_________________________________________________________________ **NOTE** This article was posted on the TQM BBS for public download with the express permission of Joiner Associates Incorporated. But the text is copyrighted and may not be reproduced without permission. For permission, further information, or a list of other publications available from Joiner Associates, call or write: Susan E. Reynard Senior Editor Joiner Associates Incorporated 3800 Regent Street Madison Wisconsin 53705 Telephone: 608-238-8234, extension 232 Fax: 608-238-2908 _________________________________________________________________ BACK FROM THE BRINK: HOW QUALITY IMPROVEMENT CAN AVERT A CRISIS Susan E. Reynard I. Introduction There is a plant in the Midwest that is the one of the oldest of its kind. Once on the verge of collapse, the plant is starting to gain a reputation within the company for its increasingly high levels of quality, productivity, and morale. The workers at this plant say the key to success is to focus on the needs of your customers, to work together, and to use scientific tools to eliminate the sources of problems. Four years after starting down this path, the plant workers have many success stories that prove the advantage and necessity of taking this approach. One striking example concerns one of the oldest pieces of equipment in the plant. In 1982, this machine turned out 8000 units of material--a showing that doesn't seem too bad until you learn that nearly 18 percent of it was waste. Expensive waste. Under those circumstances, it wasn't surprising when rumors that the plant was about to close started to surface regularly. As one worker recalls, "I felt like I should've gone to work carrying a hammer and nails in case they decided to board up all the windows and shut the place down." Four years later (1986), the figures tell a different story: (1) production had nearly doubled in that time span; (2) the unit cost dropped 32% despite increases in the cost of raw materials; and (3) only 3.1% was rejected as waste even though the plant had tightened its quality specifications each year. This area was only one of many in the plant to show such impressive gains. The real surprise, though, is that the plant achieved these remarkable gains in quality and productivity with no significant capital investment during this period. "We didn't retool the plant, or anything like that," says a process engineer. She adds that the changes came about primarily because the plant management started to manage in ways that allowed workers to use their experience and knowledge. In other words, they stopped blaming workers for problems and instead gave the them the tools and the opportunity to work together to solve problems. It's an approach that has worked so well that it would be easy for the people at the plant to paint a rosy picture of the joys of quality improvement. They have, after all, brought their plant from the edge of oblivion to the threshold of prominence. But they've learned that it takes hard work and lots of time to make these kinds of gains, and anyone who thinks differently will be doomed to failure. The turnaround at this plant started in 1982 concurrent with the change in management's attitude. The plant superintendent had realized that the only way to survive was for management to see that the workers could do the best job possible. His first move was simply to ask everyone in the plant what they thought was the worst aspect of working at the plant. The answers that topped the lists all dealt with workers not knowing how they were supposed to do their jobs. There were "no job descriptions," he was told. "Nobody knows how they're supposed to do their jobs." "We've got new people training new people." "There's no place we can go to check what we're doing." "We can't all do the same thing if there aren't any manuals." In fact, there was little if any uniformity in work procedures: hourly operators who have been at the plant for several years remember how they each used to carry around their own black book with notes on what settings and tricks they "knew" were the best ways to run the process. The remedy for this situation was to write handbooks describing standard procedures for workers to use. The plant superintendent realized that the people who knew the jobs best were the people who did the jobs, so he asked a group of hourly operators and supervisors to write the manuals. Though these employees were surprised at first by his request--after all, he was management and management usually takes this kind of responsibility out of the workers' hands--they agreed to give it their best shot. They were freed from their regular duties and given three months to complete the task; they were done in six weeks. "The people did such a good job on these first manuals that they are still the ones in use. We've made a few minor alterations, and update them every year, but most of the job descriptions haven't changed much," says the superintendent. In fact, the manuals are now being used as examples in other corporate locations as other plants put together training programs for employees involved in the operation of similar machines. With the manuals completed, the next step was to retrain the hourly workers. Everyone in the plant got retrained no matter how long they had worked there, because a lot of the workers on the line hadn't been trained right the first time. To get