From: ISO 9000 Standards Discussion
Date: Tue, 14 Nov 2000 09:51:17 -0600
Subject: Re: Contract Review Procedure /Freedman/Pfrang
From: "Pfrang, Doug" nicoletbiomedical
> From: "Freedman, Carol"
>
> I would greatly appreciate any advice that can be offered
> regarding how to implement a contract review process for all
> incoming orders. My company designs, manufacturers and sells
> three basic tiers of equipment: standard (parts ordered right
> from a catalogue - little, but some, confusion involved);
> configured (components ordered from a catalogue, all to be
> assembled in plant, and shipped to the customer - definitely
> some confusion involved); custom (high end, sophisticated
> customized equipment built specifically for the individual
> customer - tons of confusion throughout the whole system). I
> had recommended the use of a "contract review checklist" for
> all orders but that idea wasn't well received since some
> people felt that it would unnecessarily complicate the
> process of handling the most simple of orders (standard).
> What have other companies implemented successfully? Thanks
> to all in advance!
>
> Carol J. Freedman
Contract review should be relatively straightforward for all three tiers of orders. Simply identify the (minimum) information that your company needs to have to be able to complete the order. Contract review then consists of making sure the customer has provided you with that essential information. A checklist often works for simpler orders, but, since it hasn't, you probably should have different people and processes for each tier. For example, catalog orders might be handled by people who simply take orders and enter them. More complex orders probably need people who are more highly skilled, perhaps to the level of an engineer or project manager. Define the skill set required for your products and then staff to that level. A general rule is that custom orders require much more "face time" & hand-holding with the customer (because you need to get a lot of information from them), so you want people who are good at doing that. Most companies use an "account manager" or equivalent. Companies that sell very expensive products use teams of two for custom orders: an account manager who handles the people skills, and a technical guru who overcomes the technical hurdles. The greater the cost of errors, the greater the effort you should to make to avoid them.
For example, I compare your simple catalog orders to taking my car for an oil change at one of those drive-through oil change businesses. They perform a limited range of well-defined services, so they take orders with a simple checklist. By contrast, I compare your custom orders to taking my car to my mechanic for major work. Every order he takes is unique, so he takes orders with a blank form and writes in, in longhand, exactly what is to be done.
If you really want to be cutting edge, it might be worth your while to investigate a variety of businesses in your area, and benchmark the ones that have good processes for standard, configured and custom orders. For example, for standard orders, you might benchmark a popular fast food restaurant; for configured orders, you might benchmark a regular restaurant; and for custom orders, you might benchmark a catering business. With a little imagination, you can probably find businesses near you that have solutions for each of the three tiers in your order process.
-- Doug
Date: Tue, 14 Nov 2000 09:51:17 -0600
Subject: Re: Contract Review Procedure /Freedman/Pfrang
From: "Pfrang, Doug" nicoletbiomedical
> From: "Freedman, Carol"
>
> I would greatly appreciate any advice that can be offered
> regarding how to implement a contract review process for all
> incoming orders. My company designs, manufacturers and sells
> three basic tiers of equipment: standard (parts ordered right
> from a catalogue - little, but some, confusion involved);
> configured (components ordered from a catalogue, all to be
> assembled in plant, and shipped to the customer - definitely
> some confusion involved); custom (high end, sophisticated
> customized equipment built specifically for the individual
> customer - tons of confusion throughout the whole system). I
> had recommended the use of a "contract review checklist" for
> all orders but that idea wasn't well received since some
> people felt that it would unnecessarily complicate the
> process of handling the most simple of orders (standard).
> What have other companies implemented successfully? Thanks
> to all in advance!
>
> Carol J. Freedman
Contract review should be relatively straightforward for all three tiers of orders. Simply identify the (minimum) information that your company needs to have to be able to complete the order. Contract review then consists of making sure the customer has provided you with that essential information. A checklist often works for simpler orders, but, since it hasn't, you probably should have different people and processes for each tier. For example, catalog orders might be handled by people who simply take orders and enter them. More complex orders probably need people who are more highly skilled, perhaps to the level of an engineer or project manager. Define the skill set required for your products and then staff to that level. A general rule is that custom orders require much more "face time" & hand-holding with the customer (because you need to get a lot of information from them), so you want people who are good at doing that. Most companies use an "account manager" or equivalent. Companies that sell very expensive products use teams of two for custom orders: an account manager who handles the people skills, and a technical guru who overcomes the technical hurdles. The greater the cost of errors, the greater the effort you should to make to avoid them.
For example, I compare your simple catalog orders to taking my car for an oil change at one of those drive-through oil change businesses. They perform a limited range of well-defined services, so they take orders with a simple checklist. By contrast, I compare your custom orders to taking my car to my mechanic for major work. Every order he takes is unique, so he takes orders with a blank form and writes in, in longhand, exactly what is to be done.
If you really want to be cutting edge, it might be worth your while to investigate a variety of businesses in your area, and benchmark the ones that have good processes for standard, configured and custom orders. For example, for standard orders, you might benchmark a popular fast food restaurant; for configured orders, you might benchmark a regular restaurant; and for custom orders, you might benchmark a catering business. With a little imagination, you can probably find businesses near you that have solutions for each of the three tiers in your order process.
-- Doug