Listed below are just some of the international organisations that DHI have worked with over the past 40 years. Engagements have ranged from Strategy Deployment, Leadership Development, Business Process Re-engineering, Lean Six Sigma training, Risk Management and Team Effectiveness.
The following case studies are selected from amongst some of the larger programmes that we have delivered but there are many more on this scale and also literally hundreds where we have assisted both medium sized companies and SMEs. Size of the organisation is irrelevant as the principles behind our work are both generic and applicable even down to one man band organisations. It is just simpler in the smaller company.
Hoshin Kanri Heavy Engineering case study
Industry : Heavy Engineering
Location: Barrow In Furness UK
Nature of work: Shipbuilding and military vehicle production
Problem: Loss of market share, losing in competitive bidding being undercut on both price and delivery by lower skill based rivals. At the start of the Hoshin Kanri based contract carried out by David Hutchins, Employees were being laid off at the rate of 500 every six months as a consequence of the loss of a critical bid in competitive tendering.
Solution: Company wide Hoshin Kanri programme integrated with TQM.
Benefits: From being in a very weak position in the market place, the company transformed in less than 2 years to becoming the winner of a very high profile contract to build a Helicopter Landing Platform (similar to an Aircraft Carrier) contract providing more than 10 years work against severe competition from a consortium involving some of the UKs largest organisations.
Through the application of the Hoshin Kanri and Total Quality Management (TQM) continuous improvement methods taught by us, they also managed to save a major Government military vehicle production contract from potential severe losses and penalties for late delivery by returning to a nett profit situation and delivery to time and cost. There were also very significant cost savings on many other projects.
Significant reductions in the time and cost to delivery on a wide range of work. The contract was set to continue but the Company was acquired by an internationally operating engineering company keen to add VSEL to its range of assets.
Hoshin Kanri Short Bros Belfast Success story
Short Bros manufacture aircraft and military products in the Belfast area of Northern Ireland, and at the start of the project employed around 8,800 people.
The project began in 1987. At that time, Shorts were owned by the British Government and their financial losses were the equivalent to 30% Sales Revenue! Margaret Thatcher, the then Prime Minister told them ‘Either you improve the companies performance and find a buyer or we will close you down’. Soon after that Roy McNaulty (now Sir Roy McNaulty) the Chief Executive invited David Hutchins to meet him at their London Offices.
As a consequence, we were commissioned to assist them to meet the challenge of performance Improvement to unprecedented levels.
In the first 12 months of our involvement, the economic improvements just outweighed the costs but it meant that the programme was self funding from the beginning and a significant part of the training had been carried out. This included ‘train the trainers’ as we planned to make Shorts independent of the need for continued external support as soon as reasonably possible. (this has always been a priority with DHI).
In the second year, the net benefits were a few £100 000 and the bulk of the training using our services had been completed
In the third year, the company achieved a net saving of more than £15M and by the following year an accrued saving of £45M. At this point, the company went into net profit for the first time in 15 years and one year ahead of their target.
Subsequently, they achieved their other goal which was to be privatised and were sold to Bombardier.
The essence of management thinking at Short Bros is best described by the managing director, Roy McNulty, in the first copy of Shorts’ in-house publicationChanging Times(March 1991).
At around the time that Shorts began to introduce Total Quality, the company was struggling with the problems of privatization and were looking for a buyer. There can be no doubt that this would tend to focus the mind, and it is interesting that in both this and in the Japanese examples initial moves to introduce Total Quality were sparked by a competitive challenge of some kind.
Eighteen months later we boldly stated that, under the ownership of Bombardier, we were together ‘en route to a new future’. Much has happened since then which is already shaping this future. The Company has been reorganised and recently this has been fine-tuned. We have launched several new projects with enormous potential and expanded others to unprecedented levels of production. Visitors to the Company are amazed at the physical changes – the progressive modernisation of our facilities is certainly in harmony with a Company that is moving forward.
