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B>By Ward Warkentin

I>President

ervice Quality Associates

During a workshop presentation at this year’s Truckload Carriers Association annual meeting in Hawaii, I asked 45 motor carrier executives about their use of quality practices. Three-quarters of them said they strongly believed they could generate better bottom-line results by providing quality service to their customers, yet when asked how many were actually achieving results through quality, fewer than 10% responded favorably.

Such a response today is fairly typical. While there is a general recognition that efficiency and profits can be enhanced through methods that focus on quality, formal systems that do so are not commonplace in trucking.

One of the crucial reasons workshop attendees cited that their companies are not achieving better results was that they are too busy fighting fires. That is, they are too busy working on problems that shouldn’t be occurring in the first place.

One fleet manager even commented that at least 40% of his time is spent fixing mistakes. If managers are spending this kind of time fighting fires, then this really makes it difficult to find the time to work on more substantial issues in the business that can help prevent these day-to-day problems from occurring in the first place.

Even when carriers do find the time to address key issues such as driver turnover or maintenance costs, they usually find there is no quick fix or silver bullet. Instead, they usually must engage in profound analyses of their businesses. They must identify and address the root causes of these issues.

For effective results, this requires awareness and understanding of problem-solving tools and techniques that don’t typically exist in most trucking companies today. Lacking the knowledge of these tools, carriers continue to struggle through day-to-day problems without really solving the issues in a meaningful way.

Another possible reason we don’t see more carrier executives adopting quality practices may rest in their successes as entrepreneurs. Many motor carriers are family businesses that don’t have formal boards of directors that encourage the senior management teams to seek out better practices.

Also, as entrepreneurs, they derive a certain level of satisfaction in responding to the crisis of the day and have become good at fighting fires, but not necessarily as good at preventing those fires.

What is it about quality, anyway, that enables carriers to achieve better financial returns? If I had to sum it up in one word, I would say “proactive.” Carriers that are proactive are not waiting for problems to occur or customers to complain before they react. Instead, they are constantly seeking out key issues in their businesses and addressing them in a structured and disciplined manner.

Taking active steps to eliminate recurring problems reduces errors and inefficiency, which in turn improves productivity and profits. Yet changing from a reactive mode to an active one really requires a change in mindset. Not until carrier managers make this critical shift in thinking do they make having a formal quality process a priority.

Bottom-line results through quality are not only achievable, they are necessary to begin changing the culture and behaviors within a company.

Once owners and managers see quality practices have an impact on their bottom lines, true commitment to operating in an active manner can begin.

In this new mindset, operating a system that offers quality is no longer viewed as an added cost of doing business. Rather, it becomes an investment that produces an ongoing financial return.

To help make this critical shift in thinking, the eight quality management principles of ISO 9000 provide useful guidelines for carriers looking to improve. These principles are the latest version of the internationally recognized quality standard, ISO 9001:2000, as developed by the International Organization for Standardization based in Geneva.

The eight quality management principles are: customer focus, leadership, involvement of people, process approach, systems approach to management, continual improvement, factual approach to decision-making and mutually beneficial supplier relationships.

Not only do these principles enable carriers to achieve higher profits — as illustrated in my book, “Shifting Gears: Applying ISO 9000 Quality Management Principles to Trucking” — they also help carriers deal with common industry challenges like increasing costs, lack of resources, environmental and other governmental regulations, constantly changing customer needs and driver retention.

For example, Norm Sneyd, the president of Highland Transport, a truckload carrier based in Markham, Ontario, said his company realized substantial financial gains by reducing annual driver turnover to 53% from 108% using the eight management principles of ISO 9000.

Highland achieved these results within eight months by emphasizing leadership, factual approach to decision-making and involving people. Specifically, the company made a commitment to cut driver turnover substantially. It involved the necessary players — including drivers and safety, operations, training and sales personnel — and then measured, analyzed and acted on the causes of driver turnover.

Service Quality Associates is a management consulting firm based in London, Ontario, that specializes in implementing ISO 9000 principles at trucking companies. The author’s book was written with James DePillo and Robert Melone.

This article appeared in the May 17 print edition of Transport Topics. Subscribe today.