Assignment
Case Study: Wainwright Industries: An Entirely New Philosophy of Business Based on Customer Satisfaction and Quality
In the early 1980s, Wainwright industries, a manufacturer of stamped and machine parts, was facing nothing less than a crisis. Increased competition. Along with intensified customer scrutiny, was forcing Wainwright to either improve quality or lose its competitive stature. In the face of this challenge, the employee of the company, led by CEO Arthur D. Wainwright, decided to make radical changes. It was clear that business as usual with a few minor improvements would not save the company. What Wainwright needed was an entire new philosophy of doing business based on quality and customer satisfaction.
To determine how to achieve this objective, Wainwright used the criteria for the Malcolm Baldrige National Quality Award as a road map. Drawing input from all levels of the company, the top management team led the process by setting goal, developing implementation strategies, and establishing key quality standards. Initially, the company emphasized three principles: employee empowerment, customer satisfaction and continuous improvement. As a creative way of demonstrating the importance of working together, the company adopted the duck as it mascot, based on the fact that ducks fly in formation as a means of supporting one another in flight. In addition, whenever a duck falls out of formation, it suddenly feels the drag and resistance of trying to fly alone and quickly returns to the flock. Wainwright used this analogy to support the concepts of teamwork and employee empowerment, which were integral parts of the company's quality improvement efforts.
Along its journey toward improve quality, a number of specific initiatives were implemented. Lean manufacturing, statistical process control, computer-aided design, cross training, profit sharing and quality minded manufacturing initiatives were put in place. Special emphasis was placed on training and benchmarking. Since it initiated its quality program, the company has spent up to 7% of its annual payroll on training. To demonstrate its resolve in this area, the company has made training an important criterion for employee advancement. Wainwright has benchmarked against a number of companies, including firms in the textiles, chemical and electronics industries. For instance, after studying Milliken & Company, a previous Baldrige award winner, Wainwright implemented an employee suggestion program that has been very effective.
Along with the changes mentioned previously, Wainwright also has changed its culture to make it more egalitarian (equality) and quality minded. The employees at Wainwright now all wear same uniform, eat in the same cafeteria, and park in the same parking lot. Office walls have literally been torn down and replaced with glass, based on the premise that if the manager can watch the frontline employees work, the frontline employees should be able to watch the manager work too. As a result of these changes, the managers of the company have become coaches and facilitators rather than supervisors and disciplinarians. This important change has helped facilitate the teamwork atmosphere that is supportive of high quality and total customer satisfaction.
The results of the company's continuous improvement efforts are linked to five strategic indicators, including safety, internal customer satisfaction, external customer satisfaction, design quality and business performance. The status of each of these criteria is tracked by "mission control," a room set aside to document the company's efforts. In mission control, each customer's satisfaction is documented with a plaque, a current monthly satisfaction rating, and a red or green flag indicating the customer's status relative to objectives.
As a result of these initiatives, Wainwright has met the challenge. It has not only survived but has emerged as an industry leader. The company has earned the status of preferred supplier to growing number of quality- conscious customers and has received special recognition from General Motor, Ford, and IBM- Rochester. The goal of Six Sigma quality is being pursued. Perhaps most importantly, in the last decade, overall customer satisfaction has increases from 84% to 95%, and the company's market share, revenues, and profits are at record levels. Ironically, the company was one of the recipients of the Malcom Baldrige National Quality Award, the very award against which the company benchmarked in its early days of quality improvement.
(Source: Managing Quality by S.Thomas Foster)
Task
A. Discuss four significant initiatives in Wainwright that applied principles of Total Quality Management (TQM) for quality improvement.
B. Wainwright emphasized two sets of initiatives: one based on improvement in its manufacturing operations and the other based on human resource management. Explain why Wainwright needed to emphasize both sets of initiatives.
C. Explain the activities applied in Quality Control and Quality Assurance at Wainwright.
D. Many types of research have shown that TQM will contribute to good product quality and competitive advantage to the organization. The case study provides three pieces of evidence in Wainwright that supports this hypothesis.