Zippy Airline Catering — a small, independent company—was recently purchased by a large hospitality company in Guam. At the time, this operation had only eight full-time employees and a single manager, and produced a single product: prepared meals for three airlines that flew out of the Guam airport. Each meal was prepared individually by a single employee. To package a meal, an employee would sit at a long table where he or she would place a portion cut of meat, potato, and a vegetable in a ceramic tray. The ceramic tray was then covered with aluminum foil and placed in an oven. When finished, the employee took the tray out of the oven and packed it into catering boxes for transfer onto an airline.
To meet the tremendously increased demand brought about by additional flights into the airport, the hospitality company that purchased Zippy Airline Catering decided to re-engineer the preparation process. A conveyor belt was installed and each employee was assigned a single task in the meal preparation. Employees now sat along either side of the conveyor and placed only a single item — meat, potato, or vegetable — on the tray. Essentially, the individual preparation method had been thoroughly converted to a production-line approach. The speed of the conveyor belt had been calculated by the engineers who designed the system. The engineers estimated that the employee would be able to fill a tray with his or her item before it passed beyond reach.
To encourage teamwork, the company instituted a group bonus plan that rewarded the employees for the total number of meals produced. According to this simple plan, the more trays produced, the more bonus earned.