One initiative that started a couple of years before privatisation was Total Quality. As the initial debate progressed, it became clear that while Total Quality introduces some new tools and techniques, _ it is fundamentally a concept that is about realising the potential of our people.
Last November, at the Company Prize giving, Raymond Royer, President and Chief Operating Officer of Bombardier, stated that the only thing that differentiates Shorts as a Company from our global competitors is our people. The quality, and therefore the effectiveness, of any Company is a direct reflection of the quality and effectiveness of its people. Total Quality can be viewed as a way of releasing the untapped potential of our total workforce, a tool which will give us the competitive advantage to make us world leaders.
We demonstrated our belief in the importance of Total Quality for achieving profitability (and therefore a secure future for us all) by making it an Executive Agenda item for 1990/91. That is to say the Management Committee singled out Total Quality as one of the three areas that demanded top priority as we strive to improve our business performance. It should be clearly understood by _ everyone _ that Total Quality is fundamental to the turnaround of Shorts.
We _ must not _ make the mistake of some British industries (e.g. the motorcycle industry) of believing that our current performance and levels of improvement are good enough. We face new demands and expectations in today’s competitive market place. If we are to keep ahead of emerging competition from countries like Korea, Brazil, Japan, etc., we must strive to _ continuously improve everythingwe do.
We should be in no doubt if we do not continuously improve and achieve ever higher levels of performancesomeone else will. If we cannot meet our customers’ ever rising expectations _ someone else will. _ If we cannot bid for work at a competitive price _ someone else will.
When he visited Shorts, Dr Deming, the well-known quality ‘guru’, was quizzed on whether he saw Total Quality as an important option and he responded. ‘You do not have to do this, _ survival is not compulsory!’
Since the Total Quality Programme was launched, over 8000 employees have attended at least one half-day awareness session. The overriding message from those who developed this training was that _ the vast majority of people in Shorts are keen to contribute to the turnaround. _ This puts a considerable responsibility on Management to allow and encourage people to use their skills and experience to improve every aspect of our business.
Many employees have already demonstrated what can be done as they have tackled problems through the Total Quality programme and achieved levels of performance previously not thought possible.
This newsletter is an example of continuous improvement of the Total Quality Programme. At a series of Management Seminars in August 1990, the general message emerging was that of a lack of communication of Total Quality in Shorts. It is our intention to use the pages of this newsletter to keep you updated on Shorts and our journey towards becoming the industry leader in each sector of our business through Quality, productivity, innovation and satisfied customers.
‘Quality is never an accident,’ John Ruskin said, ‘it is always the result of intelligent effort.’ We must make planning for Quality an integral part of the way we do business.
ROY McNULTY Managing _ Director _ (from ‘Firmly en route through Total Quality’, Changing _ Times 1, _ March 1991)
The Total Quality programme was launched in 1987 and, is probably still one of, if not _ the _ best in the United Kingdom. The reason for their success is their obvious commitment and resolve to succeed. Total Quality at Shorts was initiated by the board of directors, who had decided to practise what they were about to preach, by forming themselves into a Quality Council to steer the overall programme. Quality Circles were then formed in the Aircraft Division and in the Military Products Division, each led by one member of the higher level council (Figure 4.2). The object of this was to ‘back link’ each of the two lower-level councils to the Board Council, the latter thereby providing an umbrella and vehicle for cross-fertilization in the programme as it cascaded down through the organization.
At each major function, such as R & D, Operations, etc., further Quality Councils were formed. The object of this was to ensure a sense of local ownership, while at the same time ensuring that the problem selection process was as parochial as possible. These councils also ‘back linked’ upwards.
Training at Shorts is provided through a ‘Total Quality Centre’ which, it is claimed, has embarked on the largest schedule of training ever known at Shorts, educating all company employees in the basics of Total Quality. New employees are also made aware of Total Quality at induction with follow-up sessions after six months.
