Plan on the unexpected - Johnson and Johnson Edition

I took a group of MBA and M-Eng students to Johnson and Johnson Ortho Clinical Diagnostics in Rochester today.  This plant assembles large medical laboratory chemistry testing machines as well as the consumables products used in medical lab testing (chemicals, chemical slides).  The large testers are very complex and very expensive and so they are coupled with a service contract.  

The highlight of the trip for me was to see their "e-Connectivity™ Interactive System Management" or  predictive maintenance service system that track in real time newer models' operational metrics and can predict if a machine is on the verge of failing.  The machines are connected via a VPN to the Rochester plant where a team of service engineers and specialist sit in a war room with a huge interactive map with color coded flags represent nearly 2000 separate machines world wide.  If a flag is green or yellow there is not much to worry about, but if the flag turns to orange, the team can immediately create control charts of the past performance of the machine and identify when things started to slip.  They then deploy their field service technicians and peform preventive maintenance.  With this system in place J & J is able to know about a potential problem well before their customer recognizes it saving J & J the cost of emergency, high cost repair and saving their customer down time.  

These machines are very complicated and are a major capital investment for medical laboratories so J & J is trying to create an experience of reliability and a sort of  "we got your back" feeling that can set their customers at ease.  Also, J & J is doing a good job taking their learning from after-sales service and putting it into their manufacturing design, a sort of "Design for Serviceability" model or maybe a "Design for Predictive Maintenance" as they identify more and more of the top issues of break downs and find ways to proactively capture machine performance metrics that can be used to predict failure.

Adding a service to a manufactured good is becoming a source of competitive advantage. This sort of planning for lapses in reliability can add real value to a product and be difficult to replicate by competitors.  Plus, it means that you get to put up a war room in your manufacturing plant... cool...

Plan on the unexpected - UPS edition

Service firms have to deal with constant variability and unexpected events.  One approach is to reduce the variability and take steps to error proof the process in order to ensure unexpected events don’t happen.  This is not always possible, so another approach is to manage operational risk by planning for the unexpected by actively and dynamically making course changes.

From the UPS Blog:

“With recent weather events crisscrossing the United States, UPS has been in overdrive managing its network to ensure on-time delivery of time sensitive packages. Events such as snow storms, mechanical failures or crew illnesses can cause daily challenges, but it’s all in a day’s work for the UPS Airlines contingency team.”




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Customer facing situations certainly require a similar level of flexibility and pre-planning.  A good read on the subject is Booz’s  article titled “ The Empathy Engine”

To capture this broader conception of customer service, we introduce the Empathy Engine.  In the Empathy Engine, senior leaders, managers and frontline employees work together to collectively stand in their customers’ shoes in order to better understand and resolve customer needs.

            Specifically, Empathy Engine companies consistently strive to:

·         Understand and resolve customers’ problems at minimum cost to customers

·         Create a company-wide culture of empathy

·         Empathize with and give decision-making power to their frontline employees so they can focus on generating excellent customer service”

There is much more, but the crux of the story is that good service firms anticipate when a problem might arise and try to make corrections before having a service failure.

Do you have any examples of contingency planning that leads to better customer service?  Leave a comment.