Baldrige National Quality Award 1996 Recipient
DANA Commercial Credit Corporation
When it comes to customer satisfaction, competitor performance, operational
effectiveness, and workforce capabilities, Dana Commercial Credit Corporation
always wants to know the score. A provider of leasing and financing services
to a broad range of commercial customers, the Dana Corporation subsidiary
has developed a collection of quality-linked scoring processes that assess
how the company is progressing in its pursuit of continuous improvement
goals set for all key areas of the business.
Since 1992, when DCC embarked on an effort to improve teamwork and organizational
communications, the company has scored gains in the quality of its performance,
customer satisfaction, and the percentage of repeat business. For example,
DCC's largest product group the Capital Markets Group (CMG) has closed
all of its multimillion-dollar transactions on time for the past five
years. Dealer Products Group-U.S. (DPG), the next largest group, has reduced
the time it takes to approve a transaction from about seven hours in 1992
to an hour or less in 1996.
Since 1994, CMG's customer- satisfaction scores have exceeded four on
a five-point scale and, in 1995, topped the industry average by almost
two points. DPG has scored between eight and nine on a 10-point scale,
or nearly three points higher than the average for its industry.
DCC competes on the basis of value-added lease products and services,
not just financing. Since 1991, the dollar volume of DCC leases has more
than tripled, to more than $1 billion.
Since 1980, when it was started with a $2.5 million investment
by its corporate parent, DCC has grown to become the 11th largest among
2,000 U.S. leasing companies, with 1995 revenues of nearly $200 million
and total assets of $1.5 billion. Headquartered in Toledo, Ohio, DCC consists
of seven major product groups, each aligned with a different market segment.
These include leveraged leases for power generation facilities and real
estate properties with values up to $150 million, and leases to help commercial
equipment resellers, manufacturers, and distributors sell equipment ranging
in price from $4,000 to $3 million. Unique transactions are DCC's speciality,
such as arranging the short-term lease of microcomputers for the television
network covering the 1994 Winter Olympic games, providing full-service
leasing of on-site photo processing equipment to retail outlets, and helping
put a major gas processing facility in the North Sea on-line. DCC lease
contracts ultimately are prepared for businesses and organizations that
lease equipment, facilities, or buildings. However, the company views
financial intermediaries, such as investment bankers and equipment manufacturers,
and distributors as its primary customers, since they are the major source
of leasing recommendations and referrals.
Most of DCC's 547 people are located in Toledo and Maumee, Ohio; Troy,
Mich.; Toronto; London; Paris; and Zurich. The company's continuous improvement
process is led by the Division Operating Committee, chaired by DCC Chairman
and Chief Executive Officer Edward Shultz, and includes heads of the seven
product groups and major support units.
Adding Value for Customers
DCC aims to be the preferred financial services provider in its selected
markets. To achieve this objective, DCC is increasing customer satisfaction
through the commitment, skills, and innovativeness of its people and through
its quality improvement system.
The system provides the strategy, direction, incentives, tools, and resources
necessary for continuous improvement, but, by design, it is customized
so each group concentrates on the particular requirements and expectations
of customers in its market niche.
DCC's strategic plan integrates customer, operational, people, supplier,
and quality plans into seven guiding plans, one for each product group.
Product group improvement goals are translated into actions that address
the company's key business drivers customer satisfaction, knowledgeable
people, quality processes, and profit for the shareholder. In all groups,
action plans are linked directly to anticipated improvements in meeting
four key customer requirements, which are determined by the Division Operating
Committee but adapted to each market. Customer-related performance metrics
are established for each process and each improvement project.
Measurements are tracked closely. Each month, scorecards are compiled
to inform all DCC people of progress toward reaching goals for customer
satisfaction, human resources, and key processes. A monthly competitor
scorecard also is prepared to compare DCC performance on key customer
satisfaction measures. In 1995, DCC piloted a customer expectation scorecard,
compiled largely from information gathered by cross- functional transaction
teams that work closely with customers in the design of leasing arrangements
and new products. Now deployed company-wide, this scorecard helps alert
DCC to changing customer requirements and indicates how well the company
DCC's SWOT analyses compare company performance to benchmark measures.
Performance in the key process areas is flagged as a Strength or Weakness
compared to the benchmark, as an Opportunity, or as a Threat to the business.
DCC's mission statement and the Dana Style of Management assert that people
are our most important asset. To promote organizational flexibility and
responsiveness to customers, DCC limits the number of management layers
within its groups to five or fewer, and its just do it policy empowers
DCC's people to act on their ideas for improvement without prior approval.
Major emphasis is placed on retaining people and cultivating company loyalty,
accomplished through a promote from within policy, mentoring programs,
educational opportunities, and an extensive reward and recognition system.
Currently, all executive positions and 95 percent of supervisory and management
slots are filled by people who advanced through the company.
The company uses education and training to differentiate itself from its
competitors. In 1992 it created the Education Group to develop and teach
courses in interpersonal communication, quality, and marketing, as well
as in technical areas needed to structure customized leases. In all, more
than 40 courses are offered. Each DCC person received an average of 48
hours of formal education and training in 1995, better than chief competitors
and almost three times the leasing-industry average. The company also
provides 100 percent reimbursement for successfully completed college
Training and education needs and effectiveness are reviewed monthly. Careful
attention is paid to further enhancing the skills of people, including
senior managers, who have direct contact with customers.
DCC is continually alert for opportunities to improve its leasing products
and service delivery. Aver- aging about 10 per person in 1995, employee
ideas have been an especially productive means for improving DCC's performance
and for diversifying and adding value to its product offerings. About
78 percent of all ideas were implemented.
The company's progress in improving performance and increasing customer
satisfaction is mirrored by gains in financial performance. Rates of return
on equity and assets have increased more than 45 percent since 1991. DCC
also credits its continuous improvement efforts with helping to lower
borrowing costs, the company's largest expense.
DCC now accounts for at least 10 percent of the Dana Corporation's overall
profitability, and it was the first division to achieve the gold level
of performance in the annual competition for Dana's Quality Leadership
Award, which is modeled after the Baldrige Award.
As it does with its customers and suppliers, DCC works in partnership
with the communities where its offices are located. For example, it has
provided computers to local schools and charities. In Toledo, when negotiating
tax incentives for relocating its new headquarters building, DCC committed
the equivalent of 45 percent of the resultant tax savings to the Toledo
School Board. As a result, the public school system will receive 1.5 times
more money from DCC than from a normal tax distribution. The city has
adopted this approach for future tax incentive offerings.
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Last updated: 11/29/2011