posted 22 November 2000 06:54 PM               

From: "Pfrang, Doug"

> 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.

posted 22 November 2000 06:56 PM               

From: ISO 9000 Standards Discussion
Date: Tue, 14 Nov 2000 10:08:44 -0600
Subject: Re: Q: Contract Review Procedure /Freedman/Scalies

From: "Charley Scalies"

Don't confuse the "How" with the "What".

The What
There are 2 basic parts to every contract review process. First, review the order/quote to be sure it is clear, complete and in accordance with your understanding of it. Second, review the order to be sure you can meet its requirements before accepting it. (Record the review in some fashion.)

The How
The specific activities involved may well differ from product to product, product line to product line, etc. It's up to you to devise the right system(s).

BTW, a formal "Checklist" - with all that this implies - may well be excessive in almost every case except those that involve large, complex contracts that require lots of coordination.

After you have defined the "What" - usually a level 2 procedure - ask yourself if you care "How" it is done. Is How it is done is important to control the output. If yes, define the How. If not, the What should be enough.

Put another way, procedures are tools that people use to control a process. The level of detail is directly proportionate to the amount of control you decide is needed.

posted 24 November 2000 04:49 AM            

We're currently trying to think up some tools for capturing this without appearing to feel threatening to our customers.

For example, we really want to know if the customer would prefer things to be fast, cheap or perfect every time (and yes, I do know that they will want all three !). We feel that if we understand any preference that the customer has then we are more likely to delight them.