Five years ago the Customer Supply Services (CSS) unit of Matra BAe Dynamics faced a daunting uphill struggle. Poor spares and repairs performance had earned Matra BAe Dynamics the dubious title of British Waste of Space. The company's attitude to customers, according to the Turkish Airforce, received a mere five marks out of 10. It would take nothing short of a service revolution to turn the tide of customer opinion.
So, Matra BAe Dynamics formed the 140-strong CSS unit to provide world-class and worldwide support for land, sea and air defence systems, whatever their origin.
CSS was set up as a stand-alone business unit in 1992. It was staffed by existing Matra BAe employees drawn from a wide range of departments, including purchasing, contracts, estimating, project management, finance, stores, packaging and despatch. 'The spares and repairs problems we inherited included long turnaround times, overdue deliveries, unresponsiveness, uncompetitive pricing and no customer feedback,' explains Alan Pickard, head of Customer Supply Services. Turnover from the spares and repairs business had slumped from £40 million in 1983 to £10 million in 1992.
'Poor spares and repairs performance had begun to have a marked influence on customers' perception when considering future weapons procurement,' he admits.
To stem the tide, the new CSS unit took total ownership of the Matra BAe Dynamics support business, offering spares and repairs support to users of Dynamics products and also acting as a procurement agency for non-BAe products. CSS started by establishing its customers' four essential criteria of service excellence - high availability, reliability, reduced support costs and high support performance. It then embarked on a process of service improvements to drive down lead times, reduce costs, increase service and improve quality.
Given the traditional difficulties in defence support service - high product obsolescence, a volatile supplier base, complex technology and weak customer relationships - CSS has opted for a radical programme of process re-engineering and major technology investment, combined with a new determination to build customer relationships and identify their needs. 'Our vision is to become the customer's preferred supplier of defence support services by achieving unrivalled customer satisfaction,' says Pickard. Five values underpin this vision: customers - 'our highest priority'; people - 'our greatest strength'; innovation & technology - 'our competitive edge'; partnerships - 'our future'; and performance - 'our key to winning'.
Gaining closer contact with both domestic and foreign customers has proved a critical feature of improved client relationships. Methods used to increase understanding of customer needs and expectations include questionnaires, weekly phone calls, regular visits, overseas tours, customer meetings, report feedback forms and social occasions such as golf days or charity events.
CSS conducts a formal review with every customer. But, says project manager Tony di Stazio, the prevailing culture of many client organisations makes feedback difficult to gather. 'There is a tradition among many customers not to answer customer questionnaires or provide feedback on our performance.
We are currently trying to engender a new approach which allows us to capture perceptions of our service, but feedback is not always forthcoming.' Detailed information on customer buying behaviour, customer and country profiles and satisfaction measures (where available) are continually updated on a customer database.
The unit is also exploring ways of building partner relationships with customers. Links with RAF Wyton are being pursued with a view to developing a longer-term relationship. 'We are currently looking at new ways of contracting over the next five to 10 years,' says commercial manager Karen Lapping.
'RAF Wyton agreed to this partnership due to the "open-minded approach" taken by Matra BAe Dynamics.'
CSS can respond flexibly to exceptional customer demands. The unit's well-equipped workshops undertake the repair and manufacture of components and equipment in accordance with the most demanding military specifications and tailored to individual customer needs. Services offered include the procurement of spares for Matra BAe and non-Matra BAe equipment and systems; supply of upgrade kits and incorporation of modifications for Matra BAe-supplied equipment and systems; refurbishment of Matra BAe weapon systems and support equipment to agreed standards; repairs to Matra BAe, sub-contractors' and other manufacturers' hardware; and repairs to non-Matra BAe systems.
Orders once placed, CSS has improved the ease with which customers can get information on the status of their spares or repairs. Each customer has a named contact with whom to discuss the progress of their order, and status reports provide detailed information on work in progress. Targets for other improvements are based on customer-relevant measures. For example, the response time to enquiries has fallen from 100 days in 1992 to 20 days; the turnaround time on repairs has dropped from 350 days in 1992 to 70 days; and on-time deliveries have risen from 50% in 1992 to 95%.
Improved efficiency has gone hand in hand with increased business. New business enquiries have risen from 600 in 1992 to 2,500 and the business has grown from turnover of £10 million to £20 million.
The impetus to improve customer satisfaction is matched by a commitment to increase employee satisfaction. A review of the annual employee opinion survey by a working party of staff, managers and trade union representatives identified five areas for improvement: learning; leadership; communication and involvement; organisation, design and development; and reward and recognition. The unit began working towards Investors in People (IIP) status in March 1996 and is confident of gaining accreditation later this year. Managers can undertake a self-managed learning programme and all employees have access to the Programme of Assisted Self Study (PASS).
This provides staff with up to £100 to pursue any course of study. 'It aims to get people back into the swing of wanting to learn,' explains human resources manager Toni Naylor.
The view expressed in staff opinion surveys that leadership could be stronger has resulted in ongoing leadership training, including 360-degree appraisal and executive workshops aimed at developing leadership skills such as coaching. Employees themselves have become more involved in shaping the business through their participation in BAe's value planning process.
Staff work on their own personal value plan, which dovetails with their team value plan and CSS's value plan. CSS is working on new reward and recognition schemes intended to support its vision of achieving unrivalled customer satisfaction and break down the former 'them and us' managerial/employee divide.
These improvements in key measures of customer satisfaction and employee morale are matched by a swelling tide of positive customer opinion. Favourable endorsements include one from the British Army depot at Donnington - 'Your performance has allowed us to reduce stock lead times from two years to six months' - and another from clients in Brunei, who 'wish other contractors conducted business to CSS standards'. Thankfully, says Pickard, 'it's now rather a long time since we were known as "the supplier of last resort".'
Key Business Lessons
- Ensure employees understand their individual part in the overall service excellence picture
- Survey employee opinion to test morale and prioritise areas for improvement
- Benchmark performance against that of leading companies in other industry sectors
- Link customer feedback to corrective action.