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SYSTEM AND PROCESS
QUALITY IMPROVEMENT
FedEx initiated a quality-education program in 1985, but the program was statistically oriented and it lost momentum. By mid-1987, the FedEx customer-service department was struggling with problems related to rapid growth in the overnight service. At this time, FedEx selected Organizational Dynamics Incorporated (ODI), an international consulting firm located in Burlington, Massachusetts, to initiate a companywide education program on quality. ODI led workshops for senior vice-presidents and managing directors, and it trained managers to facilitate workshops for employees. The ODI process focused more on the thought processes in quality improvement than on statistical techniques. The goal was to get managers and employees to analyze problems in systematic and uniform ways.
The construction of the quality program rested on five modules:
1. The Meaning of Quality included the concepts of customer focus, total involvement, quality measurement, systems support, and continuous improvement as everyone’s job.
2. The cost of Quality emphasized rework and waste as the cost of not during quality work – breaking down total costs into avoidable versus necessary costs.
3. You and Your Customer helped show that everyone at FedEx was both a supplier and customer (see the section titled “Customer/Supplier Alignment”).
4. Continuous Improvement developed the themes of Module I and showed how to meet customer needs in innovative ways.
5. Making Quality Happen encouraged people to take a leadership role in implementing quality programs.
QUALITY ACTION TEAMS
In order to implement the framework of ideas in the modules, FedEx instituted quality action teams (QAT). The teams organized when employees saw a need to change the way they did their jobs. The QATs used a problem-solving process known as the FADE framework: focus on a particular problem or opportunity, analyze the data, develop solutions and action plans, and execute the plans for solutions (see Exhibit 2). In addition, extensive training was given to provide the QAT members with tools to augment the FADE process – tools such as fishbone diagrams, flowcharts, action plans, and pareto analysis.
With the FADE process, FedEx elicited creative solutions through employee involvement and careful analysis. For example, one QAT in the main package sorting hub devised mnemonic devices to help new employees remember the abbreviations for destination cities. These changes saved FedEx an estimated $3 million in training costs.
In addition to hitting improvement “home runs,” the QATs focused on small, incremental changes. According to Martha Thomas, managing director of disbursements, employees were charged with the challenge of constantly changing their systems to increase their throughput. Thomas viewed the main function of the QATs as catalysts to help FedEx cultivate a culture of continuous improvement: “We are trying to encourage a culture of smaller improvement – and more of them. I think 80 percent of the problems are system problems, so you constantly have to change the system.” She gave the following example.
Our customers, in the case FedEx employees, told us that they hated to want for expense reimbursements. We figured that, in any day, 100 percent of the day’s mail is processed: it may be 10 percent of yesterday and 90 percent of the day before. Why not do 100 percent of today’s mail today? Through QATs, the employees agured out how to stagger the schedule so it could be done. Now a check is written the same day we receive the expense report.
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