THE WELCH COMPANY
440 Davis Court #1602
San Francisco, CA 94111-2496
415 781 5700
rodwelch@pacbell.net


S U M M A R Y


DIARY: July 15, 1999 01:13 PM Thursday; Rod Welch

Received letter from S&C on refund for car service on 990507

1...Summary/Objective
2...$408 Credit On Invoice of $1007 - $40% Refund - Accepted
3...S&C Requests Customer Use Another Vendor Due to Loss of Confidence
4...Proposal to End Business Relations is Incorrect and Conflicting
5...Partnership Can Make Customer and Vendor Happy
6...General Tire Warranty Submitted for Firestone Tires
7...S&C Offers Pro-rating Entitlement on Tire Warranty Based on Mileage
8...S&C Offers $100 credit on Caliper Repairs
9...S&C Offers $100 credit on Serpentine Belt Replacement


..............
Click here to comment!

CONTACTS 
0201 - S & C Ford                                                                                                                                                         O-00000569 0201
020101 - Mr. Larry Smith; Manager                                                                                                                                         O-00000569 0201
020102 - Service Department                                                                                                                                               O-00000569 0201

SUBJECTS
Millie's Mercury Sable, 940423
Ford Recall, Change Oil, Hoses, Tire Tread
Don't Get Mad; Get Better

