Texas Nameplate Company: All You Need Is Trust


Stratton, Brad   (1998, ASQ)   American Academy of Allergy, Asthma and Immunology, Milwaukee, WI

Quality Progress    Vol. 31    No. 10
QICID: 13283    October 1998    pp. 29-32
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Article Abstract

Improvements in nonconformance rates and cycle times at Texas Nameplate Company (TNC) rely on good measurements and an easy to understand gain-sharing plan. In 1992, TNC's total nonconformances as a percentage of billing was between 15% and 18%, the industry average being about 10%. By January 1998, TNC had reduced the rate to 0.5%. Its improvement plan has had two key elements. First, a gain-sharing plan has provided equal bonuses to all employees once the nonconformance rate was below 5%. Second, a daily operation innovation team (DOIT) replaced the quality control department. DOIT supervisors identify opportunities for improvement, which are implemented by people on the factory floor. These initiatives have resulted in $200,000 in bonuses and an increase in sales from $3 million in 1993 to $5 million in 1997. A defect-free mind-set at TNC supports its philosophy of guaranteeing defect-free shipments. Only four times in the past five years has TNC exercised this free-order guarantee. To develop similar improvements in cycle times, TNC plans to lower its 10-day cycle time goal, even though this already is below the cycle time of its competitors. A first step has been to measure cycle times more carefully, using hours rather than days. Gain sharing also might become an element of the improvement effort. This article includes sidebars on: benchmarking of TNC by a Korean corporation; TNC's winning of the Texas Quality Award; and TNC's seven key business drivers.


Defects,Gainsharing,Cycle time,Quality improvement (QI),Case study,Nonconformities

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