Time-based management can help you delivering outstanding service to your customers, but only if you apply the concept to your entire business -- and that means involving the CFO.
A year or two before the $1.6-billion Avery merged with the more than $750-million Dennison, we began to ask ourselves if we could respond to customers' requests in half the usual time. Could we develop new products faster? What if we could offer superior quality and even manage customers' inventory? In 1989, these were new thoughts for us. But the ideas became even more compelling after the merger in 1990, which required us to downsize, let thousands of people go and sell off $120 million in sales volume.
Even though we're the market leader in most of our markets, it was clear we needed a change, particularly when Avery Dennison passed the $2.5-billion sales mark. Time-based management struck a chord with us. So we decided customer service would become the holy grail around which to organize our business.
At that point, Avery Dennison resolved to become a focused, service-oriented competitor and to make time-based management our goal. We wanted to use our new responsiveness to stay close to the customer and particularly to focus our efforts on our most attractive clients. But you have to implement customer service and time-based management from the bottom of the company -- as a matter of fact, from the shop floor. To start the process, we hired outside consultants to help us concentrate on customer service, so we could learn how to deliver what the customer wants.
LISTEN TO THE CUSTOMER
All too often, the marketing, customer service or production department would dictate product delivery or quality of service. We didn't understand that the real key to success is delivering what the customer wants when he wants it. Becoming a good, service-oriented competitor can be done simply, but it does require a cultural change.
We started with one key division that needed a new operating strategy. I began by meeting with members of the management team and the customer service department in that division. I asked the customer service personnel how much time they spent on the phone and with whom. I was struck by the response to one question in particular: After you've made a quote to a customer, how often do you call back to see if we obtained the order? No hands went up.
In 1988, this division was a distant number two in the market, and it was only breaking even. Our...