Quality Processes Improve Profits, Employee Productivity For Truck Equipment Distributors

April 1, 1998
THREE DIFFERENT quality programs used by truck equipment distributors were the focus of a seminar at the National Truck Equipment Association's 34th annual

THREE DIFFERENT quality programs used by truck equipment distributors were the focus of a seminar at the National Truck Equipment Association's 34th annual convention and exhibition in Las Vegas, Nevada.

One of the distributors has developed a certification program for mechanics. By certifying his truck equipment mechanics, Peter Wells said he is taking a pragmatic approach.

"I want my employees certified by someone who works for a living and knows what it is to get his hands dirty," said Wells, president of Nevada Truck Equipment in Las Vegas, Nevada.

Wells is responsible for certifying truck equipment mechanics according to Nevada Truck Equipment's quality assurance manual. "I've been very pragmatic about quality processes used at Nevada Truck Equipment," said Wells. "As the owner, there is nothing more important I can do than to be involved in quality assurance."

In the truck equipment business, quality assurance and production capacity share an important relationship, Wells said. By spending time developing a quality program, Wells had to relinquish some authority in the company. For example, the shop at Nevada Truck Equipment is not operated by managers, Wells said. Rather, employees are organized into teams with a quality assurance representative.

Team Management Concept Every Monday morning, teams meet to talk about safety, quality assurance, personnel, problem areas, suggestions for improved performance, and sales and marketing strategies, Wells said. Unscheduled meetings take place as needed for employees to discuss and resolve other issues.

Before establishing a quality program, companies should analyze their weaknesses and strengths, Wells said. Then they can determine the best way to implement a quality assurance program.

Wells decided that every task performed at Nevada Truck Equipment should be included in a manual for a quality assurance program. When he began compiling the quality assurance manual, it was in a 3/4-inch binder. Now it's in a two-inch binder.

"The manual will probably be in two volumes before the year is over," Wells said.

Nevada Truck Equipment's 10-section quality assurance manual has an introduction and sections on operations, customers, products, production, regulations, compliance, solutions, personnel, and tracking, Wells said. The quality assurance program is divided into categories borrowed from ISO 9000 principles.

The personnel section addresses development of truck equipment mechanics. This section has categories for trainees, apprentices, and mechanics. In the apprentice program, Nevada Truck Equipment pays tuition for employees who enroll in welding courses at nearby Clark County Community College.

Challenge to Distributors With a greater emphasis on quality, the challenge is to build better products for less money, said Sam Teague Jr, chief executive officer of Teague Equipment Company in Denver, Colorado. More sophisticated customers are asking for high quality vehicles completed more quickly.

"Customers want everything done right the first time and at a competitive price," Teague said.

To remain competitive, truck equipment distributors must have a process of continuous improvement, Teague said. A key element of that improvement involves implementation of a quality assurance program.

"Employees must understand what is expected of them and how they fit into the quality process," he said.

Teague said the quality processes used at his company may be helpful to other truck equipment distributors. An important aspect of any quality process is effective communication with customers. This helps to ensure jobs are completed quickly the first time.

"It's important to establish a dialogue with customers to determine their expectations," he said. "Customers determine our standards. Ask your best customers about their expectations."

Ask Your Customers Teague invited one of his largest customers to visit his shop in Phoenix, Arizona, and explain his expectations to Teague employees. The customer agreed and made a presentation.

"We cleaned out one of the bays in the shop, rented a bunch of chairs, and had the entire workforce attend the meeting," Teague said. "We listened for over an hour while the customer told us his expectations and views."

The most important statement made by this customer applies to all truck equipment distributors, Teague said.

"When the rate of change outside your company exceeds the rate of change within your company, you're in trouble," the customer said.

Quality assurance isn't just about the quality of welds or the neatness of wiring. It also includes how the telephone is answered and the accuracy of invoices, Teague said. Documentation of procedures helps to ensure tasks are performed consistently.

This is more important than ever because of an increasing rate of employee turnover, Teague said. New employees need training on what procedures to follow.

"If your company is like Teague Equipment, you rely on word-of-mouth to pass information to new employees," he said. "New employees need written procedures to help them perform tasks correctly the first time."

Employees Need Procedures

Employees at Teague Equipment were interviewed about their work procedures. Their comments were transcribed for a quality manual and saved on computer disks.

When writing a quality assurance manual, begin by documenting procedures in the parts department or the clerical area of the service department, Teague said. These areas lend themselves to specific steps needed to complete tasks.

"The process of tackling such a project will open your eyes to the different interpretations employees have about doing their jobs," Teague said. "As a result of this project, you will start to see more consistent processing of work."

Employees will better understand how to complete tasks, he said. All 85 employees at Teague Truck Equipment follow formal quality assurance procedures.

In Denver and Phoenix, Teague's shops have a full time quality assurance person. It was difficult to justify the cost for a full time employee in this position.

"However, the payback has exceeded the cost," Teague said. "The embarrassment factor [over poor workmanship] has been reduced substantially."

For distributors that cannot justify the cost of a fulltime quality assurance employee, the best service mechanic may be able to devote time to quality assurance, he said. When training employees, make sure they understand the difference between quality assurance and quality control.

