SBP 12b: The Unreliable Supplier Dilemma

This principle occurs because customers provide themselves, their belongings, and/or their information as process inputs. This simultaneous relationship as supplier and customer makes it difficult for the service provider to control the supplied inputs.

Why is it so difficult to eliminate unreliable suppliers to service businesses? The answer is because most of the suppliers are also customers! That is the dilemma!

The implications of the Unreliable Supplier Dilemma on quality management are far reaching. The following are some examples:

Implications for process efficiency

To some degree, every service process has to be efficient to maintain acceptable cost levels. Consistency breeds efficiency. Divergence breeds inefficiency. Unexpected divergence breeds inefficiency in a big way. A given service process may be robust, in that it works well given a wide range of customer inputs. However, if a customer input is presented which is clearly out of the acceptable range, the process can become somewhat arbitrary. For example, a dentist office needs a certain degree of efficiency in order to keep the patient flow moving. Dental service can usually handle a wide variety of patients and patient needs. It just takes one screaming four-year-old to throw the process out of kilter. What is the standard operating procedure for a child who attempts to bite the hygenist? or insists on playing with the dental instruments? or runs away and hides somewhere in the dental office?

Implications for job design

Imagine that you worked for a manufacturer and that your job was to bolt a display assembly into a housing. Imagine that the supplier of the bolts and nuts was unreliable–sometimes the bolts were too large for the nuts, and sometimes they were too small. Therefore, you found that you spent much of your working day trying to match up bolts with corresponding-sized nuts. Then, imagine that you were paid by your “productivity,” which was measured by the number of pieces you assembled in a day. What would be your reaction? Frustration!

In a similar manner, service employees who deal with unreliable customer inputs can be frustrated. Think of the employees that work at a computer company's installation help hotline. Many customers who call in may have actually followed the installation instructions, but many others are unwilling to do so when a person at the help hotline number will walk them through the process. This may be fine if no one cares whether the installation help hot-line employees are productive or not, but can be extremely frustrating if the employees are under call quotas.

Implications for customer satisfaction

Customers who supply low-quality inputs into the production process should not be surprised to find low-quality outputs. Yet sometimes they are. It is surprising to find that a car that has been long denied preventative maintenance such as oil changes is in need of major repairs at the auto shop. It is surprising to learn that the stain in the clothing that was run through the drier cannot be removed by the dry cleaner. (Never dry a stained cloth in the drier, unless you want the stain to be permanent!) Students who cram for exams and assignments are often surprised to see how hard it is to use their education to get ahead in their careers. (Not you, of course, but other students.) Customer-satisfaction problems arise when the customers expects a degree of input-transformation that the service provider is unable or unwilling to provide.

Service providers need to decide how to deal with unreliable suppliers and how to reduce the occurrence of unreliability.

One way to reduce the incidence of customer-inputs of inadequate quality is to train the customers. Ski resorts put signs at the top of the ski lift that says “Keep your ski tips up as you disembark.” Failure to keep ski tips up results in a face full of snow and the need to stop the lift to remove the skier from the side of the hill. Retailers train customers in their return/exchange process by saying “Help keep costs down, save your receipt.” The process of handling returns is likely to be more difficult without the receipt. Trash collectors have an effective way of training customer about when and where to place their trash receptacles for pick-up: They simply bypass customers when they do not comply, and find that customers tend to learn the appropriate procedures quickly!

Another way to reduce the incidence of problematic customer-inputs is to implement poka yoke methods, which are foolproofing devices. Poka yokes have been used in manufacturing settings for years to prevent the occurrence of certain types of quality defects. For example, the story goes that a Japanese auto assembler was responsible for attaching the fender of the car. If the fender was not attached just right, a quality problem would occur when the door was later attached. (The gap between the door and the fender needed to be just right.) So, this enterprising employee found a broom stick and cut it off to exactly the size of the door. That way, when he attached a fender he could insert the broom stick in the space and determine if the fender was acceptably attached. That broomstick was a poka yoke, or foolproofing device.

Service poka yokes may include checking systems as with the broomstick example, or might include a checklist or other type of reminder. Some service poka yoke examples are listed below.

