Case Studies

CASE STUDY: Company-wide Continuous Improvement process
High Performance Learning was asked to help a manufacturing company with five separate manufacturing plants, employing over 3,500 people, to implement a company-wide Continuous Improvement process. Our initial assessment revealed that:

• The company needed to adapt more quickly to changing markets and customer requirements
• Employees were concerned that they were working harder and faster – but not smarter
• There were often unclear, or conflicting, customer requirements for major projects
• There were very few process, outcome, and/or performance measures
• There was little understanding of the impact of work across other departments/functional areas
• Problems were rarely solved “once and for all”
• Overall quality was not what they would like it to be
• The employees believed that high productivity goals were promoted over quality

The company’s existing problem solving process had been characterized by employees as:

• “Fire-fighting” with no follow through;
• short-term fixes that don’t address root causes;
• the same people always working on the same problems; and
• a lack of senior management commitment to solving problems once and for all.

After meeting with the Senior Management Team during a two-day Senior Management Work Conference, HPL helped the company to create and launch a new Continuous Improvement process, which initially started with three Quality Action Teams (QAT) to work on the follow critical business issues:

There was an operating budget (estimate) of roughly $10 million of scrap at the start of the year. Even though this number represented less than 3% of the company’s projected operating budget, it was having a very negative effect on the company’s overall profitability.

The main contributors to this poor performance were inadequate specification system, inadequately defined processes and methods, conflicting economic order quantities, and other specific contributors. The team’s goal was to create clear and concise product specifications, establish “Best Practices” in processes and methods, establish optimized economic order quantities, and take advantage of other specific contributors.

By using the FADE Problem Solving process, the Scrap QAT was able to achieve measurable and effective cost savings of more than $1 million that year.

Given the success of the Scrap QAT, another QAT was established by the Senior Management Team to gather consumer, customer and employee feedback to identify root causes of remakes. The team is now focusing on solving key issues that will provide good results for consumers, customers and company employees with a savings goal of $1 million or more in the following year. The FADE Problem Solving process is currently being utilized by this team as well.

A third QAT was established to look for additional ways to reduce “the cost of quality.” Currently, the team is using the FADE process to:

• Correct the most influential errors, to produce truer accounting which will in turn support better decision making and achievement of excellent results for customers, employees and company owners
• Take advantage of true “quick fixes”
• Suggest and implement incremental improvements that will ensure sustained improvement to profits in 2002 and beyond.
• The root causes the team has initially identified related to the work processes of developing programs, developing pricing and promotions, entering data into the system, developing customers, shipping product and administering returns and allowances.

One of the key goals was to save one million dollars by the end of the year. This goal was exceeded by 20% , and the Company’s profit from operations (PFO) were 45% ahead of forecast. Return of invested capital was budgeted to be less than 40% higher than the previous year and actually came in at 50% over the previous year.

In addition, two other key outcomes of the Continuous Improvement process included improvements in senior management practices. These included the production of the company’s first cross-functional, integrated strategic plan, and the rigorous reinforcement, throughout the year, of senior managers individually practicing in their own work what was being presented to other employees in Continuous Improvement Training.

More than 45 “in-house” facilitators have been trained by HPL to keep the Continuous Improvement process on-going!