1.What would you recommend to improve quality and productivity at NEC’s Mulgrave factory? How might the formation of teams help as part of the answer? NEC, a large Japanese-owned company, was operating a significant manufacturing facility on Springvale Road in suburban Mulgrave in Melbourne. One of its major telephone products involved electronic circuit boards, but unfortunately, at the facility, both productivity and quality were below international standards. The factory was laid out so that the many products and component circuit boards were organised into three main departments: pre-production, where the electronic components were readied for soldering onto circuit boards; production (soldering); and testing and assembly.

People in each of these three departments hardly knew those who did the next process step on their product, who might be working as near as 70 metres away. When errors were made, such as the soldering of the wrong parts onto a circuit board, feedback to those who did the soldering was slow, so the error was often repeated many times before it was corrected. Large batches of defective parts were moved to the assembly department, who tested the work and returned defective batches.

Feedback often came in the form of a rude note from one department to another accompanying the defective work and requesting reworking. Relations between staff across the departments were generally not positive, and the business imperatives to improve quality and productivity were pressing. At first, managers thought the problem was technical, and that the answer would be based around new technology and better process equipment.