A significant number of purchasing organizations find themselves working to improve both their image and customer satisfaction. This article describes the experiences of a purchasing organization, in one division of an oil company, that had tried unsuccessfully for ten years to improve customer satisfaction by measuring performance and improving supplier reliability. Management then employed a somewhat broader approach to improving purchasing performance in the area of capital equipment purchases: interacting more closely with internal customers. To evaluate the effects of this approach on customer satisfaction, upper‐ and middle‐level managers in purchasing's two largest internal customer organizations, Engineering and Maintenance, were surveyed—first in the Northern Division, where both past efforts and the current intervention had been implemented, and in a similar division, the Southern Division, where only past efforts had been applied. The results indicate that interacting more closely with customers can improve customer perceptions of purchasing's responsiveness and professionalism, but that technical knowledge may play a greater role in improving perceptions of the value added by purchasing. The experiences of this purchasing organization provide general insights on approaches to perceived performance improvement.
Because of lean performance expectations are set higher than those found at benchmark comparison mills. s-g, job1. Be a non-union shop, leanly stafled with broadjob descviptz'ons and few work rules. According to the mill's employee and public relations manager, one of Commonwealth Paper's goals is "to not carry one more body than is absolutely necessary." Because of lean staffing, job performance expectations are set higher than those found at benchmark comparison mills. The mill operates with 3 management levels and 245 employees (65 exempt employees, 150 mill operating employees, and 30 clerical employees), organized to directly support the production process. Managers, engineers, and operators often help mechanics repair paper breaks, maintain equipment, and install new equipment. Shareperformanceplans and information.Information-sharing is, in the words of President Allen, "a piece as important as the gainsharing program." Posted daily at the mill entrance are production results and gainsharing bonus percentages. All employees have access to the computer system that houses production and financial reports. In addition, departmental performance, process and product changes, workteam issues, technical data, and internal and external customer feedback are shared with work groups o n a weekly and monthly basis. Semiannual communications meetings are held and an Annual Report to Employees is distributed to keep all employees informed of company performance and upcoming plans. A contractor who was overseeing the installation of new equipment noted that "working on Commonwealth Paper projects is a joy, because everyone knows what is going on and everyone is willing to talk about the project." Manage by a set ofguidingprincz'ples rather than by a unioncontract. These principles, referred to by managers as the "Ten Commandments," outline management's duties and responsibilities to employees. Developed by Chairman Neal on the basis of discussions with his church minister, the principles are used by managers to evaluate plans and decisions and to determine whether individuals seeking employment fit the company's culture. 4. Provide employment security. Commonwealth Paper's management has never laid off any employee, either temporarily or permanently. Its philosophy is to maintain production levels, even when demand falls. "We'll worry about selling the stuff later," says Allen. Partly as a result of this policy, 69 percent of the work force has ten or more years' seniority, and turnover other than retirement occurs infrequently. Minimize status and pay dzrerentials.Everyone-from the president to the janitor-participates in the same base pay system, gainsharing program, and benefits program. The president's total compensation averages roughly 3.5 times the average total compensation of the lowest-paid employee group. Average mill-operating employee compensation in 1991 was 14 percent higher than the average of six benchmark comparison mills. The average mill-operating employee, doing the same job today as in 1976, has ga...
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