On Time Delivery - Non conformance? Root Causes, Corrective Actions

S

Sardokar

#1
Well here's the thing :

Our quality policy states that :

"...consultations, solutions and services should be completed to the best industry quality standards and in the required time frames"

However when we Analyse the delivery time of ur solutions to customers ( I.T. sector ) we notice a on time delivery of around 55% only

Is this a Non-conformance in relation to Quality policy ? ( we did not specify any percentage in quality policy but i cant feel that 55% isnt quite achieving what is promissed)

Also ...

Is 55% on-time delivery very low for the I.T.Sector ? would people working in IT sector give me ideas of Acceptable on-time delivery for their companies ?

We performed a root cause analysis and discovered the following causes :

- Unrealistic delivery times promissed to customers : Sales are promissing standard delivery terms even when they know we have financial hold with supplier or when the supplier is known for his late deliveries

When confronted about this , the Sales Manager claimed that increasingthe standard delivery time of around 2 more weeks would have a negative impact on deal closing ( they wouldnt close as much deals )

Thoughts ?

Is he right to prioritise deal closing even though customer complaining from delays and 45% of orders late ???


- Supplier Hold : we are having cash flow problems due to collection problems and Management planning

We are attempting to solve the collection problem by hiring dedicated people , making sales commision based on amounts collected instead of sold, and requiring from presales to inform sales about supplier delivery terms , so that sales can request from customer similar or better payment terms

But i have a Question ... is it my role as Quality Coordinator/Manager to tell the General manager his Financial planning method is not working and need to be re-assessed?

- Suppliers Delays : sometimes supplier having manufacturing problems


solution would be to increase standard delivery terms but we get back to point number 1 ....:(

-departmental problems : sometimes (not often ) we are taking longer than standard to place order

we are fixing this with employees
 
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K

keres

#2
Re: On Time Delivery - Non conformance ?? Root Causes,Corrective Actions

Well here's the thing :

Our quality policy states that :

"...consultations, solutions and services should be completed to the best industry quality standards and in the required time frames"

However when we Analyse the delivery time of ur solutions to customers ( I.T. sector ) we notice a on time delivery of around 55% only

Is this a Non-conformance in relation to Quality policy ? ( we did not specify any percentage in quality policy but i cant feel that 55% isnt quite achieving what is promissed)
For me this is nonconformity and corrective actions is required. "in the required time frames" sound me like 100 % or close to 100 %. And 55 % is to low :nope:
 
S

Sardokar

#3
Re: On Time Delivery - Non conformance ?? Root Causes,Corrective Actions

I tend to agree :(

How would you suggest we modify the Quality policy text in regard to on-time delivery in the upcoming Management review?

Removing any reference to on-time delivery seems unthinkable to me as a quality manager (it needs to be mentionned in some way ...

and putting "we will deliver half of our solutions on time" doesnt seem very ...wise :tg:

Any suggestions ?
 
K

keres

#4
Re: On Time Delivery - Non conformance ?? Root Causes,Corrective Actions

You must not change your quality policy. You must find the root cause for the delay and to eliminate it through corrective actions. Your attitude towards clients is evident not so much of your policy, but by your ability to perform pledges to them. In this case deadline.
 
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S

Sardokar

#5
Re: On Time Delivery - Non conformance ?? Root Causes,Corrective Actions

but even if we take corrective actions and we improve our on time delivery .. say from 55% to 70% ...


isnt 70% still a non conformity with our quality policy ??

so we keep doing corrective actions till we reach close to 90-95% (which i dont see happening :( ) instead of changing quality policy ?
 

Colin

Quite Involved in Discussions
#6
If we look at clause 5.4.1 Quality Objectives, it states ... The quality objectives shall be measurable and consistent with the quality policy.

So my first question would be "what are you quality objectives and are they consistent with your quality policy"?

I agree with your logic but to me, the quality policy is quite high level for this sort of detail to be included, I would expect to see the detailed numbers in the objectives.
 
J
#8
Well here's the thing :

Our quality policy states that :

"...consultations, solutions and services should be completed to the best industry quality standards and in the required time frames"

However when we Analyse the delivery time of ur solutions to customers ( I.T. sector ) we notice a on time delivery of around 55% only

Is this a Non-conformance in relation to Quality policy ? ( we did not specify any percentage in quality policy but i cant feel that 55% isnt quite achieving what is promised)
My first thought is that "should" is not "shall".
Is what you have stated in your QP a requirement? Or is it a "goal"?

As another suggested, what you need to do is to take the performance data and formulate improvement plans and goals and timelines (where applicable)

We performed a root cause analysis and discovered the following causes :

- Unrealistic delivery times promissed to customers : Sales are promising standard delivery terms even when they know we have financial hold with supplier or when the supplier is known for his late deliveries

When confronted about this , the Sales Manager claimed that increasingthe standard delivery time of around 2 more weeks would have a negative impact on deal closing ( they wouldnt close as much deals )

Thoughts ?

