have a few general drivers for measuring customer satisfaction First, we wanted it to remain simple and focused on knowing how satisfied customers are when interacting with American Seating We also wanted to ask questions that focused on “actionable” items: issues that American Seating could take corrective actions and see measurable improvements the next time the survey was conducted Our approach to customer satisfaction is not complicated We did not want to get involved in competitive issues This is not a process to gain competitive advantage Q How did you begin your customer satisfaction program at American Seating? A The process really began seven years ago with changes made internally at American Seating and with the eventual adoption of our new mission statement I began by researching a number of companies that I knew were committed to customer satisfaction Xerox and Roadway Express were two companies we reviewed Once we saw what others were doing, we began designing our own process We had complete commitment from Executive management at American Seating to this initiative Q American Seating serves a broad base of customers in North America Who did you decide to measure? A We focused our efforts on our American Seating office product dealers in the United States This constitutes well over 300 offices in three regions: eastern, central, and western The dealership network is crucial to American Seating and knowing how satisfied dealers are with us is very close to knowing how satisfied the end purchasers are Ninety percent of American Seating sales go through our dealers so it is very important we know how they feel about our products and services Eventually, we may expand it to the end customer, but we were novices to this process so we wanted to keep it simple and understandable to all Q How did you develop your questionnaire and how you execute your survey? A The survey was designed around dealer issues extracted from extensive interviews I did when first taking this position American Seating is manufactLINE s Spring 1998 Seating could something about If a dealer raised an issue, I wanted to be certain that was addressed This is a total and completely closed system: we ask, we analyze, we implement change, and we measure again Questions are grouped into major areas of interaction These include: · Customer Service · Product Literature · Production Lead Time · Product Delivery · Product Receipt · Quality · Sales Support · Product Management · Overall [Satisfaction] · Comments [added for the second survey] Individual questions are grouped by these areas When we analyze the completed surveys, we total scores on individual questions by major group This provides the appropriate manager with knowledge on how his/her domain of responsibility is perceived by the customer It makes taking action easier and more cost effective Q That has paid off, hasn’t it? A Yes, very much The questionnaire was mailed to our dealers with no follow up telephone calls We received a 68 percent response rate on the first iteration and 64 percent on the second We began our first mailing in March of 1997 and followed up with a second in October of 1997 We plan to continue these twice a year Any more than twice I feel is intrusive and won’t tell us any more about our customers’ feelings Q How is your questionnaire designed? A First, it is kept short and easy to complete Second, it is intended to show change over time so I went with a ten-point scale for each question This gives us flexibility for several years We use numbers so we can tabulate responses and show arithmetic changes, as opposed to open questions or yes-no responses Q How you then take the results of your survey back to managers at American Seating? A A memo-report is drafted to relevant managers and vice presidents Included within this memo is a bar chart that gives an immediate visual to indicate improvement or slippage We work with the I also did not want a “feel good” questionnaire in which people answer that they like us or they don’t like us I wanted issues that American Excerpt from American Seating Questionnaire: Product Literature: The product literature (price lists and catalogs) is: Easy to use and understand? unsatisfactory satisfactory 10 excellent Able to be used for easy specification of our products? unsatisfactory satisfactory 10 excellent Constructed in a manner that represents our product well? unsatisfactory satisfactory manufactLINE s Spring 1998 10 excellent managers responsible to determine why an area might have changed in the eyes of customers We also print the results in an internal newsletter so all employees can take some ownership of the results Our survey is designed to allow for general comments