all this training done, many of the writers of the manuals were taught some training skills, and they became the trainers for the rest of their co-workers. This system of peer training is still used: employees volunteer to become trainers, and work three months or so before they are rotated back into their regular jobs. II. "Stop Shipping Bad Products!" The original training done in 1983 did help improve the uniformity of the product made at this plant, but the facility was still far from being competitive. Late that year the plant management decided they had to do something more dramatic to prove their commitment to improving quality. "For a long time we continued to focus on cost. Our world ended at the shipping door, and our motivation was to ship as much as we could," says an engineer at the plant. "We realized that this was hurting our efforts to make better products and hurting our reputation with customers." Since that time, all the improvement efforts at the plant have been centered on reaching only one goal: to never have the plant's products be a problem to a customer. First they decided to make quality problems into cost problems. Two of the problems attacked first were waste and delay. They realized that the only way to really show how serious these problems were, was to stop shipping bad products. "Keeping the waste around was a visible sign of the need to change. And in the long run we knew it would be cheaper than shipping the material out, because we knew the customer was just going to ship it right back," says another process engineer. Luckily the plant had leadership both from the top people at the plant and from several outside the plant. A staff assistant at the plant recalls, "We knew we were going to have to take some heat. It was quite a shock to many people when we stood up at one meeting and said 'next month our waste is going to go up.' Some people practically fell off their chairs." But, says the plant superintendent, since senior managers outside the plant had faith in what the plant was doing, they were able to carry through with their decision to take a hard line on shipping only high quality product. It was hard at first on everyone, not just the plant management. "People want to make good product, but that's not possible when they are also being told they are going to be blamed for the waste," says the process engineer. "It's hard to change old habits and old attitudes. It took a lot of talking, over a long period of time, to get people to believe that they weren't going to get blamed." After all, who wants to be the first person to start throwing out product? Still, the plant stood by its commitment. In fact, one time they rejected everything made during an entire 24-hour period. And gradually this attitude began having an impact: having to face the growing stockpile of waste drove home the message that things were changing at the plant. Now the plant team could begin identifying and correcting the causes of waste. III. Finding A Framework Not long after these changes were inaugurated--in early 1984--all of the top plant management went to hear a presentation by Brian Joiner, a leading quality improvement consultant from Madison, Wisconsin. Joiner spoke at length about the tools, attitudes, and philosophy of quality improvement, including the teachings of W. Edwards Deming, one of the most prominent figures in American quality improvement. Deming has developed a list of "14 Points," which embodies the basic lessons organizations need to learn if they are to survive increasingly tough international competition. "We came back from the seminars all fired up and ready to begin," says the plant superintendent. For the most part what they heard validated actions they had already taken, but it also gave them a framework on which to base future plans. And they knew where to look for concrete tools they could use to speed up progress at the plant. Thus, in 1984, teams of workers started exploring and learning more about Deming and about Kaoru Ishikawa (a leader in Japan's quality movement). One production engineer had already spent a great deal of time learning about the scientific approach to data collecting and decision-making that underlies Deming's and Ishikawa's lessons. He was able to serve as an in-house consultant to the managers and team members. This scientific approach and the associated basic statistical techniques now form the backbone of all projects undertaken at the plant. Such tools allow workers to get the most out of their experience and their knowledge about the processes they work with every day. The following list highlights just a few of many improvements made at the plant. * The useful life of a primary part of the machinery used in the production process is now two-thirds again as long as it used to be. At $2,000 a piece to replace, this extended life has led to substantial savings. * The operators used to have to change one machine component 20 to 30 times a day, and in doing so would typically produce 300 pounds of scrap each time. Now they only have to change this component 1 to 2 times per shift (= 3 to 6 times a day), and cause less than 100 pounds of waste each time. * Another extremely expensive part of the machinery used to have a life of 800 hours. When people were told the cost of replacement was $10,000 each time, the crews found ways to handle these parts more carefully. Now the life is 1400-1500 