The company-wide Total Quality programme has the objective of reducing the cost of poor quality on a project by project basis by £45 million. In 1990/1 some 220 projects saved £6 million and in 1991/2 they were on track towards saving over £7.5 million through 300+ projects. Over 350 project team leaders have been trained in all the techniques of quality improvement. The initial efforts of Shorts also won the coveted National Training Awards in 1989.
The staffing of the Total Quality Centre in Shorts was novel. Managers were taken off the line to work in the centre on a full-time basis for approximately 18 months. Then they returned to line duties. Having run the centre and conducted the training for that period, it is believed that managers became totally committed to the concept. Ultimately, all managers had this experience.
The role of the centre was to:
Coordinate all Total Quality activities throughout the company and interact at all levels with the Total Quality structure. Support the Quality Council in developing the Total Quality strategy.
Support the Divisional Councils and Functional Quality Teams. Ensure that the project by project approach is effective (including maintenance of computerized records of all Total Quality projects). Develop Total Quality with the company’s supplier base.
Expand the use of Statistical Process Control in the company. Develop Total Quality in conjunction with the Ulster Business School.
Organize Team Leader Training Courses in response to demand. Publicize achievements in Total Quality.
Role of the company Quality Council
- To determine how Total Quality could best be used to enhance business performance.
- To provide visible leadership in the drive to make Total Quality a way of life.
- To review Total Quality company-wide and ensure activities are effective.
- To agree overall policy and education for Total Quality.
Role of the divisional Quality Council
- To lead and control Total Quality activities within each division.
- To define and publicize Total Quality policies and objectives.
- To determine priorities for Total Quality projects.
- To allocate human and financial resources to nominated projects.
- To set the measurement criteria for project evaluation.
- To provide overall support and encouragement for Total Quality activities.
Role of the functional Quality teams
- To lead and control Total Quality activities within each area. To provide support and guidance for Total Quality activities. To publicize Total Quality activities in their own areas.
- To ensure the project team leader is fully briefed and trained. To monitor project progress.
- To ensure that project commencement and completion forms are filled in and returned to the Total Quality Centre.
- To implement fully the remedies and ensure that the gains are held.
TQM Packaging Industry Case Study
Industry: Packaging – cans and plastics
Client: Crown Cork
Location: UK and France
Nature of work: Change and Project Management; Total Quality Management, TQM; Quality related Cost Reduction: Continuous improvement and Process Improvement. Quality Circles Implementation
Problem: Severe International competition in all markets
Solution: Company wide implementation of Total Quality in order to drive down cost and improve overall performance. DHI worked with all Divisions of the part of the company between 1988 and 1992 that was named Carneau Metal Box and Carneau Metal Box Technology before its later tie up with Crown Cork.
Benefits: Significant cost reductions, increased share of markets, better internal harmony resulting from cross functional projects. Huge savings and performance improvement by management led project teams and Quality Circles.
Two initial projects carried out by the Directors saved many millions of pounds by reducing time lost through late start of meetings across the business and making meetings more effective.
Quality Circles at Wedgwood
DICK FLETCHER - Chief Facilitator, Wedgwood
(Archive material from the now out of print book ‘The Japanese Approach to Product Quality’ Edited by Naoto Sasaki and David Hutchins. Published by Pergamon Press. Second hand copies can still be obtained form Amazon Books.)
David Hutchins introduced the concept of Quality Circles to senior management, middle management and Unions at Wedgwood during December 1980. Training of the first 12 leaders started in January 1981, and the first of six Quality Circles started training at the end of that month, followed by six more a month later. David Hutchins then returned to train 12 more leaders in March 1981, and the process has continued at a steady pace since the outset.
Training then spread to all the local firms within the Wedgwood Group. These are all situated within a 5-mile radius in North Staffordshire. Within a year of starting 80 Quality Circles were operating.
In order to organize this operation Wedgwood has so far six fulltime facilitators, all of whom were previously from production or training departments within the group. The next aim is to involve at least half the workforce in Quality Circle activities, which will mean running some 400 Circles.
