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HUMAN RESOURCES

The Preventive Corrective-Action Report

Several managers explain how they created a CAR form designed to support ISO 9000 guidelines.
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It's great to have a paper trail to track and fix mistakes. It's much better to have a form that helps fix the process so mistakes don't get made in the first place

We were like a car heading uphill on icy terrain -- we just couldn't make progress," recalls Steve McClintick, president of Braas Co., a $25-million distributor of industrial-automation parts. Shipping and billing errors were so prevalent that Braas's salespeople were spending more time doing damage control than drumming up new business; internally, reworking costs and delays in accounts receivable were straining the company's resources.

Although Braas didn't actually lose business in those dark days, McClintick knows that at least two customers began shopping around for new distributors to fulfill additional contracts. "If we'd been doing our job, there would have been no need for them to look elsewhere," he says. "We opened up the possibility of a whole new bidding war."

Braas had reached a critical stage. By late 1992 the 31-year-old Eden Prairie, Minn., company had outgrown its laissez-faire style of operation. Searching for guidance on quality control, McClintick consulted the tomes of quality gurus such as W. Edwards Deming, but nothing clicked until he heard about ISO 9000, the set of quality guidelines issued by the International Standards Organization. ISO 9000 requires a business to create its own program by writing a quality manual and defining work procedures. "We felt that ISO would give us a path to follow," says McClintick.

It has. Braas, like all companies that seek ISO registration, needed to document specific quality-related procedures, including corrective action. Marketing manager Tim Bloudek, whom McClintick appointed to spearhead the ISO effort, met that requirement by leading a team that created the Corrective-Action Report (CAR). The form is deliberately "system oriented" -- there's no place on it where employees, all of whom are encouraged to fill out CARs when they encounter glitches, can even be tempted to assign blame. And company policy dictates that CARs must not be used as justification for discipline or termination. "We don't want people using this to point fingers," says Bloudek.

Although the form's immediate purpose is to provide a mechanism for recording and correcting "nonconformances" (read: screwups), it has another, more important role: exposing the root causes of recurring problems. "The CAR is not just corrective," says McClintick, "it's preventive." For instance, CARs revealed that pricing errors were much more common with nonstandard items, whose product variations required salespeople to calculate a price rather than just look one up. "We've been able to identify that trend, determine which products are prone to pricing errors, and then give people specialized training in that area," says McClintick.

CAR information was also the catalyst for a formal training program for new inside salespeople. Says supervisor Dan Groen, "When I started here, five years ago, I had three days of training before I started answering the phones. Now it's three to six weeks before new employees go live with customers."

Since January 1994, Braas's 80 employees have filled out about 1,300 CARs -- a tribute to the usability of the one-page forms and to the public recognition the top management gives to employees who fill them out. But most important, McClintick thinks, is that CARs "give people a way to participate."

Today, 20 months since the company won ISO certification, Braas boasts a 99.8% shipping-accuracy record. It reported a 7.5% reduction in accounting credits in the first half of 1995; in the same period, sales increased by 15%. And Braas's salespeople? They're doing what all good salespeople should do -- "focusing on sales again," says McClintick. And doing a lot less apologizing.


Report text

Braas Company Corrective Action Report

"If in doubt, fill it out"

Initiated by:

Date:

Time:

Is this a direct customer complaint? No/Yes

Product failure:

Vendor name:

P/N:

If this is a product failure, place a copy of this report and other related data in the Vendor Incident File

Contract Review:

OE # if available:

Order/line not entered

Wrong Ship To:

Wrong Bill To:

Pricing error (Stock/Non-stock?):

Wrong part entered

Wrong quantity entered

Wrong delivery date entered

Shipping error:

Caller name:

Company name:

Customer #:

Caller phone #:

(Short ship/Over ship/Shipped wrong product)?

Packlist #:

PO #:

Product ordered/quantity:

Product description:

Product shipped/quantity:

Product description:

Other comments relating to customer complaints:

Describe the situation if not a customer complaint:

Possible cause (Attach any documentation you may have to support your observations):

Keying error

Customer renegotiated price after order shipped

Other (describe)

Is this an ISO quality issue? (Yes/No)

If this is a shipping error, forward a copy of this page to the Returns Department

I am the most appropriate person to resolve this issue. (Yes/No)

Initiator stop here! Forward this form to Jackie Olson.

Steve McClintick explains Braas Co.'s Corrective-Action Report (CAR):

We want people to fill out CARs as much as possible. We recognize the employees who have written the most CARs by describing their accomplishments in companywide E-mail messages and by giving them shirts or sweaters that say "ISO."

The corrective-action process is initiated because of something we observed internally or because a customer called in with a problem. The form can be used for any nonconformance, internal or external.

We look at specific suppliers to determine which ones cause the most product failures. Using quantifiable information from the CARs, we can have more-focused talks with those vendors about their level of service to us.

In earlier versions of the CAR we asked employees to describe the source of the problem. But we found that most errors were coming from contract review -- in other words, order entry -- and shipping, and they fell into these seven buckets. By using check-off boxes, we make the information easier to complete, record in our database, and analyze.

Over time we discovered that we have a greater percentage of pricing errors with nonstock items. By capturing that information, we can give our vendors objective feedback. For example, we can show them that their pricing structure is so difficult that our people just can't figure it out.

Parts with similar numbers were getting mixed up pretty frequently. We're now developing a system of random bin locations so that products with similar numbers don't sit side by side in the warehouse. Putting larger numbers and better lighting on some of the bins has also helped.

Accounting requested this box ["Customer renegotiated price..."]. Most credits were issued because customers would come back after the sale and say that the price was too high. In fact, the field salespeople were often quoting prices that inside sales reps weren't aware of. We're now taking a look at our formal quoting process.

The CAR also serves as a returns report, so that employees don't have to fill out two forms. If the problem came from shipping, the CAR would be sent to that department for immediate action.

People often catch their own errors, correct them, and then fill out the CAR so we have a record of the incident as a resolved issue. In one example, Michelle couldn't ship the part because she's in the inside sales department. But she can work with the returns department to solve the problem.

Jackie, our marketing assistant, is responsible for entering all the CAR information into the database. She also determines who should receive the form for action -- usually a supervisor or manager. At first, everything came back to top management, but that created a burden for us and slowed improvements. Also, we didn't have as broad a buy-in from the staff.




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