Is he right to prioritise deal closing even though customer complaining from delays and 45% of orders late ???
This could be a "catch 22" situation. If the SM makes realistic delivery estimates and loses sales, the company as a whole suffers. If he makes unrealistic ones, the sale is made.
Is there any way to discern if your competitors are doing any better than you are in this? It may be that such promises and subsequent "late deliveries" are SOP in the industry....
Not Good but....


- Supplier Hold : we are having cash flow problems due to collection problems and Management planning

We are attempting to solve the collection problem by hiring dedicated people , making sales commision based on amounts collected instead of sold, and requiring from presales to inform sales about supplier delivery terms , so that sales can request from customer similar or better payment terms

But i have a Question ... is it my role as Quality Coordinator/Manager to tell the General manager his Financial planning method is not working and need to be re-assessed?
As QM you can inform the GM that there are issues and that this is a component, but beyond that there is probably little that you can do.

- Suppliers Delays : sometimes supplier having manufacturing problems

solution would be to increase standard delivery terms but we get back to point number 1 ....:(
You might consider auditing your problem suppliers. If possible take your GM or other person with you so that, in addition to conducting an audit, these other problems can be laid on the table. Let the supplier know that you want to try to help them, not beat them up.

-departmental problems : sometimes (not often ) we are taking longer than standard to place order

we are fixing this with employees
Yup - This is always the place to start. Make sure that the issues are not in your system.

Overall I'd say that you have issues that do not lend themselves to quick or neat solutions and some of which may never be completely solved -

However, as stated at the beginning, stop trying to use the QP as your standard of non-conformance since it contains goals and not objective measures. "Should" is not "Shall" and while 100% is always the assumed goal, it often is not realistic.
You have the data, now you need to set objectives and come up with plans to reach the objectives....

Peace
James
 
P

pldey42

#9
"Sales are promising standard delivery terms even when they know we have financial hold with supplier or when the supplier is known for his late deliveries

When confronted about this , the Sales Manager claimed that increasingthe standard delivery time of around 2 more weeks would have a negative impact on deal closing ( they wouldnt close as much deals )"


This is a common problem in IT companies in my experience.

It's a nonconformity against contract review, 7.2.2, which states in part, "The organization shall review the requirements related to the product. This review shall be conducted prior to the organization's commitment to supply a product to the customer (e.g. submission of tenders, acceptance of contracts or orders, acceptance of changes to contracts or orders) ..."

In this statement, "requirements" includes delivery date.

The commercial case is simple: winning the immediate deal but failing to deliver reduces customer satisfaction and makes repeat business harder to win. Your financial data rather proves the point. From a business perspective, paying a sales commission and not collecting the invoice is a loss. (And if the sales manager doesn't understand this, the management rep may need to escalate the issue with the CEO and/or CFO, who certainly will understand.)

The corrective action needs to explore customer requirements for delivery dates and benchmark them against the competition. If they're realistic your organization needs to understand why it can't meet required delivery dates. If realistic, longer delivery times are competitive, then sales need to learn to persuade customers to wait - or to order earlier, or provide decent forecasts ...

I don't have any data but 55% OTD sounds pathetic. Who would deal with a company whose delivery performance can be predicted by flipping a coin?

Hope this helps,
Pat
 
J
#10
"Sales are promising standard delivery terms even when they know we have financial hold with supplier or when the supplier is known for his late deliveries

When confronted about this , the Sales Manager claimed that increasingthe standard delivery time of around 2 more weeks would have a negative impact on deal closing ( they wouldnt close as much deals )"


This is a common problem in IT companies in my experience.

It's a nonconformity against contract review, 7.2.2, which states in part, "The organization shall review the requirements related to the product. This review shall be conducted prior to the organization's commitment to supply a product to the customer (e.g. submission of tenders, acceptance of contracts or orders, acceptance of changes to contracts or orders) ..."

In this statement, "requirements" includes delivery date.

The commercial case is simple: winning the immediate deal but failing to deliver reduces customer satisfaction and makes repeat business harder to win. Your financial data rather proves the point. From a business perspective, paying a sales commission and not collecting the invoice is a loss. (And if the sales manager doesn't understand this, the management rep may need to escalate the issue with the CEO and/or CFO, who certainly will understand.)

The corrective action needs to explore customer requirements for delivery dates and benchmark them against the competition. If they're realistic your organization needs to understand why it can't meet required delivery dates. If realistic, longer delivery times are competitive, then sales need to learn to persuade customers to wait - or to order earlier, or provide decent forecasts ...

I don't have any data but 55% OTD sounds pathetic. Who would deal with a company whose delivery performance can be predicted by flipping a coin?

Hope this helps,
Pat
You are correct of course, but the bolded sections above seem to indicate the "catch 22" that I mentioned in my post.

If this kind of problem is common then the sales force is up against competition that is ALSO promising unrealistic delivery dates. If you give a realistic delivery date of 6 weeks and your competition promises 4 weeks (even knowing they can't meet it) can and likely does cost business...Sad but true.
Secondly, if this kind of thing is common, how accurate are the "benchmark" numbers going to be? Assuming you can get them.

Note I'm not defending the practice, just commenting on the problems this QM is facing.

Peace
James
 
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