WISMO Calls

[Fred Nickols, 951028]

I have wanted to respond to your post. Finally, after a month, here goes. I am
about a month behind in things I would like to do. You might say I'm "out of
control." Or, am I just not able to act in a way that gets what I want. The
theorists can try to figure out whether this use of the word "control" is the
one meant by EAB or PCT people.

Anyway, I hope you are still lurking out there.

I was involved in facilitating a team of employees at a mail service pharmacy
client trying to reduce fulfillment time-the time between when a prescription is
received at the pharmacy and when it is shipped. Customer satisfaction surveys
and proposal requests show that shorter fulfillment time is a performance
characteristic customers value and would like to see be improved.

Consequently, the management of this pharmacy was willing to spend much time and
capital to reduce fulfillment time say from a mean of 3 days to 2 days to please
their customers and increase their prescription business.

At this pharmacy, patients mail or call in their orders for prescriptions. The
pharmacy literature purports that you should receive your order within 10 days.

Using quality management science, the team focused on the customer; not what the
pharmacy does. We quickly reached consensus that the time of interest to the
customer is the total time from when they place their prescription order to when
it arrives in their mail box. This is called turnaround time.

Customers keep calling the toll free number inquiring about their order. These
WISMO (Where Is My Order?) calls cost the pharmacy millions of dollars a year.
After some data collection and analysis, the team concluded that it was
turnaround time, not fulfillment time, that probably mattered to the customer.
Further, the time to receive the order plus the time to ship the order to the
customer was several times greater than the time to fill the prescription (about
8 days compared to 2-3 days). Fulfillment time appeared to be the tail wagging
the dog when it came to improving customer satisfaction and reducing WISMO
calls!

Further analysis of the actual performance data caused the team to hypothesize
that it might be the dispersion or spread in turnaround time and not the mean
that was causing the WISMO calls. For example, the data showed that the
frequency of WISMO calls increased substantially as the actual time exceeded the
promised 10 days or the actual mean of 7 days.

What surprised us was that some people called within a day or two of mailing or
phoning in their order! We assumed that it was to check whether the order was
really logged, but we never checked with them.

This led the team to another hypothesis. If a patient received their
prescription in 2 or 3 days after order (phoned order, filled the same day,
mailed in one or two days), this may become their new anxiety trigger point for
a WISMO call.

We reasoned that if we could shrink the spread in actual performance (from say
2-20 days to 5-15), even with the same average time, the satisfaction and WISMO
calls would decline significantly.

We came up with two process changes which were quite easy and not very
expensive: 1. Prescriptions were entered into the filling system by date sent
by the customer instead of date received at the pharmacy. This compensated for
phoned versus mailed orders and for post office delays for mailed orders.
2. Fed Ex one-day service was used for shipping prescriptions based on a matrix
of elapsed time and shipping cost rather than cost alone. This compensated for
prescriptions which were up to that time slow and slowed down ones which were
fast.

The result? WISMO calls did decrease about $400,000 per year! But, this was
far less than what the team anticipated. Shipping cost went up slightly.
Overall, this team effort seemed to be a success.

This was before I understood anything about PCT. With PCT, the team would have
spent more time understanding the perceptions and reference values of the
anxiety or knowledge variables that the patients were trying to control. By
responding to those, rather than trial and error hypothesis testing, we might
have been able to help them and the pharmacy much more.

I mention this as one opportunity where application of a simple understanding of
PCT would most likely have produced a much more informed and successful result.
We may have missed an opportunity to save millions of dollars a year while
better satisfying the patients by reducing their anxiety.

This is why I am convinced that the science of management will be improved when
business leaders learn and apply PCT. The opportunities for improvement are
gargantuan, like the number of stars in the heavens.

Have you have taken any additional PCT actions at the Educational Testing
Service to reduce customer inquiry calls? Would you share your results with my
pharmacy client or be willing to consider a joint effort with them to prove the
benefits from managers understanding and using PCT to solve real problems-ones
that our current theories treat as unavoidable results because of a
misunderstanding of human nature and behavior.

Best regards,

Ken