No Margin For Error
“What are you waiting for?” my wife asked me.
“For the receipt,” I replied.
“Why bother,” she said.
That snippet of conversation took place at our bank’s drive-through ATM, where I had pulled in to replenish pocket cash. I was taken aback by her casual attitude and asked, “Don’t you ever take a receipt when you get cash?”
“Nope,” she said, “the bank never makes a mistake.”
Uh oh. Alarm bells rang. Except after thinking it over it dawned on me that in probably thousands of ATM transactions that the two of us have made over the years since these machines turned up everywhere, I can’t recall a single mistake either in the amount of cash dispensed or in the recordkeeping. Our checkbook doesn’t always balance with our monthly bank statement, but whenever it doesn’t inevitably I trace it to a human arithmetic error by one of us. I can’t recall a single time when our bank failed to record a transaction and for the correct amount. Maybe some of you out there have stories to tell about goof-ups by banks and their computers. But my family’s experience suggests automated banking errors are as hard to find as facial blemishes on Miss America.
However, if and when they do occur, I bet the reaction from customers is even more blood curdling than in days of old when we all waited in line for bank tellers who occasionally miscounted. Our Judeo-Christian ethic makes us forgiving of human fallibility. But we’ve become spoiled by the wondrous ways of modern technology, especially in critical applications concerning our lives and our money. So we expect airplanes never to crash and the computers that manage our wealth and business transactions to operate flawlessly.
When a thankfully rare airline disaster does occur nowadays, it’s more often traceable to human error rather than technical failure. Same with business blunders, which still show up far too often in this distribution industry.
Talk to contractors about their supply houses and it won’t be long before you hear a litany of gripes about orders gone awry, quotations lost, wrong items shipped, deliveries to the wrong location, billing errors, returns not credited, and on and on. Make one little mistake among hundreds of transactions, and that’s what will be remembered and talked about.
Well, that’s the point. Your customers are just as harried and profit-squeezed as you are. Mistakes cost them in labor, material, overhead, distraction and diminished profit. That’s bound to put anyone in a bad mood. Your customers were more inclined to cut you slack in the olden days when mistakes were made by human buddies who would make good by taking them to a nice place for lunch and plying them with ballgame tickets. Now, most transactions are handled over the phone or online, and they expect the technology used by distributors to overcome human shortcomings.
On the distributor’s side, mistakes are to profitability what a plane crash is to on-time arrival. Troubleshooting and making good are almost certain to eat up whatever profit exists for a given transaction and then some. I recall a presentation made by Nibco’s Chairman Rex Martin at an ASA Convention several years ago describing his company’s process improvement program in which they discovered it took an average of seven phone calls by various individuals to correct a mistake in the ordering process. Errors are a double-edged sword. They waste time and manpower fixing what’s wrong, while at the same time taking those resources away from more productive activities aimed at generating sales and dazzling customers.
The “nobody’s perfect” mantra has become increasingly irrelevant in today’s world. That’s literally true, of course, but competition and technology keep pushing the performance bar higher. An accuracy rate of 99% means every day you may be leaving dozens of disgruntled customers trailing steam vapors as they gripe about your incompetence to everyone who will listen. Perfection may not be attainable in this life but people in business dare not breathe easily until that 99% satisfaction rate extends to a bunch of fractional decimals beyond.
The good news is that this lesson seems to be taking hold around the industry. Various distributors have adopted programs to eliminate mistakes via practices such as repeating verbal orders back to customers, double-checking all paperwork and better training for everyone in the order processing chain.
If your people are not doing these things, well, that’s a huge mistake unto itself.