The Price of Failure
Most businesses in the glazing sector are not nearly vigilant enough when it comes to measuring and eliminating mistakes, the cost of which can be crippling not only to the company that slips up, but also to its customers and suppliers.
Take the humble processing error: A hand-written order form arrives on the fabricator's fax machine for a door that is 990 x 2300. It's picked up, processed in the design software and speeds on its way to the factory. Simple.
So on fitting day, everything is looking good. The fitters arrive on site having checked they have everything they need for the job. Glass, fixings and the like are all in the van, and they are 15 minutes early, smiling at Mrs. Smith, dust sheets in hand. Marvellous!
Then out comes the old door in record time, now clean up the rebate and it's time to offer up the new door. And that's when the fun starts. Because the second '9' should have been an '8' (it was a little unclear on the fax machine, which could really do with some new toner) and now there's a gaping hole at 32 Acacia Avenue, a door that's too big to fit and a nasty problem.
In one sense, the Fabricator is OK because they can point to their order acknowledgment (you DO send order acknowledgments for checking, don't you) and can show without any doubt that the door is to spec. But looking at it another way, their customer has done everything right yet now has to explain to the poor householder that the new door that should have been fitted by the early afternoon is now going to be 6 weeks away (yes - it's a special leaded glass unit, of course) and that the old door is going to have to go back in (Albeit that the frame will have to be partly rebuild by hand this afternoon as the old one didn't come out cleanly, and, yes, it's going to look a bit of a sight when the relatives arrive on Xmas day)
Score on the Door - the net result:
- The fabricator has to remake a door at no cost and compensate the retailer (not strictly according to the terms of business, but as a matter of goodwill) for the cost of the remake unit
- In spite of the goodwill, the installer is now thinking the Xmas hold might be a good time to look for a new supplier
- The installer has to pay twice for the fitting, and knock a couple of hundred quid off the price for the inconvenience
- The householder is hacked off, and knocks off a bit more when the time comes to pay. "Oh - and that window you fitted a month ago has a bit of a scratch on the unit. We weren't going to say anything, but since you're coming back anyway..".
- The retailer is not recommended to Mrs. Jones next door, and loses the profit on a whole house replacement
Admittedly, this example is something of a 'worst case', and it's difficult to quantify the true cost of a lost recommend, but if you can find a Retailer that hasn't had something similar happen in the last year (and who isn't an IFCon customer!), I will eat my proverbial headgear without ketchup.
So why is it, given the massive, disproportionate cost of mistakes in the Glazing Industry that so little is done to fix them?
We believe it's down to three words: Ignorance, Habit and Fear
Ignorance - Most companies don't measure the cost of errors, and as the man says 'what you cant measure, you can't manage'. If most retail businesses added up the cost of mistakes (and I mean something like the true cost, not just the cost of remakes and labour), they would probably find that it comes to between 1% and 5% of their turnover, depending on how well organized they are. That may not sound like a lot, but in the worst cases it could be as much as the owner is taking out of the business, and at that end of the scale is likely to be the difference between a sustainable company and one that fails. If you don't keep a log of the estimated cost of problems, and their causes, start doing it today. The future of your business may depend on it.
Habit - People don't like change, but just because you have always done something in a particular way doesn't mean its a good way. Take paper job files - easy to use, quick to set up and isn't it great that I can just scribble on the paperwork. But when you go on holiday leaving one in your laptop bag, and the customer calls with a problem, how can the team left in the showroom sort it out? There really is no excuse for not filing everything electronically these days, no matter how you do it.
Glazing businesses also tend to expect a certain level of grief, and as a result are more likely to fix today's problem as a one-off, without looking for a 'root cause' and learning from a mistake the first time it happens. This ties in with the ignorance: if owners could see the big picture and put a number to it, they would be less likely to tolerate errors.
Fear - Particularly fear of technology. Without being indelicate, a lot of the 'seasoned professionals' in the industry were cutting their teeth in an era when computers where big, multi-million pound things that sat in air conditioned rooms with whirring tape drives and clattering line printers. Whilst the 'young bucks' in the business tend to be keen to get on and use their laptops for everything, often the decision makers are the ones standing n the way of automation and hoping it will all go away. The news is: it won't, and anyone not making full use of IT is losing out on competitive advantage that is ultimately going to damage their business.
Now I won't admit that there aren't plenty of poor (and even failed ) technology implementations in this industry. I think these largely come about due to the 'nerdy' nature of software developers who don't understand their customers' businesses, or who are unable or unwilling to think in business (not IT) terms. But I do know that the best companies are beginning to separate themselves from the 'dinosaurs' by making software and systems work for them to manage their business in its entirety, driving out the possibility of simple mistakes that have such expensive consequences.
I believe these are the companies of tomorrow, and as the retail industry consolidates, as it inevitably will, it will be systematic, managed businesses who are intolerant of mistakes that will survive and grow.