Turnaround at Preston Plant
What are the most significant events in the story of how the plant survived because of its adoption of quality-based principles?
The significant events in the Preston plant story of how it survived the crisis regarding adoption of quality based principles include the following
Going back to the basics
The company decided to go back to the original set of processes after it getting rid of the curl problem. After the curl problem was solved, pressure mounted from higher management on increase of productivity because the company was operating at a loss of approximately ten million dollars for two years in a row. This pressure to increase productivity resulted to changes in several processes. Going back to the basic therefore meant that the company was on the right track to do the right thing ignoring the pressure from the top management to achieve productivity.
Shut down rules
The major factor that works against quality by the top management is the ambiguity on quality and adherence to the entire process. Preston suffered a huge loss because a product had to be scrapped off. The major reason for this was uncertainties of whether to shut that line or not. However, with the encouragement to the shut-down rules the plant made it absolutely clear that their main focus was quality increment and cost reduction at the expense of productivity.
Daily and monthly reviews
The company started a daily review process as an activity to monitor and discuss problems faced in the top management and other areas of improvement. These daily meetings made sure that the operators discussed the real issues that faced the company and also come up with solutions to these problems. Consequently, it helped in boosting the morale of the employees by bringing the feeling of doing something right.
The management also decided to include operators from all shifts into those review meetings. This made sure that various problems encountered during different shifts were discussed and how they coped up with them. Knowledge is sharing and in these daily and monthly meeting the HP people were also invited to ensure that they also got hold of the first-hand information and experience on how much the plant was committed to bringing the right processes back in play.
Convincing the rest of the world
Everything now was starting to fall in the right place. For example, HP did not give viper the contract and also Rendall decided to shut down the company as a result of the huge losses. However, the management did not agree to this decision and they decided to do the following to convince HP as well as Rendall: reduce costs, improve quality, and create a platform for new ideas.
The plant` s processes eventually were brought under control. What were the main benefits? And describe the process design
The company was brought under control by focusing on the following three areas.
- Quality improvement
- Statistical process control
- Creating a platform for new ideas
This was implemented by application of a full statistical process in the monitoring system. To further improve the quality, quality conscious and problem solving tools were implemented throughout the company.
Statistical process control
A full statistical process was developed throughout the company to make sure that it was under continuous monitoring and control. Furthermore, it enabled a continuous sharing of data for transparency as well as operational excellence in the company. A statistical process made sure that there was no compromise in quality by reducing garbage and reworks as much as possible.
Creating a platform for new ideas
This enabled the company to investigate several new ideas and products in a row. It offered a competitive edge to the plant and made sure that the plant manufactured products that somehow seemed technically hard. For example, they produced “Eco wrap”; a recyclable protective wrap.
SPC is an operational-level technique of ensuring quality conformance. How many of the benefits would be classified as strategic?
A major challenge in quality maintenance is identifying when there is a drift away from what is acceptable. As Preston was experiencing losses for two years in a row, it is quite evident that the entire company was doing badly in all sectors including, quality and cost.
Implantation of SPC brought to the table the aspect of total quality management in the company. This is the main requirement in achieving the quality benchmark for any company in today’s competitive world. Operations can be set direct from the processes. The decision by the management to implement a statistical process model was aimed at bringing the strategic and the operations benefits of the company together. The strategic benefits of SPC to the plant are as follows:
- Provides a competitive advantage
- Monitoring and control
- Continuous improvement
- Technical capability to execute large and complex projects
In summary, SPC helps a company achieve operational benefits plus strategic benefits. However, the management has to put their focus on the kind of strategic benefits they want to get from the operational objectives of the company by coming up with the right process and practices.
How to operation can manage risk and mitigate failure
Cost reduction operation measure in any organization is a painful process. In the case of Preston most of the staffs were aware that the plant was being shut down in few months. There was already an atmosphere of anxiety and doubt within the organization on its future.
Things that can damage the organization on a large scale are uncertainty and ambiguity. If the employees are not aligned with the daily operations of the organization then it can greatly affect the productivity and the overall quality of the product.
The top management should ensure that transparency is maintained throughout the organization at all times so that employees are aware and they understand the business decision being made. For example, the decision to layoff at Preston was reached at because the management through operations based assessment came to the conclusion that cutting numbers had a greater impact on the overall cost than saving the payroll.