" Promises, Promises? "
Here's an all-too-common business scenario: A salesperson snags a contract for a long-term project at a profitable price, but the delivery date is totally unrealistic. Havoc ensues, and work falls behind schedule, frustrating the customer and ruining any chances for repeat business.
Bay Cast, a steel foundry in Bay City, Mich., makes it its mission to honor every delivery date it promises customers. "In our industry, you become a hero because no one does it," says CEO Scott L. Holman, whose company has maintained a 99% on-time delivery rate since he bought this casualty of the Rust Belt in 1989. "I know, because I'm on the board of the Steel Founders Society of America, and we run some surveys on what customers complain about. Those of us who succeed make sure we meet our deadlines."
To keep his company's promise, Holman borrowed a scheduling technique used by NASA. No sales proposal goes out until the production manager assesses resources and builds the proposed project into the foundry's production schedule, committing to a set of internal deadlines. Contingency time is also built into the delivery dates.
Bay Cast's in-depth approach may result in schedules that aren't always what the customer wants to hear. "Sometimes we lose sales because a competitor promises a delivery date we know is unrealistic," notes Holman. "We'll mark a date on our calendar to call the lost prospect back and ask how an order has turned out. Inevitably, it hasn't received its shipment, and we'll convert the prospect into our customer." And this company has certainly succeeded. Sales have grown to $15 million since Holman embarked on the turnaround.