hours. * Studies of the raw material used in the plant showed that the total cost was less if a more expensive, higher-grade material was bought. (The payoff came in less rework, less scrap, and less downtime on the machines.) * There used to be seven or eight unplanned shutdowns a week when maintenance would have to be called in. The general understanding was that maintenance was to spend as little as possible in terms of both time and money--just patch things up as best they could. In sharp contrast to all that wasted time, there were only two unplanned shutdowns in all of 1986. What made the difference? Doing 12 hours per month of planned down time when the "machines belong to maintenance." It is a concept totally foreign to the old way of running the plant, but which is now a vital part of operations. IV. Customer Reactions The focus of all these efforts and improvements has always been the plant's customers. In fact, the extent of the progress made is easily dramatized by examining the change in customers' attitudes. In 1982, other plants in the company were absolutely refusing to accept this plant's product if alternative material was available; it was so marginal that equipment at other plants often could not run it. By 1986, these same customer facilities strongly preferred this plant's product. Not only that, the quality of the product is beginning to be recognized throughout the corporation. "It used to be that we were only called upon when other plants couldn't meet corporate quotas," says the plant superintendent. "Now, our product is used frequently as the corporate standard." The plant's customers are also pleased about the superior service they receive. One of the most valuable steps taken at the plant was to start sending workers out to the customer plants so they could watch the product being used. This helps the employees know why each step in the production is important, and has led to close relations with customers many of whom call frequently with questions. To make sure customer concerns are met, each customer is contacted by phone at least once a week to ask if they are having any problems. Employees at the plant note with amusement that when they first started the policies of calling customers and on-site visits, their customers were surprised to hear from them. "They'd say things like 'nobody else has ever called us before,' and it would take them awhile to get in touch with their production lines to find out if there were any problems," says one of the people who regularly contacts customers. The information they get from this contact helps them correct problems at the plant much more quickly, and lets them help customers get the most out of their product. V. Employee Reactions It's not only the customers who are getting better service. Life for the hourly workers at the plant is better than it used to be. The employee involvement groups generally get good ratings from the hourly workers. It was difficult to get the workers to attend the meetings at first. They just didn't trust management's motivations. Now, however, people want to form teams to address problems. Initially, there was a supervisor or manager on all the teams, but now that the people have learned the skills needed to run projects and meetings, a manager will usually only come when the team requests his or her presence. Another system in place to foster employee involvement is a formal suggestion system. Any employee who has an idea on how to improve a process or system at the plant can write it down and submit it to a review committee. Overall, this program has been successful--especially as an indication that management is willing to listen--but there are some problems nonetheless. "Sometimes the ideas we submit aren't given proper consideration," says one maintenance engineer. "The answers we get back aren't as well thought out as our ideas were. Sometimes they just don't know enough about the process to understand the reasoning behind our suggestions. If they would ask more often, we could show them why their criticism is wrong." Still, the plant has reaped many benefits by listening to workers, involving them in improvement projects, and providing them with the scientific tools they need to do a good job. One time a worker figured out how to route materials more efficiently, allowing the plant to entirely shut down half of their raw material flow. The savings in electrical bills alone has been $70,000 a year in electricity. Using only half of the flow system also improved product uniformity. Although there have been several recommendations of this magnitude, the plant management realizes that not every idea is going to have such benefits. They feel that the cumulative effect of contributions from all employees--though harder to measure than one big-dollar suggestion--is the main source of improved company performance. VI. Getting Started Through experimentation and communication the plant employees have learned a lot about how to improve quality. They caution newcomers that the early days are the hardest in the transformation, since there is a lot of skepticism. As one worker puts it, it is hard to build trust and teamwork when there isn't any to begin with. "No words would have convinced us on our own to give this a try. We've seen too many fads come and go in the past," says one worker. It takes leadership to overcome the initial reluctance that accompanies