at the end Fewer than 10 percent of the respondents provide comments I insist that American Seating responds to every person who took the time to comment, either positively or negatively The comments are forwarded to the Executive Committee at American Seating and a vice president contacts the respondent to address their comment I feel this makes a big impression on our dealers and reinforces our mission of being customer driven From the other point of view, I think it begins to develop lines of communication between internal people at American Seating and customers Q Have you made any changes based on results of the survey? A We most definitely have Initially, we have made changes in customer service representation structure and to our telephone system Other changes will follow Q How long does the entire process take? A Roughly eight weeks: four weeks to mailing cut off, two weeks to analyze and another two weeks to present the findings to the Executive Committee Q If you have any advice for a company considering surveying customers for satisfaction and problems, what might that be? A First, make sure you are committed to the entire program, especially the follow up Second, only focus on things you can measure and change: ask/analyze/implement change/re-measure It is an endless circle Third, get the organization behind you and eager for results Have the support of the entire organization This is a must Q&A a company of both products and services, so the questionnaire had to capture both of these areas The questionnaire is two pages long and I wanted it to remain short and easy to complete, so all the questions are closed and easy to answer You can complete the survey in five minutes without rushing I wanted issues that American Seating could something about If a dealer raised an issue, I wanted to be certain that it was addressed [Companies should] only focus on things you can measure and change: ask/analyze/ implement change/ re-measure Customer Satisfaction Monitoring Continued on page process by including non-active customers, former customers, competitor’s customers and potential customers in new markets They see some advantages in comparing the attitudes of these groups and seeing how they differ It’s a good idea, however, it vastly complicates the process In some cases, it may require more than one version of the survey Without computer aided survey development software, it can become tricky keeping track of who gets what It also may require developing random samples from potential markets Without a background in statistics and some practical experience, this process is not usually successful 10 NEWS FROM AROUND THE STATE Make Sure the Person Conducting the Survey Enjoys the Work Many customer satisfactiontracking plans fail because the person who does the work is dragged into the process unwillingly In addition, the standard view is that this person will conduct the interviews, record the information, and report the results when he or she has free time In the end, this process doesn’t work because many people not feel comfortable talking to customers Consequently, the person never gets to the task, and the process drags on endlessly with many responses getting lost Nothing aggravates a customer more than completing a survey, and then getting the same request, which does happen Crucial to a good survey program is giving one person responsibility for the survey and develop a process to ensure that data is not lost or misplaced Enthusiasm sells the customer satisfaction monitoring process If you are excited about the prospect of really learning what your customers think of you and how you can use that information as an opportunity to increase your customer’s loyalty, then you will win over others both inside and outside the company Gearing Manufacturing for Tomorrow Michigan Manufacturing Week, May 11-15 · · The weeklong celebration focuses on the accomplishments and contributions of manufacturing by recognizing individuals whose efforts further the industry, and raising the awareness of the essential role manufacturing plays in the economic well being of our state The Michigan Manufacturing Association suggests a number of ways to get involved in Manufacturing Week · MMA has posters available that you can display at your company Call Cindy Zuker at 517-487-8542 · Showcase your products for legislators, media and the public by setting up a display at the Manufacturing Showcase at the Capitol on May 12 For more information call MMA at 517-4878551 Write a letter to the editor of your local newspaper about Michigan Manufacturing Week, noting the contributions manufacturing makes to the local and state economy · Michigan Manufacturing Week was established in 