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Customer advisory panels provide quality input for International Paper.

The wood products division of International Paper won't be concerned when competitors install high-tech telephone systems to answer customer calls. They know it's not what the customers want.

"They want warm bodies, options for talking to someone else, to leave a message or just hold," said Jim Watson, sales and marketing manager in the company's Dallas corporate office. "We're back to a very low-tech, very personal, warm-body telephone system," he said.

The division realized how customers felt about telephone service after creating customer advisory panels in 1987. Today, Watson credits wood products' success to its efforts in customer satisfaction measurement.

"I firmly believe we would not be where we are today as a preferred supplier with many of our customers if we hadn't made this commitment to the customer advisory panels," Watson said.

International Paper's commitment to measuring customer satisfaction is growing, said Mike Todhunter, an associate in the company's statistical quality control resource group based in Memphis. While the company has always tried to meet customer demands, measuring satisfaction is an idea just catching on.

"It's a societal shift," he said. "Ten years ago, you wouldn't get a survey card to fill out after getting your car washed. Today, you do. I attribute it to an increased awareness on the part of the American people for quality and to their demand that they get full value for their money," Todhunter said.

International Paper is a worldwide producer of printing and writing papers, paperboard and packaging products, and wood products. The company also operates specialty products businesses and distributes paper and wood products. It has manufacturing operations in 25 countries and exports its products to more than 130 nations.

International Paper's timber and wood products group makes lumber, plywood, oriented strand board, and treated wood products such as landscape timbers, utility poles, and decking products. It's a $650 million business to the Fortune 50 company which posted 1991 sales of $12.7 billion.

Watson said the division's customer advisory panels meet twice a year and are an integral part of the group's strategic plan. Five customers are on each panel, and each customer serves three times.

Customers are mailed a questionnaire concerning fourteen aspects of service quality and seven aspects of product quality. Each question asks the customer to rate the company on how well it satisfies the customer, how well the competition satisfies him, and how important each issue is to the customer. About a month later, the results of those surveys are used to start a focus group discussion with the customers.

It was a risky move, asking customers to spend so much time evaluating the business, Watson said. "They really have doubts about whether you're serious or not, or whether anything is going to be gained from it. Other companies have formed similar groups, and it's turned out like seminars or commercials."

Following the meeting, company managers develop action plans, assign teams to solve problems, then write to the customer with action plans and a schedule for putting improvements in place. "I think it gives the customers a feeling that they are important to International Paper," Watson said. "Typically, we see a fairly significant jump in business with customers who serve on a panel."

As a result of customer panels, the division changed its telephone system, uses fax machines to acknowledge orders quickly, extended office hours to serve customers on both coasts, improved on-time shipment performance, and made many other service improvements.

Also, managers began visiting customers in person more often. "They said they don't want to see us every day, or even every month. But, they want to see us. It's important that we see and understand their operations."

The division wasn't always so committed to learning what the customer thought. Like many corporations, International Paper did not think it had to ask. It already knew.

"We thought we were pretty good. And, in fact, we probably were," Watson said. "I often tell people that we are lucky in that we're in an industry that typically has not been an outstanding performer in product quality or service. Our customers had gotten used to not getting those things. So when you make changes to improve, you can really set yourself apart from the competition in a hurry," he said.

Customer satisfaction measurement got a boost from International Paper's quality management department last year when it sponsored eight forums throughout the country for managers. The forums led the department to publish "Customer Satisfaction--A Quality Approach," a booklet explaining the tools and benefits of measuring customer satisfaction.

While customer satisfaction was part of the corporate goal--quality policy and management principles--it was not added as one of the elements of the company's quality improvement process, called QIP, when the quality management department began in 1984. Today, it is one of the department's primary focuses and part of the 1992 corporate quality objective.

"We knew early on that in order to reach our goal of customer satisfaction, we had to change the way we dealt with each other internally before we would be truly successful externally," said David Bailey, vice president and director, quality management.

Todhunter said, "When we started the quality program, one of the first difficulties was getting people to think of working on teams. The focus was on products and results--it was problem-oriented." Now, it is teams that are driving customer satisfaction measurement. Within the wood products division, the idea for customer advisory panels first began with a joint manufacturing/marketing task team that wanted to build a stronger bond with customers of the lumber and plywood mills.

While many of the company's business groups such as Springhill, Hammermill, and Masonite are measuring customer satisfaction, few have given it as much commitment as the company's bleached board division. The group has formed a customer satisfaction measurement team, comprised of managers from sales, marketing, operations control, and customer service. The team meets every four to six weeks to talk about how to serve customers better.

The division has surveyed customers about shipping and delivery and has conducted major surveys with its cup-stock and folding carton board customers.

Bleached board is part of the company's paperboard and packaging business segment, which posted 1991 sales of $3.4 billion. The division makes paperboard used for cartons that package products such as milk, juice, food, and cosmetics.

"It's proven to be a good learning experience for us because we've seen where we've made mistakes, and we're determined not to make the same mistakes again," said Ingrid Kallai, marketing analyst for the bleached board division.

"Somehow or another, you have to have your finger on the pulse of the customer--what they want and how you're doing," Todhunter said. "If you can get that through your sales force, through trade journals, or through watching your own orders and customer complaints, that's fine. But in many cases, you can't do that. Your markets are too big and diversified," he said.

"When you rely on those kinds of subjective methods, your results can be biased." Kallai agrees, although she says some managers argue customer satisfaction measurement often tells them what they already know.

"Internal checks and measurement devices tell you whether you're doing the right things," she said. "But customer satisfaction measurement tells you whether you're doing the right things right. We're building a brand new relationship. We want to be there for them when they have a problem. We don't want problems they've identified to happen again," Kallai said.

Watson said, "We can internally think that changes need to be made and might argue back and forth. But when the customer says it, it's the gospel. The organization's resistance to change is non-existent if the recommendations come from the customer panel, and the panel causes change to happen at a more rapid pace."

Watson said his division's efforts have been well spent. Not only has attention to the customer improved the company's image, but the customer-supplier relationship has changed into a friendship, he said.

"Customers want to do business with us, and many have identified us as their preferred supplier, based on product and service quality. We've listened, and we've improved."

Ms. Dickie is manager of Communication Programs at International Paper in Memphis.
COPYRIGHT 1992 University of Memphis
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992 Gale, Cengage Learning. All rights reserved.

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Title Annotation:International Paper Co.
Author:Dickie, Kaye
Publication:Business Perspectives
Date:Jun 22, 1992
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