any kind of change. If you wait until everyone is convinced that the new style of management is the best way to go, you will never get started. But leading people into quality is a lot different from management by edict; it is leadership that pays attention to the concerns of customers and employees. The management-level employees at the plant can speak with authority about both kinds of management. "It used to be that I'd hear of a problem and go down to the floor and really chew someone out. Now, the problems are usually fixed by the time I get there. But I still talk with the employee and find out what went wrong. Usually they say that they just made a mistake, so I ask them what they learned from the experience, and they tell me...and that same mistake doesn't happen again," says the plant superintendent Like many managers, this superintendent used to spend all day, every day putting out fires. Now his job consists of "auditing" the processes in his plants, and working with suppliers and customers. He wanders around talking to his workers, asking them how the production lines and other process are working, and talking about suggestions on how to solve problems. He visits suppliers to show them how it's done. "It has become a lot easier to manage," he says, "because I don't have to worry about all the little things." The employees take care of the day to day details, and he has the time to work on long-term problems. The most evident change in attitude is that people are learning how to work in teams for the benefit of the company. "We're learning that 'teamwork starts with me,"' says a production engineer. A colleague adds that managers and supervisors especially have to take this lesson to heart. "Teamwork doesn't mean that you just ask other people to help you, you've got to start by helping them," she says. "When I ask an employee to trust me enough to try something new, I have to be willing to trust them when they want to try out their own ideas." VII. Future Outlook These projects, the learning of tools and teamwork skills, and the change in management's attitude are just the start. "We still have a long way to go," says a production engineer. "We can get a lot more out of our processes." Some workers, though, worry about the lack of investment in the plant. "Where's our reward for what we've done?" they ask. As one worker puts it, "We can go a long way with the mental tools and skills we are learning, but sooner or later the company will have to invest in this plant. Some day the other plants are going to wake up and start using quality improvement tools. Then they'll have both the right kind of mental tools and teamwork and much better hardware and equipment than we do. Where will that leave us?" Not surprisingly, the degree of confidence in the future expressed by various employees depends somewhat where they stand in the traditional hierarchy. It is the opinions of the hourly workers that vary most. Most of them decidedly prefer the new way the plant is run. But too many of them have been pushed around by previous fads in management to believe wholeheartedly that quality improvement is here to stay. For one thing, they attribute much of the overall improvement to the plant superintendent, and therefore feel the atmosphere could just as quickly change back if a manager unfamiliar with the Deming approach ever takes over. They realize there is very little they could do should management decide to return to the old practices. To the plant supervisors, the possibility of reversion seems less likely. They put their trust in the teamwork, statistics, and training at the plant--all aspects of their jobs over which they have some control. The plant superintendent acknowledges that his willingness to try new things played a big role in getting the plant started on the right path. The key in keeping headed that way was to trust the workers. He says that he will never go back to the old style of management. The persistence with which the plant management has lived up to commitments to trust the workers and each other has led to a healthy emphasis on learning from mistakes rather than blaming people for them. Many workers will tell you that what matters most at the plant now is not how often you fail, but how well you pick yourself up and what you learn from the experience. It takes courage. A process engineer sums up the attitude at the plant best: "Here, we know that we are all human, we all make mistakes." And therein lies the truth about what is both ordinary and extraordinary at this aging plant. It is the people; people at all levels of the company who have worked hard for more than four years to transform themselves, to unlearn old behavior, and to learn new ways to solve problems and to work with each other. As an engineer points out, "When we sit around talking about all these things, it sounds too altruistic to be believed. But there is an element of selfishness in all that we do. Everybody here wants to keep our jobs, we want this plant and the entire corporation to succeed. And we realize that what we're doing is the only way to insure our long-term success. We all have to work together or we're all going to fail." About the Author Sue Reynard is a senior editor with Joiner Associates Incorporated. She has been instrumental in the development of The Team Handbook, as well as The Fundamentals of Fourth Generation Management video training seminar.