1996 by the Michigan Manufacturers Association (MMA), through a proclamation from Governor John Engler, to celebrate the tremendous impact that manufacturing has had on our state, the nation, and the world This year’s theme “Gearing Manufacturing for Tomorrow”, is intended to make the public, especially young people, aware of the high-skilled, well-paying career opportunities that exist in the manufacturing sector Show appreciation for your workforce by having a special luncheon or hosting an open house for employees and families Conduct a plant tour For information on how to host a tour, call MMA at 517-4878551 · Sponsor an educational seminar about jobs in manufacturing at a local school or vocational center · Be a guest speaker at a community organization · Attend the MMA Legislative & Executive Reception, May 13, 1998 The 1998 “Manufacturer of the Year” will be announced For more information call 517-4878513 Facts about Michigan Manufacturing Michigan is respected throughout the world as a leader in manufacturing processes and technology • There are approximately 17,200 manufacturing facilities in Michigan • Approximately 958,000 (22%) of the state’s workers are employed in manufacturing activities • Last year, the total payroll among manufacturing companies in Michigan approached $45 billion • Men and women in manufacturing consistently earn 50 percent more than those employed in nonmanufacturing and service sector jobs manufactLINE s Spring 1998 Joe Day of Freudenberg-NOK Shares Lean Manufacturing Success Our Award On Thursday, February 19,1998 the Industrial Technology Institute sponsored a seminar attended by over 125 Southeast Michigan manufacturers interested in Lean Manufacturing Joe Day, President and CEO of Freudenberg-NOK shared the dramatic results achieved by their current Kaizen Blitz! program of process improvement In 1991 Freudenberg-NOK launched their very successful GROWTTH (Getting Rid of Waste through Team Harmony) program The goal of the program was to reduce costs, improve quality and reduce manufacturing lead time by identifying and eliminating waste through team suggestions and team implementation The GROWTTH program has become an integral part of Freudenberg-NOK’s success in being able to meet all of their customer cost-down obligations and cover all of their labor and material cost increases, while improving their total profit margin Last year, the GROWTTH program of Kaizen events was expanded to a series of 10 straight weeks of Kaizens events or a “Blitz!” to accelerate an already impressive rate of improvement It was also announced that the Industrial Technology Institute (ITI) has developed a lean manufacturing implementation user group program based on Freudenberg NOK’s successful program The lean manufacturing user group offers smaller manufacturers the opportunity for hands-on experience, to implement lean systems in their own operations Each user group will consist of 4-6 manufacturers who meet every other week over a nine-month period Each group includes 8-10 half-day training sessions, six half-day sessions at each company site, an on-site Kaizen event for each company, and the opportunity to participate in a Freudenberg-NOK Blitz! For more information on lean manufacturing user groups contact Michele McLaughlin at 800.292.4484 ext 4513, or e-mail at mmc@iti.org Participants Comments Our three production managers attended the Freudenberg-NOK session with me The company’s gradual transition from batch to one-piece flow provided us some good food for thought As a result of attending this session, my team was able to apply some Lean Manufacturing practices immediately The result was a 13% increase in production on a new job by reorganizing it from a linear setup to a U-shaped cell - General Manager Growth & Opportunity, Lapeer, Michigan John Hubbard, Winning User Groups Can Open Doors User Groups Help Smaller Manufacturers Deal with Hot Issues MMTC user groups are a proven, cost-effective way to help your company increase productivity, improve quality, cut time-to-market, and find new customers User Groups consist of 4-10 companies working on a common issue, and run from to 12 sessions depending on the topic User Groups are forming now on the following topics: q ISO 9000 q QS-9000 q TE Supplement q Activity-Based Costing q Lean Manufacturing q It is always helpful to hear from companies that are successfully implementing change and winning new work as a result We got a lot out of Joe Day’s presentation, including the motivation to go back to the plant and try harder and not give up I particularly liked the Process Storyboards used at Freudenberg-NOK We have begun to document our processes using this approach to support our continued