Wednesday, September 06, 2006

Customer/Supplier Parnerships - Part III - Focusing on the Customer - Which One?

Part I - Customer-Supplier Process: Creating Value?? -

Part II - Supplier Evaluation Program -

Part IV - SIPOC Model & Internal Process Model

Part III -Focusing on the Customer – Which One?
For years I have been educating and training on the importance of the internal customer/supplier partnership to a company’s overall quality strategy. I developed models like the one below to graphically get my points across.

Unfortunately many people have used the internal customer supplier partnership model as a means to hide defects and non-conformances of their input because they are representing the customer, or worse yet, they believe themselves to be “the customer” of the next in line process. Let me provide some examples that I have encountered on some of ventures over the last few months.

“Who told you to make that change in the system, I am your customer, you supply me with information, next time you make a change, make sure you get my OK before moving forward!”


“I don’t care if the order was done incorrectly, the customer does not have service, the order was supposed to be turned up yesterday, and it’s not my job to baby sit the order through the system. My job is to sell and generate revenue, you’re job is to make it happen!”

On the surface these might seem like legitimate complaints, but when more information is provided it becomes a different story.

The first complaint took place was witnessed by many people and it was between two internal managers (peers), one from the Customer Service Center and one from Operations. No rate paying customer or supplier was involved, but the service center manager was considering himself as the customer.

The second example was a conference call between a Sales Manager and a Customer Service Center Manager. While the Sales Manager was representing the best interest of the customer, she failed to realize the input order that originated from her department was wrong and it caused delays in processing and a missed due date. The Center Manager knowing the order was wrong returned it back to the field.

Both examples have the same root cause at work and that is the notion of being an “internal customer.” The quality concept for referring to “internal customers” must be rethought. We all know the customer is always right, and the customer comes first, and the customer is king, but which customer. There is only one, and that is the rate-paying customer. Everyone else in the internal supplier chain must represent the true customer, not himself or his or her department.

While the internal customer model has provided a service for identifying process owners, it also has caused a number of concerns.

Concern No. 1: The current internal customer mindset has created a confrontational servitude attitude.

The original quality concept of an internal customer/supplier partnership was intended to create an atmosphere that our internal next in process should be treated like a customer and we should be treating each other with respect. Unfortunately, many people believe that because we pay suppliers to provide a service they should do what ever we ask, and that they owe us everything we request. While this may be warranted in certain case externally, it should not be the way we conduct business internally.

The mindset should not be, “You are here to supply me,” but rather, it should be “We are here to supply our customer. How can we work together to accomplish this goal?”

Concern No. 2: Only a few of us have direct customer contact with the external customer.

While this is concept is true, it can cause trouble when folks start thinking that because they don’t have direct contact with the customer, their work doesn’t impact the customer the same as a customer service agent or salesperson. Does the process person who writes the procedures by which others use for service order provisioning have an impact on the customer? Do project managers and their teams when implementing new systems have impact on the people who need these systems to serve our customers?
All employees have an impact on our customers; some are more difficult to gage than others are. For example, when I was a Payroll Manager it was my group’s job to pay our employees correctly 100% of the time. Every time we paid someone wrong and they had to call the payroll office that took time away from them to do their jobs. I didn’t want employees on the phone with my people; I wanted them on the phones with our customers.

Concern No. 3: While the internal customer model has been effective in identifying the next in process customer, it may cause barriers to implementing breakthrough efficiencies.

The current order provisioning process may be adequate for identifying next in process customers and negotiating wants and needs, but what happens when we become so entrenched in serving the next in process customer that we don’t recognize we have created a very good manual sequential chain of events. I believe this is what has happened to our current ordering process. It was built on the premise that as long as there wasn’t an overload of orders the number of people currently in the process could handle the work. However, this type of thinking also results in throwing more people and resources at the problem, rather than looking for ways too efficiently improve the process.

An analogy that comes to mind is an old western movie where the barn is burning and all the ranch hands and neighbors gather in a long line to pass buckets of water to put out the fire. What are really required are a fire hose and a strategic number of trained people performing many activities at the same time to save the barn.

Our current merger has thrown us into this situation; with the onslaught of expected orders from Acme Company we are expecting that our current process along with some new hires will handle the increase. While I wouldn’t go as far equating our current process to a bucket brigade, has anyone determined the current capability of our system to determine if adding additional people would be enough, or would it require a fire hose approach to keep the rise in orders from burning down the barn.

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