Seminar 4 Quality mgnt Turnround at the Preston plant 'Before the crisis, the quality department was just for looks, we certainly weren't used much for problem solving, the most we did was inspection. Data from the quality department was brought to the production meeting and they would all look at it, but no one was looking behind it." (Quality Manager, Preston Planti) The Preston plant of Rendall Graphics was located in Preston, Vancouver, across the continent from the headquarters in Massachusetts. The plant had been bought from the Georgetown Corporation by Rendall in March 2000. Precisioncoated papers for ink-jet printers accounted for the majority of the plant's output, especially paper for specialist uses. The plant used coating machines that allowed precise coatings to be applied. After coating, the conversion department cut the coated rolls to In October 1999, Tom Branton, previously accountant for the final size and packed the sheets in small cartons. the business, was appointed as Managing Director. The curl problem Slipping out of control In late 1998 Hewlett-Packard (HP), the plant's main cus- In the spring of 2000, productivity, scrap and re-work tomer for ink-jet paper, informed the plant of some levels continued to be poor. In response to this the operaproblems it had encountered with paper curling under tions management team increased the speed of the line conditions of low humidity. There had been no customer and made a number of changes to operating practice in complaints to HP, but its own personinel had noticed the order to raise productivity. "Looking back, changes were problem and wanted it fixed. Over the next seven or eight made without any proper discipline and there was no real months a team at the plant tried to solve the problem. concept of control. We were always meeting specification, Finally, in October 1999, the team made recommenda- yet we didn't fully understand how close we really were to tions for a revised and considerably improved coating not being able to make it. The culture here said, 'If it's formulation. By January 2000 the process was producing within specification then it's OK' and we were very diligent acceptably. However, 1999 had not been a good year for in making sure that the product which was shipped was in the plant. Although sales were reasonably buoyant, the specification. However, Hewlett-Packard gets 'process plant was making a loss of around \$2 million for the year. charts' that enables them to see more or less exactly what is happening right inside your operation. We were also orer $100,000 of product scrapped in one run. Basicaly gerting all the reports but none of them was being inter- that was because they had been afraid to shut the line nalzed, we were using them just to satisly the customez down. Either that or they hud triod to twoak the lne while it By contrast, HP have a stafisticaly based analytical men- was nuning to get rid of the defoct. The stut-down guibetality that says to itsel., You might be capable of making fines in effect sar. We are not going to cperate whin we this product but we are thinking two or three product gen- are not in a state of control. Until then our cperators juat erations forward and asking ourseives, wil you have the couldn' win. if they failed fo keop the machines rumning capability then, and do we want to invest in this reladion. We would sey, You've got to heep productivity ap", in they ship for the future?: (Torm Araniton kept the machines running but had qualify problems as a The spring of 2000 also saw two signicicant events. result, we criticired them for making garbage. Now you First, Hewlett-Packard asked the plant to bid for the con- got into fir more trouble for violating process procecures. tract to supply a now ink-jot platform, known as the Voctor than yoo do for not meeting productivity targets." project. a contract that would secure heaithy orders tor (Engineer, Preston Plant] sevecal years. Second the plant was acquired by Rendall. This new approach needod to be matchad by changes 'What did Alendal see when they bought as? They saw a is the way the communications ware managed in the small plant on the Pacific coast losing lots of money.' plant. We did heo thinge that ae had nover dane bofore. Finance Manage, Preston Plant First, each production feam started holding daly revitews Rendall was not impressed by what it found at the of control chart data. Second, ane day a month we took: Preston plant. It was thaking a loss and had only just people away from production and debated the control oscaped incurring a malor customer's disapproval over chart data. Semeral poople got nervous because we were the curl issue. If the plant did not get the Vetor contract, not producing anything. But a was necessary. For the fist its future looked bleak. Moanshile, the chiat concern con- time you got operators from the three shifts meeting linued to be productivity. But also, once again, there were fogether and taking about the control chart data and other cocasicnal complaints abcut quality levels. However, HPS quality issues. Just as significantly we invited HP up to attitude caused some bewilderment to the operations attend these meetings. Aemembec these werent staged management team. 'When HP asked guestions about our meotings, it was the frst time these gugs had met fogether process, the operations guys would say, Look, we're and there was plenty at heated discussion, all of which the making roil after roll of paper, it's within specilication. Hewetf-Packard representatives witnessed." (Engineec: What's the problem? (Cuality Maragos. Preston Plant) Preston Plant But it was not unti sumener that the full extent of HPs . At last something positive was happering in the plart disquiet was made. ' I ail never forpet Jane of 2000 . f was and morale on the shop fioor was beioyant. By September at a meoting with HP in Chicago. It was not even about 2000 the results of the plant teans' offorts were starting to quality. But during the meeting one of their engineers show reeills. Process wore ooming under contral, quaity handed me a controf chart, one that we supplied with levels were improving and, most importantly, personnel eveny batch of product. He sald, Here 5 your hatest control both on the shop floce and in the management feam were chart. Wo think youre out of control and you don't know beginning to got inte the 'qualify mode' of thinking. that youre out of control and we think that we are fooking Paradcicaly, in spite of stopping the line periodicaly, the at this data more than you are. "He was absolutely right etticiency of the plant was also improving. and I fuly understood how serious the posibion was. We Yet the Preston toam did not have time to enioy thei had our most imporfant customar teling us we couldh' emarging success. In September of 2000 the plant un cur processes fust at the time we were trying to per-. learned that it would not get the Vector project because of suade them to give us the Vector contract.' (Tom Brantory the recent quaity problems. Then Rendall decided to close the plant. We were losing milians, we had loat the The crisis Vector project, and it was reacly no surprise. I told the Tom immediately set about the task of bringing the plant senior management team and said that we would back under control. They first of all decided to go back to announce it probably in Apn of a001. The real irony was the conditions which prevaled in the January, when the that we knew that we had actualy already furned the curl team's recommendations had beeci impiemented. comer:' (fom Branton) This was the state bofore productivity prossures had Notwithstanding the closurs docision, the manngement caused the process to be adfusted. At the same time the team in Preston set about the task of convincing Rendal team worked on ways of implementing unambiguous that the plant could be viable. They figurvd it would take 'shut-down rules' that would allow operators to decide three things. First, it was vital that they continee to under what conditicns a line should be hated if they wore improve quality. Progressing with their qualify initiative in doubt about the quality of the product they were imvolved establishing full statistical prosess control. making. "At ane point in May of 2000 wo had to throw Second, oosts had to be brought down. Working on cost avay 64 , umbo rolls of out-of-specification product. That's reduction was inevetably going to be paintul. The frat task Questions 1 What are the most significant events in the story of how the plant survived because of its adoption of qualitybased principles? 2 The plant's processes eventually were brought under control. What were the main benefits of this? 3 SPC is an operational-level technique of ensuring quality conformance. How many of the benefits of bringing the plant under control would you class as strategic