progress toward QS & ISO certification - Owner Schmald Too & Die, Burton, Michigan Laurie Moncreff, manufactLINE s Spring 1998 Customer Satisfaction Monitoring q Strategic Planning q Year 2000 Compliance q Environmental Management For details on user groups in your area call the MMTC regional office nearest you (list of offices can be found on page 11) Environmental Management Systems (EMS) User Group Kickoff Wednesday, May 27th / 8:30am - 11am / Industrial Technology Institute Attend this two-hour informational kickoff to learn about the pilot EMS User Group starting in June, 1998 The Environmental Management System User Group is a new training program designed to help Michigan organizations develop and integrate their environmental management system (EMS) and pollution prevention (P2) programs These programs are two of the three elements required for those organizations wishing to pursue the Michigan Clean Corporate Citizen (C3) designation; the third element of C3 is demonstrated compliance with applicable environmental regulations The first 10 Michigan companies who sign up will be able to participate in this pilot EMS User Group The EMS model used is based on Michigan’s Clean Corporate Citizen Program rules [R336.2405], which are closely aligned with the ISO 14001 standard The EMS User Group will be an interactive training program with sessions meeting twice per month over a 6-month time frame Additional information about the EMS User Group, including costs to participate is available at our web site, http://www.iti.org/ee There is no cost to attend the information meeting, but reservations are required Please contact Colleen Durocher at (800)2924484 X 4087 or cad@iti.org to register for the kickoff meeting Environment Management Seminars Half-day Seminar Introduction to Environmental Management Systems (EMS) May 12th & 27 / 8:30am - Noon Industrial Technology Institute Cost: $25 Two-day Workshop Building an ISO 14001 / Environmental Management System (EMS) May 14th & 15th / am - pm Cost: $395 Thursday, May 14, 1998 / 8:00am - 4:30pm Holiday Inn, Southfield, MI SPECIAL EVENTS The Michigan Manufacturing Technology Center (MMTC) is sponsoring its first annual Integrated Manufacturing Software Solutions Show This event is designed exclusively for small and midsize manufacturers who need answers to current information management issues 10 Find out how your company can: n Computerize existing manual systems n Integrate existing legacy applications and databases n Solve Year 2000 information system problems n Meet the automotive industry EDI requirements See the latest software all in one place on one day Knowledgeable representatives from leading software vendors will give presentations and meet with you to answer your questions 4 Participating vendors include: Real Trac (job shop software) CMS/400 Monitor (automotive based system) 4 Symix Syteline Dataworks Vantage Macola (previously DCD) 4 Spreadsheet MRP (low cost software) JBA System 21 Navision $75 per person - includes lunch To register, or for more information call Barbara Bartolatz at 800.292.4484 ext 4165, or e-mail brb@iti.org manufactLINE s Spring 1998 April 15 16 21 Marketing on a Zero Budget, MMTC-Southeast, Macomb Community College, Warren, 8am-Noon 11-1 Quality Management Systems Auditor Training – RAB Certified, MMTCSoutheast, Industrial Technology Institute, Ann Arbor, 8am-6pm 12 Manufacturing Resource Planning (MRP II), MMTC-Southeast, Schoolcraft College, Livonia, 8am-Noon 13 Activity-Based Quoting, MMTC-Southeast, Macomb Community College, Warren, 8am-Noon Advanced Product Quality Planning, MMTC-Southeast, Schoolcraft College, Livonia, 8am-5pm Introduction to Elements of Robust Design, MMTCSoutheast, Schoolcraft College, Livonia, 8am-Noon 21 Basic Business Principles, MMTC-Upper Peninsula 22 Activity-Based Costing, MMTC-Southeast, Oakland Community College, Auburn Hills, 8am-Noon 23 Quality Functional Deployment, MMTC-Southeast, Schoolcraft College, Livonia, 8am-5pm 24 Production Improvement Enhancement, MMTCUpper Peninsula, Gogebic Range Manufacturers Association, 4:30-5:30pm 28 Activity-Based Quoting, MMTC-Southeast, Industrial Technology Institute, Ann Arbor, 8am-Noon 14 28 Achieving Customer Satisfaction for QS-9000, MMTC-Southeast, Schoolcraft College, Livonia, 8am-Noon Lean Manufacturing Overview, MMTCSoutheast, Oakland Community College, Auburn Hills, MI 8am-Noon 19 Activity-Based Costing, MMTC-Southeast, Macomb Community College, Warren, 8am-Noon 19 Basic Business Principles, MMTC-Upper Peninsula, 5:30pm-7:30pm 20 EDI: Surviving & Thriving in the World of Electronic Commerce, MMTCSoutheast, Macomb Community College, Warren, 8am-Noon 21 Management of Inventory Record