How IQ Problems Hurt Business and Alienate Customers

This past spring, I had the opportunity to speak to a group of quality managers, engineers and statisticians in Kingsport, Tennessee, located in the beautiful northeastern part of our state. My wife Diane and I chose to drive and enjoy the Great Smoky Mountains scenery.

On the way home, we stopped at a new home accessory store near Pigeon Forge. At first glance, this establishment appeared to be typical of the outlets and shops found elsewhere along this scenic route. Upon closer inspection, however, this store was similar to a true distributed enterprise – all under one roof. This "store" had many autonomous shops, but they all shared a single centralized sales checkout system.

The Poop

It was at the centralized checkout system for the distributed shops that the problem lay in waiting. The sales process failed as we were checking out; however, the process was broken much earlier. The lessons learned from the following series of events apply to all distributed organizations.

The first item we bought was scanned and successfully registered. The second item, a pair of tassels for a new tapestry on our den wall, did not scan. Recognizing the possibility of an information quality (IQ) problem, I started my stopwatch. The checkout clerk tried scanning the tassels a few more times to no avail. She then tried to manually enter the item number on the tag, only to have the register sound an audible beep indicating that something was askew. One minute and 23 seconds had passed.

IQ Lesson 1: Measure the cost of nonquality information. To solve the root problems, we must gather accurate data about the real costs of the problem. This is what Kaoru Ishikawa, the Japanese quality guru, means when he says, "speak with data." See IQ Lesson 7 for the final results.

The clerk, somewhat baffled, now picked up the intercom phone and called a clerk from the shop selling the tassels to the front. With both clerk and customer in Muda (the Japanese word for "waste") mode, another two minutes and 43 seconds elapsed before the shop clerk arrived at the checkout counter.

The shop clerk confirmed the items and the price, but the item still would not scan. The checkout clerk asked us if we would rather not buy it so she could complete the sales transaction. Time now elapsed: five minutes and 57 seconds.

IQ Lesson 2: Information quality problems always impact the customer. In this case, the customer was inconvenienced to the point that the clerk asked us not to buy the tassels because they were preventing her from doing her job.

When we informed the clerk that we still wanted to buy the tassels, she paged a manager over the intercom. The manager arrived at the PFP (process failure point) plus seven minutes, 31 seconds. Two additional customers were now behind us, wrongfully thinking they were in the "short" queue.

The manager plied her expertise on the cash register, but not even her authority would not permit the items to be scanned. Relatively quickly, the manager recognized the problem: The item number had not been entered into the computer. Time: PFP plus 8 minutes, 43 seconds.

IQ Lesson 3: Work is not complete until the information work is complete. Items available for sale cannot be sold until all required data is available to the sales process. The real process that was broken was the "list and price item" process. This process must be defined to require that all shop proprietors create the item and price data before inventory is made available for sale. If there is an intermediary process to enter the data electronically, it must likewise be performed properly.

This lesson applies to all processes that cross functional or organization boundaries. When data is created by one process (item pricing) and required by another process (sales) in a cross-functional value chain, the value chain process must be defined and controlled.

The manager explained the problem. Based on how fast she identified the precipitating cause, I suspect this was not the first time this has happened.

IQ Lesson 4: Information quality problems do not solve themselves. Defects will always recur unless the process is improved to eliminate the root cause and to prevent recurrence of the defects. The "plan-do- check-act" process, the fundamental process improvement cycle, is one of the most important processes in any quality methodology. IQ assessment may produce short-term improvements because people are paying attention to the problems. However, without process improvement, the process will fall back to its equilibrium point of defect production.

Because we had a long drive ahead of us back to Nashville, I asked the manager if she could use a back-up procedure to register our sale, such as manually entering a miscellaneous code with proper item number in a comments field. Her response: "No, the item number must be in the computer." She then left with our tassels, presumably to go back to the office to enter the data into the database. Our Muda time is now 10 minutes, 34 seconds.

IQ Lesson 5: The automation of business rules must take the real world into account. The sales application must have the ability to handle unexpected item numbers while not inconveniencing the customer and capturing the data necessary to make a proper accounting for each shop. A miscellaneous item code for each shop would enable this. However, a miscellaneous item code by itself is not enough. There must be a "comments" field to allow the capture of the item number from the price tag to ensure accurate inventory data and sales accounting data. This will require scrap and rework downstream, but allows the capture of required data at its origination. If not captured at the point of the event, much event data will not be recoverable.

The manager finally returned, keyed the item numbers in, completed our transaction and apologized, stating that the store was new and they did not have "all the kinks" worked out.

IQ Lesson 6: While a belated apology is better than nothing, empathy for the customer up front is the best practice. Customers will be more understanding if they are made aware of extenuating circumstances that may cause a problems. If a problem is known to the organization, employees should be prepared to let customers know that they are aware of the problem and what they are doing to correct it.

As we waited for the manager to return, the sales clerk could not even check out the other customers! Once the sales transaction was started, she could not, or possibly would not, terminate our transaction to check out the other shoppers.

Our final Muda time clocked out at 18 minutes, four seconds, with two shoppers behind us having been innocent "Muda standers" for approximately 10 minutes.

IQ Lesson 7: It is not just the direct customers who suffer. This nonquality data incident cost 3 customers a loss of 38 minutes of their personal time.

Additionally, three employees were involved in resolving this problem, wasting a combined total of 33 minutes (checkout clerk, 18 minutes; shop clerk, 4 minutes; manager, 11 minutes). When employees have to handle problems, they are rendered unable to serve other customers during that time. The 33 minutes of employee time spent in information scrap and rework was 33 minutes not spent performing value work.

Because I felt some of the anguish of the store personnel, I pulled the manager aside and shared some of my observations and suggestions for improvements. She was at first surprised, but listened and thanked me as we left.

IQ Lesson 8: Do not hesitate to communicate complaints and feedback about broken processes. If organizations do not hear our complaints, how do they know they have broken processes that may drive their customers away? Remember to "complain positively." Complain so as to focus on the process, not the people. The reactions you elicit will tell you whether or not the organization truly has customer care. If they don't, take your business elsewhere.

What do you think? Let me know at

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