+ 46 of 481 CASES Case 1-1 FedEx: Managing Quality Day and Night FedEx Homepage: www.fedex.com As darkness falls across America and most businesses does business, not part of the time, but all the time. are locking up for the evening, one company is gearing As a result, themes such as "Do it right the first time," up for a long night's work. FedEx, the world leader in "Make the first time you do it the only time anyone has the overnight package delivery market, delivers more to," and "Q = P" (quality = productivity) are important than 7.6 million packages per business day. Most of us parts of the FedEx culture. To reinforce these themes, know FedEx as the overnight delivery company with the company teaches its employees the 1-10-100 rule. white delivery vans, courteous drivers, and the distinc According to the rule, if a problem is caught and fixed tive purple-and-orange FedEx logo. But behind what the as soon as it occurs, it costs a certain amount of time casual observer sees is a very complex company with and money to correct. If a mistake is caught later in a the capacity to deliver millions of packages to millions different department or location, it may cost 10 times of addresses around the globe overnight. Throughout the that much to repair. And if a mistake is caught by a cus- course of virtually every day and night, FedEx mobilizes tomer, it may cost 100 times as much to fix. its army of 165,000 employees, 47.500 vans and trucks, A number of substantive strategies have been im- and 647 planes to get the job done. plemented by FedEx to support its quality efforts. Quality For FedEx, getting the job done means managing action teams (QATs) design work processes to support quality 24 hours per day, with a watchful eye on customer new product and service offerings. A set of service qual- expectations. The company's goals are simple: 100% cus- ity indicators (SQIs) has been established to determine the tomer satisfaction, 100% on-time deliveries, and 100% main areas of customers' perception of service. Through accurate information available on every shipment to every careful tracking of these indicators, the company generates location around the world. Although these sound like far- a weekly summary of how well it is meeting its customer fetched goals, the company goes to great lengths to try to satisfaction targets. An SQI team works through problems make them a reality. One of the principal weapons that revealed by the indicators. For example, if problems were FedEx uses in pursuit of its goals is its total commitment being created by confusion in FedEx labeling instructions, to quality management. the team would work on improving the clarity of the in- Quality management at FedEx encompasses all its structions. Some of the company's tactics to ensure total operations. Although the company is the acknowl quality are extraordinary. For example, every night FedEx edged leader in the air freight industry, a formal launches an empty airliner from Portland, Oregon, bound Quality Improvement Process (QIP) plays an inte- for Memphis. The jet follows a course that brings it close gral role in all the company's activities. to several FedEx terminal airports. The purpose of the jet is to swoop down and pick up FedEx packages if any of At the heart of the QIP program is the philoso- the company's regularly scheduled airplanes is experienc phy that quality must be a part of the way that FedEx ing mechanical difficulty. 10www.fedex.com. (continued) O hp SCJH-W10-SURI