The Preventive Corrective-Action Report, Management Trends Article - Inc. Article


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.

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* The Preventive Corrective-Action Report, Management Trends Article - Inc. Article

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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.

This article originally appeared in Inc. magazine in January 1996, and was written by Donna Fenn.

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* The Preventive Corrective-Action Report, Management Trends Article - Inc. Article