The crisis
Tom immediately set about the task of bringing the plant back under control. They first of all decided to go back to the conditions which prevailed in the January, when the curl team’s recommendations had been implemented. This was the state before productivity pressures had caused the process to be adjusted. At the same time the team worked on ways of implementing unambiguous ‘shut-down rules’that would allow operators to decide under what conditions a line should be halted if they were in doubt about the quality of the product they were making.
‘At one point in May of 2000 we had to throw away64 jumbo rolls of out-of-specification product. That’s over $100,000 of product scrapped in one run. Basically that was because they had been afraid to shut the line down. Either that or they had tried to tweak the line while it was running to get rid of the defect. The shut-down guidelines in effect say, “We are not going to operate when we are not in a state of control”.Until then our operators just couldn’t win. If they failed to keep the machines running we would say, “You’ve got to keep productivity up”. If they kept the machines running but had quality problems as a result, we criticized them for making garbage. Now you get into far more trouble for violating process procedures than you do for not meeting productivity targets.’
(Engineer, Preston Plant)This new approach needed to be matched by changes in the way the communications were managed in the plant.
‘We did two things that we had never done before. First, each production team started holding daily reviews of control chart data. Second, one day a month we took people away from production and debated the control chart data. Several people got nervous because we were not producing anything. But it was necessary. For the first time you got operators from the three shifts meeting together and talking about the control chart data and other quality issues. Just as significantly we invited HP up to attend these meetings. Remember these weren’t staged meetings, it was the first time these guys had met together and there was plenty of heated discussion, all of which the Hewlett-Packard representatives witnessed.’
(Engineer, Preston Plant) At last something positive was happening in the plant and morale on the shop floor was buoyant. By September2000 the results of the plant’s teams efforts were starting to show results. Process were coming under control, quality levels were improving and, most importantly, personnel both on the shop floor and in the management team were beginning to get into the ‘quality mode’ of thinking. Paradoxically, in spite of stopping the line periodically, the efficiency of the plant was also improving. Yet the Preston team did not have time to enjoy their emerging success. In September of 2000 the plant learned that it would not get the Vector project because of their recent quality problems. Then Rendall decided to close the plant.
‘We were losing millions, we had lost the Vector project, and it was really no surprise. I told the senior management team and said that we would announce it probably in April of 2001. The real irony was that we knew that we had actually already turned the corner.’(TomBranton)
Notwithstanding the closure decision, the management team in Preston set about the task of convincing Rendall that the plant could be viable. They figured it would take three things. First, it was vital that they continue to improve quality. Progressing with their quality initiative involved establishing full statistical process control (SPC).
Second, costs had to be brought down. Working on cost reduction was inevitably going to be painful. The first task was to get an understanding of what should be an appropriate level of operating costs.
‘We went through a zero-based assessment to decide what an ideal plant would look like, and the minimum number of people needed to
run it’ (Tom Branton).
By December of 2000 there were 40 per cent fewer people in the plant than two months earlier. All departments were affected. The quality department shrank more than most, moving from 22 people down to 6.
‘When the plant was considering down-sizing they asked me, “How can we run a lab with six technicians?” I said, “Easy. We just make good paper in the first place, and then we don’t have to inspect all the garbage. That alone would save an immense amount of time.”
(Quality Manager, Preston Plant)Third, the plant had to create a portfolio of new product ideas which could establish a greater confidence in future sales. Several new ideas were under active investigation. The most important of these was ‘Protowrap’, a wrap for newsprint that could be repulped. It was a product that was technically difficult. However, the plant’s newly acquired capabilities allowed the product to be made economically