Accuracy, MMTC-Southeast, Schoolcraft College, Livonia, 8am-Noon 5-6 Quality Functional Deployment, MMTC-Southeast, Industrial Technology Institute, Ann Arbor, 8am-5pm Basic Business Principles, MMTC-Upper Peninsula, 9am-11am Design for Manufacturing & Assembly (DFMA), MMTC-Southeast, Industrial Technology Institute, Ann Arbor, 8am-Noon manufactLINE s Spring 1998 Finding New Markets for Products and Services, MMTC-Southeast, Macomb Community College, Warren, 8am-Noon Techniques for Shop Floor Control, MMTC-Southeast, Oakland Community College, Auburn Hills, 8am-Noon Product Data Exchange, MMTC-Southeast, Macomb Community College, Warren, 8am-Noon 11 Company-level Data & Benchmarking, MMTCSoutheast, Macomb Community College, Warren, 8am-Noon 16 Basic Business Principles, MMTC-Upper Peninsula, 5:30-7:30pm 16 Activity-Based Costing, MMTC-Southeast, Schoolcraft College, Livonia, 8am-Noon 7-18 ISO Documentation & Implementation, MMTCSoutheast, Schoolcraft College, Livonia, 8am-5pm 23 Activity-Based Quoting, MMTC-Southeast, Industrial Technology Institute, Ann Arbor, 8am-Noon Please contact the nearest MMTC Office for information on services, events and seminars Writing a Business Plan, MMTC-Southeast, Oakland Community College, Auburn Hills, 8am-Noon 27 May 22 CALENDAR Calendar of Events Strategic Planning for Small and Midsize Firms, MMTC-Southeast, Schoolcraft College, Livonia, 8am-Noon June Using Triz to Improve Products and Warranties, MMTC-Southeast, Industrial Technology Institute, Ann Arbor, 7:30am-10:30am Basic Business Principles, MMTC-Upper Peninsula, 9am-11am 11 http://www.iti.org Everyone is talking about benchmarking Benchmarking is stated throughout the requirements for the QS-9000 Automotive Quality Standard But, you know how you measure up against shops like yours—similar size, parts, and customer demands? FREE Benchmarking for Michigan Companies! For a limited time, Michigan plants with fewer than 500 employees can benchmark performance FREE by using the Industrial Technology Institute's Performance Benchmarking Service (PBS) Websites to check out for Manufacturing Information ITI Website – http://www.iti.org/ Automotive Industry Action Group (AIAG) – http://www.aiag.org/ Industry Net – http://www.industry.net/ NIST MEP – http://www.mep.nist.gov Benchmarks include: • • • • • On-time Delivery • Inventory Turns Scrap Rate • Value-added per Machine Uptime Employee Lead Time • Cost Estimation Customer Rejects Sign-Up for Your FREE Benchmarking By filling out an industry specific questionnaire, PBS compares your plant’s performance to similar plants using an extensive benchmarking database After completing the questionnaire, you will receive a customized benchmarking report detailing how your plant’s performance compares to similar plants HR & Workforce issues – http://www.teleport.com/~erwilson/links.html Quality Technologies for Competitive Advantage – http://akao.larc.nasa.gov/dfc/qtec.html Electronic Commerce – http://www.nemonline.org/mirl/ec Energy and Environment – http://www.nemonline.org/mirl/eet/ Industries covered: • • • • • • • • • • • Metalforming Shops Plastics Processing Machine-Building Low-Volume Tooling and Machining Machined Parts and Assemblies Screw Machine Products Metal Finishing, Coating & Plating Apparel, Hosiery & Other Cut-and-Sew Printing Other Discrete Parts Industries Process Industries To Sign Up, call the Performance Benchmarking Service at: 800.292.4484 (ext 4650) or 734.769.4650 FAX: 734.769.4651 Performance Benchmarking Service Industrial Technology Institute 2901 Hubbard Rd / Ann Arbor, MI 48105-2467 http://www.iti.org/pbs ManufactLINE is published by the NIST/Michigan Manufacturing Technology Center, an operating unit of the Industrial Technology Institute MMTC Director: Mike Coast, Editor: Marlene Nicol, Design: Jim Shearer For more information, contact: Marlene Nicol, Marketing Communications, Industrial Technology Institute, 2901 Hubbard Rd., Ann Arbor, MI 48105-2467 Phone: 800.292.4484 / Fax: 734.213.3405 © 1998 Industrial Technology Institute 2901 Hubbard Rd Ann Arbor, MI 48105 Non-Profit Org U.S Postage PAID Ann Arbor, MI Permit No 497 ... implement change/ re-measure Customer Satisfaction Monitoring Continued on page process by including non-active customers, former customers, competitor’s customers and potential customers in new markets... important ones for customers Understand What You Mean by Satisfaction For many companies, satisfaction merely means you are allowed to continue bidding for jobs Generally, customer satisfaction is... Vice President of Sales Support at American Seating Measuring Customer Satisfaction at American Seating Our approach to customer satisfaction is not complicated American Seating is one of several