Simplified Strategic Planning

How one customer helped a distributor improve its operations

by Buddy Smith

It all started during a rainy vacation three years ago. My family and I were in Central Florida, and it did nothing but rain the entire time we were there. In between board games and trips to the shopping mall, the rain gave me a chance to catch up on reading Jim Collins' bestseller, Good To Great. I came back from that vacation and decided to really commit myself to working on the business and instilling a spirit of continuous improvement in everybody.

We formed a Process Improvement Team that brainstormed some good ideas, and it was really encouraging. One of our sales managers who was on the team, during lunch with one of his biggest clients, mentioned the work we were doing to improve the company. The client, Southeastern Freight Lines, had gone through a similar process a few years earlier and suggested we read another book, Simplified Strategic Planning by Robert Bradford.

By this point, I was like a sponge, soaking up everything I could to improve the business. I devoured Bradford's book in about two days. I personally took the client to lunch and told them I wanted to move forward, and was going to call the author for help. The client instead told me not to spend the money and said they would help us. One of the co-chairs of Southeastern's Strategic Planning Team, Carmen Smoak, came over and described their experience, and we agreed to let Carmen lead us through the process.

The Process
Simplified strategic planning is a process that takes six days per year. In March, we meet for two days with our senior managers to go through a checklist of all the things that are going on in the business. After that initial session, everyone has some research to do on the competition, regulations affecting our business, potential strengths and weaknesses, and similar topics. Six to eight weeks later, we re-convene for another two-day session and we identify perceived opportunities and then put them through a screening process prior to Session Three, which takes place six to eight weeks after the second session for two more days. In Session Three, the ideas that pass the screening process become action plans for the following year. So it is three meetings, two days apiece, six to eight weeks apart, where we develop our strategic plan, ending with a one-page list of action steps to be completed in a 12-month time period.

When the next year rolls around, you start the process all over again. The more you do it, you get better and better at it and discover more opportunities. Carmen facilitated it last year and we are in the process of starting our second year. We are currently about halfway through our list from last year.

Southeastern Freight Lines' Carmen Smoak (r) helped Carolina Material Handling Services President Buddy Smith lead his company through a transitional strategic planning process.

Carmen attended the MHEDA Business Retreat with me last fall, to see how other people do it and maybe incorporate pieces from other sources. Carmen is still on board leading us through Year Two, but we are grooming someone internally to take over. This year, he will be in the meetings and he'll watch as Carmen leads us through. Within the year, he'll start taking over the leadership, and my goal is next year he'll lead the whole thing.

An interesting side note is that David Scoggins, Southeastern Freight Lines vice president of human resources and quality, and I became friends throughout this process, and I asked him to serve on our Board of Directors. So I actually have one of our largest customers on our Board. It may seem strange, but Southeastern Freight Lines wants to do business with good companies and wants us to make a profit. What better way to improve than to have a customer on your Board who helps you do that? Southeastern Freight Lines believes in developing true partnerships with their suppliers due to the win-win environment it creates for all parties involved.

The Results
When we started the process, I wasn't really sure what results to expect. I knew I wanted something to be better at the end of the year than it was at the beginning of the year. We ended up taking on several projects. We now have a new hiring process and a testing process for job match. We have an automated quote system for service quotes and a follow-up with customers who have chosen not to fix their forklift. We are going to launch what is called a touch-base meeting project where everyone in the company will meet with their supervisor as a group once a month and there will be a set agenda to talk about where the company is going, how the department is doing, and requesting feedback on better ideas to improve the company. Along with that, there will be a formal recognition program for associates to earn points to turn in for prizes.

Mostly what we've learned in the first year is what not to do. We learned a lot about taking on way too much, which we did. We originally tackled 12 projects but removed some of them after a few months because we didn't have the resources or the time to do them well.

Examples of Improved Efficiency
We came up with quite a few positive results from this process, from documenting procedures to report automation to customer service.

The Right Tools — We realized that we didn't do a very good job of making sure new technicians have what they need to do their job properly. New technicians bring their own tools, and the company has certain tools. It used to be that we'd give them the keys to a van and tell them to go fix stuff. We formed a tools task force to study everything that was on our vans and made recommendations of what needed to be on our vans. Now we have a written procedure for new technicians that includes a list of mandatory tools that the company provides, where to go to get them, and how much they should cost. We have an inventory procedure to make sure those tools are always on the van and not lost, broken or stolen. We know to tell the technician what they are required to bring. We discovered that our service techs really became frustrated without the right tools, which, of course, makes customer service suffer.

Report Documentation — We hired a full-time IT person who immediately was able to extract some information out of our operating system to give us much better information to make decisions. For example, we developed a work-in-process procedure. We want to move our documents as fast as possible, both for cash flow purposes and better customer service. Now, I get a report every Monday morning telling me how many days on average a technician or a branch is taking to process their paperwork. We posted that information publicly, and we've seen those numbers drop considerably. That is only one example of many reports we now use.

Customer Preferences — I often walk around and see Post-It notes on people's desks indicating customer preferences. It could be anything from billing them only at the end of the month or a preference for a particular service technician. Whenever there's turnover, the new person doesn't have those reminders. We put a team together to figure out how to manage that process more effectively. We discovered in our system a place to input customer preferences, so anytime a work order is opened up, we can make sure their request is noted on their account. While we can't always guarantee that, we certainly will try to make that happen.

These are a few examples of how we used the strategic planning process to improve our material handlingcompany's efficiency. Throughout 2007, many new processes and procedures will continue to be implemented. It's a great, easy way to provide better customer service.