Different Quality Concepts "Quality assurance is catching non-conformity on the front side, and quality control is catching it after a mistake has been made," Teague said.

At Teague Equipment, quality assurance employees are involved in each job from the prebuild meeting to completion, he said. Employees at the prebuild meeting include fabricators, mechanics, the quality assurance person, and the production and materials managers.

"We make sure we're on the same page before starting a major project," Teague said. "The prebuild meeting can save many hours in the installation process."

As the vehicle is built, the quality assurance person is responsible for the prepaint inspections, testing, and final inspections. Employees make sure serial numbers for chassis and equipment are recorded on Teague's prepaint inspection form.

During a final-vehicle inspection, configuration of doors, compartments, and shelves on a truck body are checked for conformity to customer specifications, Teague said. The nuts and bolts used to mount the body on the chassis are torque checked.

Equipment and devices mounted on the vehicle are inspected and checked for proper mounting, Teague said. Holes are checked to ensure they are drilled properly before equipment is mounted.

Vehicle Quality Inspections

Grease is applied to hydraulic components to ensure paint cannot contaminate cylinders or valves, he said. Employees ensure outrigger pins and other necessary items are accessible, and that the throttle stop-start system works properly.

As part of a prepaint inspection, quality assurance employees verify that required labels and placards are ordered for the optional equipment on the vehicle, Teague said. Vehicle items not requiring paint are removed. Before the truck is sent for painting, it is washed and a copy of the purchase order is placed in the glove box.

A quality assurance program is not an option when a company decides that work orders must be completed correctly the first time, Teague said. Customers are more quality conscious, and truck equipment distributors must keep pace with their customers to remain competitive.

"More than ever before, customers expect us to deliver quality, competitive prices, and service," Teague said. "But the first expectation of most customers is quality."

Quality of Titanic Proportions For another truck equipment distributor, building quality trucks is a task of Titanic importance, Gene Kohler Jr, president of Kranz Automotive Body Company in St Louis, Missouri, said the legacy of the Titanic tragedy was lack of attention to detail with respect to the operation and design of the ship.

The Titanic tragedy highlights the need for proper procedures in production, Kohler said. Though not in the size or magnitude of the Titanic, trucks require attention to detail just as any mode of transportation. For most truck equipment distributors, implementing a quality assurance program is expensive and time consuming.

Distributors with quality programs have an advantage over competitors, Kohler said. Truck equipment distributors with higher quality standards have another advantage over the competition.

"With quality processes in place, the better the odds are that equipment distributors will improve their productivity and profitability," he said.

Kranz Automotive Body Company developed a quality control plan by combining the company's mission statement, a letter of commitment, a statement of corporate policy, incentive programs, and safety procedures. The company believes this combination will lead to customer satisfaction.

Mission statements vary for companies, but they should state long-term objectives and establish a mindset for personnel, Kohler said. It is important for the mission statement to be written by someone in top management.

The mission statement should be an overview and outline of areas needing constant attention for quality control, Kohler said. The plan is updated as needed. The direction and goals for this plan are examined by top management as required.

Aspects of Quality Kohler explained some other aspects of quality contained in the quality assurance manual at Kranz Automotive:

Vehicle-receiving procedures should be established and maintained in written reports.

Develop and map a route to road-test finished vehicles.

Use a thorough, final-inspection checklist to examine every aspect of the upfit.

Incentive programs are a good way to involve employees in the quality-control process. Kranz pays $50 each month for the best suggestion submitted by an employee.

"Employee incentives benefit everyone," Kohler said. "Incentives keep employees striving for efficient productivity. As a result, employers have better control of shop morale. This process leads to more money for everyone."

Safety is another important aspect of quality control. Injuries lead to downtime. Serious injuries to fellow employees will cause low morale, which will lead to low productivity.

Distributors need to develop and enforce inspection procedures. Inspection procedures are the means by which quality products and services are delivered.

"Without inspection procedures, we may as well scrap everything," Kohler said.

Installation Instructions The most important and time-consuming quality procedures deal with installation instructions, Kohler said. Distributors can incorporate the installation procedures of the equipment manufacturers. Instructions can be established for truck body types combined with the proper chassis.

"Strive for conformity on similar types of body mountings," he said.

According to the NTEA, profit for truck equipment distributors with proper quality procedures is twice that of companies without a viable quality program, Kohler said. High-profit distributors maximize productivity to gain a competitive edge.

Philip Crosby, one of the founding father's of quality programs in this country, says companies without quality programs lose revenue equal to 20% of sales, Kohler said. A good quality program can reduce this cost to 2 1/2% of sales.

Motorola is trying to reduce its defects to zero in a program known as Six Sigma, Kohler said. In 1991, Motorola reported five to six defects per million. Their goal of Six Sigma requires a reduction to 3.4 defects per million.

Reaching Zero Defects If Motorola reaches this goal, the company will produce defect-free products 99.99966% of the time, Kohler said. Even at a rate of five to six defects per million, Motorola's quality manager estimates that seven to nine percent of sales revenue is wasted on defects.

"The cost of fixing a defect late is 10 times what it would cost to fix a defect while the vehicle is in the shop," Kohler said. "The cost of losing a customer is even greater."