I interviewed Martin Keyser who discussed the issue of companies having information they need to improve but they don't use this information.
It’s great to speak with you again, Martin, and I’m looking forward to this new topic you have: companies that have information they need to improve, but they don’t use it. My first question is regarding this topic. Can you provide a brief background of yourself?
I’ve been a purchasing agent for about 20-some years. I’ve also have done sales for around 20 years. I feel that purchasing and sales are the same conversation, just at different ends of the telephone. I also have my own company, so I’m experienced pretty much in all aspects of running a small company.
Great. What kind of information do companies not use that they have? Do you have any examples?
Well, for starters, one example, I worked for a company who brought everything in from China. Every single time that they were about to ship something in, it would start from scratch and add up all the expenses—not only the expense of the merchandise, but the expense of shipping and estimating all the taxes and duties and fees. All they had to do was look at their last invoice, and they would see to the penny exactly what all of that cost, but after they paid the invoice, they filed it away and never looked at it again.
All the information was right there; they just never used it to their advantage. A second example is a company that I recently worked for, a car-rental company. They have printouts of the exact car that is reserved by the customer, and they know by the hour and by the day exactly how many of these cars are due to be rented, yet they don’t use this information to get the cars ready for the customers. The cars that are put on the lot are put on the lot purely randomly. Right now, the customer may get what he ordered and he may not. In my opinion, all they need to do is sort out the cars in general bunches by category so that the amount of cars that are going to be rented at that particular hour or that particular day could be pulled and cleaned by the cleaners. The drivers would automatically get the car to the branch—because that’s what they do, they only take clean cars—and then do it again the next hour.
Every hour that a customer is due to show up, they could have his car available. As an example of how bad this is—I do consider it bad—the customer-satisfaction metrics right now is at 50 percent, which I believe is failing. It would be so easy to change all that just by looking at what the customers want when they show up. This reminds me of a push system where we’re telling the customer what cars to rent. Another example of that is a few years back, when the Detroit car makers made big cars, and they told us we wanted gas guzzlers and cars with big fins, and, instead, we bought Japanese cars. Of course, you know what happened to Detroit.
What I’m suggesting is to make a pull system, which is, again, looking at what the customer orders, cleaning it, making it ready and available when the customer shows up. Just for an example too, I can’t help wondering what a customer would think if he ordered a steak and the waitress brought him a salad. Would he ever go to that restaurant again? A third example comes from the accounting department. Many years ago I worked for a company as its general manager, representing six Western states and serving four hundred customers. The rule from the controller was that any invoice that showed up in the 90-day column, the customer would go on credit hold. It was just my luck that while I was out of the office, this report came through, and my biggest customer had one invoice in the 90-day column. The order-desk girl put him on credit hold. Sure enough, he called up and was told that he was on hold. Here I am, risking the fact that I may end up losing my biggest customer over one invoice. When I walked in a few minutes later, she told me what had happened, and I knew in a minute that we were either looking at a lost invoice or an invoice that had to have a pending credit memo against it. When I looked at the old report, sure enough, there were 30 invoices that the customer had ordered merchandise, and the very next report—the current report—had only this one invoice hanging out there. The customer had paid all the invoices except this one. When I looked further, there was no pending credit memo, so I knew it was a missing invoice. When I called him up, the first thing I told him was that he’s not on credit hold, and I mentioned this invoice to him. Within a few minutes, they were able to find it, and they got it paid. What I did was instigated a new rule that a customer goes on credit hold when I say he’s on credit hold. The controller wasn’t happy about it, but when we passed it by the manager of the division, the manger agreed with me. Those are three examples of using information that you have in front of you instead of making a mistake or drawing the wrong conclusions.
What is the cause of this problem? Why does it exist?
I think the cause of the problem is either looking at information and not coming to the right conclusions or just ignoring the information you have in front of you. In my world I want to make business faster, easier, cheaper, better. How you do that is look at all the information. If the information is there, use it; that’s how you can solve this problem.
My last question is: How can it be done better? Where have you seen success?
Well, I worked at a company as a purchasing manager. At the time, we thought that we could only produce $700,000 worth of merchandise a month. One day at a production meeting, we were sitting around, and I was looking at the paperwork, the reports, and I said, “Does anybody notice this? On the report, the first two weeks of the month, you guys made five hundred thousand dollars’ worth of merchandise. Do you not see that if you just duplicate this, we’ll have our first million-dollar month?” When they looked at it, they agreed with me. They didn’t have to do anything new, different, better, cheaper, nothing. All they needed to do was duplicate what they just did and they did it. By setting goals and achieving the goals and then resetting goals, it wasn’t long before we were doing $2 million a month and, in some cases, $2.5 million a month. In short, they could always do it; they just didn’t know they could do it.
Thank you, Martin, for sharing today on this important topic.
I appreciate you calling and talking with me. I hope that more people use this information and make their companies faster, easier, cheaper, and better.
About Martin Keyser