0505 -
0505 -    ..
0506 - Summary/Objective
0507 -
050701 - Follow up ref SDS 16 0000, ref SDS 15 0000.
050702 -
050703 - S&C agrees to refund 40% of invoice for service on 990507, to pay for
050704 - warranty coverage, and due to inadequate support in the record on two
050705 - repair matters.  This effort may support improved management, and
050706 - could lead to use of the partnership model reviewed recently by Kaiser
050707 - for doctor/patient communications.
050709 -  ..
050710 - Submitted ref DIT 1 linked to this record, accepting S&C's offer, and
050711 - proposing continued business relations, and that the refund in this
050712 - case be applied to S&C's christmas fund.  Linked to Fortune article on
050713 - CEOs failing due to poor communication. ref SDS 13 0001
050714 -
050715 -     [On 990722 S&C is sending a check. ref SDS 17 0001]
050717 -      ..
050718 -     [On 990731 received credit memo. ref SDS 18 0001]
050720 -  ..
0508 -
0509 -
0510 - Progress
051101 -  ..
051102 - $408 Credit On Invoice of $1007 - $40% Refund - Accepted
051103 - S&C Requests Customer Use Another Vendor Due to Loss of Confidence
051104 -
051105 - Received ref DRT 1 from Larry at S&C Ford.  The document is dated
051106 - 990708.  There is no explanation for a 7 day delay receiving S&C's
051107 - letter today 990715.
051108 -
051109 - In sum, S&C offers a $408 credit.  This is accepted.
051110 -
051111 -     [On 990722 S&C is sending a check. ref SDS 17 0001]
051113 -      ..
051114 -     [On 990731 received credit memo. ref SDS 18 0001]
051116 -  ..
051117 - Larry's letter cites discussions "this time and the last time you were
051118 - in." ref DRT 1 2091  He cites no specific language nor inference from
051119 - any discussion, and none from the following express record...
051120 -
051121 -     1.  On 990603 telecon. ref SDS 7
051122 -
051123 -         This discussion*was confirmed by letter on 990611. ref DIP 2
051125 -          ..
051126 -     2.  On 990708 telecon. ref SDS 15
051127 -
051128 -         This discussion was confirmed by letter on 990708. ref DIP 3
051130 -  ..
051131 - Proposal to End Business Relations is Incorrect and Conflicting
051132 -
051133 - Larry makes the following comment...
051134 -
051135 -    a.  ...considering the fact that you do not have any confidence in
051136 -        my people's ability to make recommendations of repairs that
051137 -        should be made now or later, to prevent any breakdowns in the
051138 -        future, perhaps you should consider another repair shop to take
051139 -        your vehicle for service. ref DRT 1 2091
051141 -         ..
051142 -    b.  We do have a service department with an overwhelming amount of
051143 -        experience and qualifications.
051144 -
051146 -  ..
051147 - S&C's proposal is incorrect and conflicting for the following
051148 - reasons...
051149 -
051150 -    1.  A firm with an "overwhelming amount of experience and
051151 -        qualifications" should not be fired because of occassional
051152 -        snafus.  S&C's service recommendations have by and large been
051153 -        accepted, as seen in the record on 990507. ref SDS 6 1782  S&C
051154 -        reported on 990603 that errors occurred in the service on
051155 -        990507, ref SDS 7 0001; and, on 990708 S&C was asked for a
051156 -        written opinion on the proper dispositon.
051158 -         ..
051159 -    2.  S&C's willingness to make good on its quality care promises, as
051160 -        shown in Larry's letter today, ref DRT 1, builds confidence in
051161 -        the firm's leadership, which is essential for continual
051162 -        improvement.
051164 -         ..
051165 -    3.  Peter Drucker points out that firms have about the same
051166 -        resources and expertise, see review on 931130. ref SDS 1 2134
051167 -        Overtime, the occassional innovation monopoly, that propels
051168 -        some to intial advantage, is moderated by market forces, so
051169 -        that the only effective basis on which competition occurs is
051170 -        the quality of management.
051172 -         ..
051173 -        Under Drucker's rule, going to another service organization
051174 -        would not yield better mechanics, tools nor techniques.  A
051175 -        constructive response to error, is adding intelligence to
051176 -        management, so that resources are applied productively for
051177 -        reducing mistakes.  Gather the troops.  Review a case study,
051178 -        pointing out "Hey, we had to pay out 40% on this order.  It's
051179 -        hard to increase pay and vacation time if we keep this up. What
051180 -        can we do?  Who's got a suggestion?"
051182 -         ..
051183 -        The only justification to change vendors is loss of confidence
051184 -        in the management team to stand behind the work.  Again, S&C's
051185 -        willingness to be accountable builds confidence.
051187 -  ..
051188 - Of course, if S&C determines the customer seeks to avoid fair payment,
051189 - or is unreasonable, it should insist on declining service.  As well,
051190 - if S&C feels personality issues prevent effective working relations
051191 - with the customer, then a change should occur.
051193 -  ..
051194 - A third course, rather than the...
051195 -
051196 -           •  customer quitting the vendor, or the
051197 -
051198 -           •  vendor discarding a customer,
051199 -
051200 - ...is to look for constructive lessons learned, under S&C's quality
051201 - care program.
051202 -
051204 -  ..
051205 - Partnership Can Make Customer and Vendor Happy
051206 -
051207 - On 951102 a similar circumstance on the application of a tire
051208 - warranty, led S&C's Director of Parts and Service, Charles Mori, to
051209 - ask...
051210 -
051212 -                   ..
051213 -                  What will make the customer happy?
051214 -
051216 -  ..
051217 - Our goal today, remains the same... to ensure good service, and to
051218 - retain good working relations with S&C. ref SDS 4 5822.
051220 -  ..
051221 - One way to achieve this may be to move toward a method being tried by
051222 - Kaiser to foster effective doctor/patient communications through a
051223 - partnership business model.
051225 -  ..
051226 - This model is reviewed on 990625. ref SDS 12 4185
051228 -  ..
051229 - Better communication generally lies at the heart of most business
051230 - problems, and so it drives the quality of management cited by Drucker,
051231 - noted above, ref SDS 0 0736, as the core competitive advantage of
051232 - enterprise.
051234 -  ..
051235 - On 951106 the prior matter disucssed with Charles Mori on 951102, was
051236 - reviewed for lessons learned.  One concept that emerged was to strive
051237 - for improvement in business processes under the rule...
051238 -
051239 -
051240 -                      Don't get mad, get better
051241 -
051242 -
051243 - ...this is a key concept to avoid a cycle of escalating recrimination,
051244 - ref SDS 5 7233, that results from inevitable snafus, as occurred in
051245 - this case.
051247 -  ..
051248 - While these are all wonderful lofty ideals, the only way to give them
051249 - energy is to help people slow down long enough to think. In this case,
051250 - for a firm like S&C to pay out $408 is not of large enough moment for
051251 - leadership to pause long enough to think.
051253 -  ..
051254 - What may get some attention is for the customer to endorse the payment
051255 - back to the firm, say for the christmas party fund, or something.
051257 -  ..
051258 - This is a stronger message, than say notifying S&C not to write a
051259 - check, because in that case, no organizational capital is expended, no
051260 - machinery is moved, and so no notice is given of the underlying
051261 - issues, and in that case no improvement can occur, and the next
051262 - problem will likely be bigger, making it harder to achieve our goal
051263 - not to get mad, but to get better.  When stakes escalate, people get
051264 - mad spontaneously.
051266 -  ..
051267 - Our goal is to get better.
051268 -
051269 -
051270 -
051271 -
0513 -