Nevertheless, every service process that is standard operating procedure needs to have a corresponding “exception handling procedure.” This is a procedure for dealing with unreliable customer inputs so as not to disrupt the standard operating procedure. If the exception handling procedure is created “on the fly,” without prior forethought, it is likely going to be inadequate and will leave the service employees and the customers upset.

The following are some service poka yoke examples:

• Mail-order companies often take credit card numbers for purchases. A customer-input problem occurs when a customer uses an expired credit card. To prevent telephone personnel from taking any orders with expired credit cards, there can be a poka yoke in the computer system: The order screen will not let the order be processed unless a valid expiration date is entered. This prevents the employee from accidentally overlooking the expiration date.
• A primary input to the amusement park process is the customer's self. Some rides are not safe for people with health problems or who are shorter than a certain height. The park includes signs at the entrance to all such rides listing types of customers who should not ride, and height markers that say “You must be this tall to ride this ride.”
• Banks accept customer-money and check inputs into the deposit process. If customers forget to endorse their checks or complete their deposit slip at an automatic teller machine (ATM), the process of posting the deposit is much more difficult (and may include having to have the customer come all the way down to the bank to rectify the problem). As a result, banks put a reminder checklist on the ATM deposit envelopes.
• Doctors offices expect new patients to supply accurate insurance information. When new patients show up unprepared with this information, it wreaks havoc on the billing process. Therefore, some medical offices (such as my eye doctor), send out insurance and medical history information sheets to be completed and brought on the first visit.

You will see that not only do these types of poka yokes drastically reduce the chance of customer input problems, they also assist in training customers in their part of the production process.

One customer input into the airline process is carry-on baggage. Space restrictions and airline regulations limit the size and amount of baggage carried on by each passenger. Airlines recognize that this is a potential source of unreliable and unacceptable customer inputs. Therefore, many airlines attempt to train the customers in acceptable sizes of their baggage inputs. They do this by placing “size wise” or other named displays in the terminal which show exactly the maximum size of carry-on baggage. In fact, the signs invite passengers to insert their bags into the display to see if they comply, which I have never seen anyone else do. Why not? Because, frankly, passenger do not want to learn that they are in violation! Yet the displays are still serving a useful purpose by warning passengers how big their carry-ons need to be on their next trip. The displays serve to train the customer.

What about the passenger who shows up with some oversized baggage that he claims is priceless art that cannot be checked? That situation is not quite so simple. Perhaps airlines have a “priceless art that is oversized” policy, but perhaps they do not. This might be a situation for an exception handling procedure–to get the customer out of the regular line so as to not hold up other passengers, and have a manager deal with the problem situation. (The same approach could also be used for passengers who show up with their pet pigs or iguanas.)

Another input to the airline process are the passengers themselves. Sometimes, they arrive unreliably, being late for whatever reason. Airline gate employees are put in a precarious situation when the ramp door is closed and a passenger shows up with still five minutes until departure. To the passenger, five minutes is plenty of time to get on the plane, but the airline may require a larger margin of time. An approach some airlines take is to require passengers to be at the gate twenty minutes prior to departure. That way, even if they are ten minutes late, it is no problem.

Southwest Airlines addresses the concern about passengers checking-in on time by issuing every passenger a colored plastic card at the time of check-in. The card is presented to the agent upon boarding. This assures that the passengers ticket has been checked, and speeds up the boarding process. That plastic card method is an excellent example of a poka yoke.

With manufacturing, suppliers work for the manufacturer, and must provide inputs that meet manufacturers' specifications, or be eliminated as suppliers.

1. In what ways might customers provide inadequate inputs?
2. What happens when customers provide inadequate inputs?
3. How might the company assure that customer-provided inputs are appropriate?

Redraw your service process to anticipate potential problems with customer inputs. Identify likely sources of problems with customer inputs with a circled “F,” for fail-point. Design a poka yoke to help reduce the probability of problems. At what degree would problems with customer inputs be severe enough to warrant an exception handling procedure. Design a simple exception handling procedure, including identifying who is responsible for handling such problems.