ASQ - Team and Workplace Excellence Forum

Online Edition - January 2000

Issue Highlight - Y2K, Oh
-- "At 12:01 a.m. on January 1, 2000 we both breathed a sigh of relief and simultaneously attended a coronation...The coronation may have been more significant than the relief."

In This Issue...
Elementary TQM
Workplace Humor
Games at Work
Merger Mania
Boosting Capacity

Peter Block Column
Views for a Change
The Quality Tool
---- I Never Use

Diary of a Shutdown


It Takes More Than Chemistry To Double Capacity
When Everything's Coming Out Just Right, Expect to Up Your Productivityho Wants To Be A Millionaire

---When Ron Recardo, managing partner at the Catalyst Consulting Group, Southington, Conn., walked through the doors of CK Witco, a specialty chemicals company, he liked what he saw. Under the direction of H. Keith Montgomery, production manager for CK Witco, employees at the Houston plant were committed to the success of the business; they took pride in doing good work and were willing to learn new things. The management team at CK Witco was also in good shape; an especially positive management/labor relationship impressed Recardo. Houston's leadership was strong and management seemed dedicated to raising expectations of performance.

---But while CK Witco's Houston employees buzzed along doing what they do best, the company's owners nervously bit their nails-they were about to throw a monkey wrench into the plants polished machinery by doubling Houston's overall capacity. A lot was riding on Houston's excellent workforce. Recardo was asked to assess if the Houston plant could handle the increased load, and Montgomery was asked to assist Recardo to determine what could be done to make it happen.

--- The duo set out to their task: Assess the plants strengths and weaknesses, propose a blueprint enabling Houston to double capacity without increasing the size of its workforce and develop a scorecard of measures to focus and evaluate efforts.

Strengths and Weaknesses
The many positives at the Houston plant aside, Recardo noticed a few problems right off the bat. While everyone had the best interest of the company at heart and held each other in high esteem, the downside of such confidence was a tendency toward isolationism. There was a notable lack of involvement in trade organizations, insufficient integration with the business team and weak communication across the company overall, especially regarding the strategic direction of the plant.

--- To amend these problems and begin work on the blueprint, Recardo and Montgomery set up a workshop for senior management. But in preparing the two-day workshop, Montgomery and Recardo began to worry that the fast pace required to deal with the double workload would come as a shock and have a paralyzing effect. To assure everyone was well prepared, Recardo assigned homework prior to the workshops whirlwind schedule. For the homework, "We looked at how other similar companies approached strategic planning, analyzed industry trends and market competitors," says Recardo. This preparation phase turned out to be essential. "It prepared participants for the rigors of the data-based strategic planning that we would ultimately follow to use the scorecard effectively." It also threw open the doors of CK Witco's hard-working but self-absorbed workforce, and forced them to realize some major changes were coming down the pike.

Creating a Blueprint
The result of the two-day workshop was Houston's business blueprint. The blueprint included five key areas:

  • Build strong supplier and customer relationships
  • Optimize the skills and knowledge of the organization
  • Better understand our markets
  • Achieve error-free delivery
  • Decrease operating costs

---After the workshop, participants formalized a design plan that clearly identified what could and could not be changed in the redesign effort. In addition, they came up with three guiding principles that would help the redesign stay focused: technology, organization and process.

--- Recardo recommended that a four-team reorganization replace the traditional top-down management that previously guided the Houston plant. The four-team structure, it was hoped, would accelerate the redesign laid out in the blueprint.

---As part of the blueprint, four decision-making process teams, Sulfonation, Oxylation, Kettles and Stearates (this is a chemical plant, remember?) each have four sub-teams organized by shift. The focus of each team is to redesign the way work is completed and integrate support functions into the team. To accomplish this the Technology, Organization and Process (TOPs) model for implementing change was incorporated. Technology is comprised of the information technology and equipment, data storage and access and IT applications. Organization is structure, culture, human resources and administration. Process is the physical layout of the work environment, and the work process itself.

Keeping Score
Progress of the work redesign effort is measured at two levels: plant-wide performance and on a project-by-project basis. A scorecard is used on a monthly basis to keep track of baselines and targets for the plant. Here are some of the results:

  • Customer Service: Line fill rate and on time shipments improved from 50 to 94 percent.
  • Safety: Reportable incidents rate dropped from 4.5 to .5.
  • Quality: Customer complaints decreased from 192 to 48 per year.
  • Productivity: Performance to schedule improved from 50 to 85 percent. Inventory: Record accuracy improved from 62 to 92 percent.
  • Cost: Unplanned overtime decreased from 20 to 10 percent.
  • People: Turnover fell from 15 percent annually to 3 percent annually.

---After all the nail biting and high expectations, Recardo happily points to these statistics as proof: Yes, the Houston plant can do it. In fact, since the teams have managed their operating costs, they've identified and developed proposals to enhance performance beyond the initial redesign. One team implemented a material recovery system that reduced disposal costs for spent materials for projected savings of $100,000 per year. Another relocated materials closer to the plant and saved 35 man-hours per year on average in transportation and other associated costs. Plus, it made the job easier and safer for the environment.

--- Essential to the redesign success at CK Witco is acknowledging what made the Houston plant ideal in the first place: people. "Key to our success is a safe environment where communications are open, honest and frequent," says Recardo. "Respect and mutual trust among employees is expected and every person needs to learn and continuously improve."

--- Workers at CK Witco have taken on more responsibility for everything from coming up with new ideas to attendance control and time keeping. They are responsible for evaluating each others' skill level and helping each other learn, grow and improve. Proving,once again, that the chemistry of people, process and planning can create miracles in the workplace.

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