SUBJECTS
Rotate, Tread Inspect, Rotate 990507
Warranty

0704 -
070501 -  ..
070502 - General Tire Warranty Submitted for Firestone Tires
070503 - S&C Offers Pro-rating Entitlement on Tire Warranty Based on Mileage
070504 -
070505 - Follow up ref SDS 15 8148, ref SDS 7 1935.
070506 -
070507 - S&C submits a General Tire warranty. ref DRT 1 7636
070508 -
070509 -     On 990708 Larry advised that S&C installed Firetone tires on the
070510 -     car during serevice on 990507. ref SDS 15 1935
070512 -      ..
070513 -     Investigation has revealed that the car has Firestone tires, not
070514 -     General Tires.
070516 -      ..
070517 -     It is unclear if the General Tire warrantly is intended to support
070518 -     S&C's refund offer, reviewed below; or, that it is intended to
070519 -     fulfill the request on 990603 for the warranty on the newly
070520 -     installed tires, ref SDS 7 3569, which is needed to guide future
070521 -     transactions.
070523 -  ..
070524 - We need product specs and warranty for Firestone tires.  This is cited
070525 - in the letter today. ref DIT 1 0360
070526 -
070527 -     [On 990722 called and left another message to submit product specs
070528 -     and warranty. ref SDS 17 9766]
070529 -
070530 -     [On 991006 received Firestone specs and warranty. ref SDS 19 0001
070531 -
070533 -  ..
070534 - S&C offers a refund of $208, explained as follows...
070535 -
070536 -     I have enclosed the General Tire warranty and have talked with the
070537 -     factory warranty manager.  He has agreed on issuing a goodwill
070538 -     credit for a percentage of the tire usage.  Based on miles used
070539 -     65% - $208.00. ref DRT 1 7636
070541 -  ..
070542 - S&C's calculation of $208 is unclear, but seems to be correct...
070543 -
070544 -   1.  The total cost of tire replacement is shown in the record on
070545 -       990507 in the amount of $340. ref SDS 6 3712
070546 -
070547 -       $208 = 65% of $320  -- What reconciles $320?
070549 -        ..
070550 -       Actual charges shown in S&C invoice 314868, ref DRP 2 1560, on
070551 -       990507 are...
070552 -
070553 -        4T 4 4 TIRE MOUNT, BALANCE
070554 -               365 CPC                                    42.00
070555 -         4 9003*057649* FT70C P205/65/R15                251.80
070556 -         4 STEMS TIRES STEM                                1.50
070558 -          ..
070559 -         HAZARDOUS WASTE TIRE REMOVAL $1.75 PER TIRE
070560 -               365 CWH                                     7.00
070561 -                                                        --------
070562 -                                                         302.30
070563 -
070564 -             Assume tax at 8.5%                           25.70
070565 -                                                        ========
070566 -                                                        $328.00
070568 -        ..
070569 -       This valuation seems close enough to S&C's amout of $320.
070571 -        ..
070572 -   2.  Larry's letter says that a General Tire Warranty is submitted.
070573 -       ref DRT 1 7636  Use of the warranty for Firestone tires is
070574 -       discussed above. ref SDS 0 8966
070576 -        ..
070577 -       The document needed for this calculation is the warranty in
070578 -       effect when the tires were installed by S&C on 951009, as shown
070579 -       in the record on 990507. ref SDS 6 2090
070581 -        ..
070582 -       General's warranty in effect on 951009 provided for pro-rated
070583 -       replacement, including mounting and balancing, if the tires had
070584 -       to be replaced within 48 months or 60,000 miles, as set out in
070585 -       the record on 990507, ref SDS 6 0546, citing the record on
070586 -       951020 which quotes the General Tire warranty. ref SDS 3 2146
070588 -        ..
070589 -       The applicable warranty provision on page 2 is section 2b and
070590 -       para 3. ref DRP 1 4461
070592 -        ..
070593 -       S&C's calculation aligns with these provisions.
070595 -  ..
070596 - Accordingly, S&C's offer is accepted.
070597 -
070598 -
070599 -
0706 -

