Derailment costs have been reduced more than one-third. Customer service, formerly located in 160 offices, has also been consolidated into a National Customer Service Center in St. Louis. Each day, the center now handles 20,000 customer calls on issues including placing orders and tracing cars. Lines of communication between organizational functions and departments are also clearer, resulting in better relationships between Union Pacific management and its vast unionized work force. Quality costs are defined as the costs of prevention, appraisal and internal and external failure.
Savings come from elimination of failures.
Quality leadership is now one of the strategic strengths through which the Union Pacific is bringing growth and strong forward business momentum to a mature business. At Union Pacific, it is a continuing process that is constantly worked on as the company strives to establish itself as one of the world class companies of today. In companies like Union Pacific, the approach is that quality is today's most powerful corporate leverage point for achieving both customer satisfaction and much lower costs. This recognizes that quality is a way of managing an organization that goes way beyond knowing all the right buzzwords. It means knowing how to lead company-wide programs which build on total quality management continuously to improve customer satisfaction, lower costs and improve human resource effectiveness.