SUBJECTS
Caliper RR Replaced, 990507

0803 -
080401 -  ..
080402 - S&C Offers $100 credit on Caliper Repairs
080403 -
080404 - Follow up ref SDS 15 3483, ref SDS 7 3483.
080405 -
080406 - S&C offers a refund of $100, explained as follows...
080407 -
080408 -     S&C Ford will refund you S100.00 on the brake calipers, due to the
080409 -     fact that we are unable to inspect the one in question. I do
080410 -     believe we were acting in the best interest of the customer by
080411 -     suggesting it be replaced because it was leaking. I also believe,
080412 -     if we had not replaced it, the driver would have had a larger
080413 -     repair bill down the road. ref DRT 1 4087
080415 -  ..
080416 - This offer reflects the record on 990507, ref SDS 6 4293, and review
080417 - with Larry on 990603. ref SDS 7 3483
080419 -  ..
080420 - It is therefore accepted.
080422 -  ..
080423 - We concur that S&C was acting in the best interest of the customer.
080424 - Errors in record cited by Larry on 990603 do not support a conclusion
080425 - that caliper work was required on 990507. ref SDS 7 3483
080427 -  ..
080428 - On 990507 repair estimate was $160 when the car was delivered to S&C
080429 - in the morning.  In the afternoon repair estimate had become grown to
080430 - $2,200.  On 990603 Larry advised that this 15 fold increase in the
080431 - cost of repairs was erroneous, due to miscommunication. ref SDS 7 2400
080433 -  ..
080434 - We share S&C's goal to achieve effective preventive maintenance.  One
080435 - way to achieve this goal and avoid undue cost escalation may be to
080436 - improve communications, as discussed with Larry on 990603. ref SDS 7
080437 - 9875
080438 -
080439 -
080440 -
0805 -

SUBJECTS
Serpentine Belt

0903 -
090401 -  ..
090402 - S&C Offers $100 credit on Serpentine Belt Replacement
090403 -
090404 - Follow up ref SDS 15 6671, ref SDS 7 6671.
090405 -
090406 - S&C offers a refund of $100, explained as follows...
090407 -
090408 -     S&C Ford will refund the $100.00 for the serpentine belt. Again, I
090409 -     am not convinced that it should not have been replaced because I
090410 -     did not see it. I will leave it as a questionable issue.
090412 -  ..
090413 - This offer reflects the record on 990507, ref SDS 6 6671, and review
090414 - by Larry on 990603, who reported drive belt should last about 60K
090415 - miles, and so it is uncharacteristic for replacement to occur after
090416 - only 44K miles as occurred here. ref SDS 7 5016
090418 -  ..
090419 - S&C's offer is therefore accepted.
090420 -
090421 -
090422 -
090423 -
090424 -
090425 -
090426 -
090427 -
0905 -
Distribution. . . . See "CONTACTS"