Circles meet for 1 hour each week during working hours in specially prepared Quality Circle rooms. The main Wedgwood factory is soon to have a new complete Quality Circle Centre with a lecture room, six Quality Circle meeting rooms, office accommodation and a storeroom for records.
Quality Circles usually choose their own problems and spend anything from a month to six months analysing and solving each particular project. When the solution is found, a presentation is made to senior management or board members.
The whole process of problem solving follows strict procedures and stages. Firstly problems are identified, and then one is selected by the Quality Circle voting for it. After this the cause is thoroughly investigated, and the facts are verified by data gathering and double checking. On occasions the actual cause which had been assumed was not the same as that which showed up after the data gathering.
Armed with facts and a solution, a presentation is made to get approval for implementation of the project. Once this has been granted, the whole process of establishing controls and general monitoring begins so that the solution can be standardized.
The whole procedure from the initial cause and effect chart on to the final result is recorded on a composite sheet which takes the reader through all the charts, drawings and graphs to the final results which are constantly checked and audited. So far all projects have been implemented, but it is important that a regular check is made to see that the improvement is maintained.
The types of projects embarked upon and subsequently put into being are:
Improved identification marks on the back of tableware. Redesign of lining brushes.
Planned maintenance scheme for aerograph guns. Complete revision and standardization of fettling tools. Design of automatic gift box opening machine.
Truck redesign. Workshop layout scheme. New storage pen identification scheme.
Improvement to plaster mould resulting in decrease in loss and increase in usability.
Identification and removal of particular dust hazard. Improved work flow.
Elimination of clay wastage. Improved handle application. Complete redesign of casters bench. Co-operative improvement at interface of adjoining processes. Improved security.
Facilitators are responsible with the Quality Circle leader for the training of each Quality Circle up to its first presentation, after which he will decide if his regular attendance is necessary or not. From then on he will be on hand, if required, to help that Circle and its leader and to help in the organization of its next project and subsequent presentation. After the project has been approved, it is the facilitator’s task to see that nothing stands in the way of its immediate implementation, and to this end it must receive maximum priority.
Quality Circle leaders are usually of mid-management or foreman level. However, many hourly paid operatives have made excellent leaders. Some have been Quality Circle members who have, with the approval and support of the original Circle leader, become leaders with that Quality Circle. In some cases the original leader has gone on to form a new Quality Circle in his department.
Some Quality Circles have taken on new members who have been trained in a short “catch-up” course. If subsequently the Quality Circle has grown too big (more than 10), then it has split up into two smaller Quality Circles.
Each factory has its own individual steering committee and no standard has been set as to its constitution or frequency of meeting. Some steering committees are made up solely of senior management, others of a more general cross section. Some meet as often as each month, some every other month. At each of these meetings the facilitator makes a detailed presentation of up-to- date progress and then discusses with the committee current problems and future plans.
Quality Circles are designed to be very much “people building”. Members who are often shy and reticent at the outset soon become enthusiastic contributors. For the first time, possibly, they begin to feel genuinely part of the factory operation.
Once this situation has been fostered, the members begin to feel an affinity to other Quality Circles and as the direct result of this condition inter- departmental co-operation begins. Department A presents its part of the process in a form which is much more helpful to department B. Problems common to each of the departments are solved by members of one Circle sitting in with the other Quality Circle. Recently a Quality Circle invited other adjoining Quality Circle leaders to its presentation.
Quality Circle members should be encouraged to visit other Quality Circle areas to begin to understand other processes and what part their particular operation plays in the whole operation.
Quality Circles should never consider themselves the elite of their department but should simply gain the co-operation and respect of it. The process and result of their current project should be made known to all in their department, and where possible everyone should help in the compilation of check sheets when appropriate.
Quality Circles are encouraged to bring in experts to help them in their projects. Chemists, engineers, electricians, designers and suppliers. Circle members have been to suppliers’ factories to promote a better understanding between those who make items and those who use them.
A short report is kept of every Quality Circle meeting since day one and this is circulated to management and Quality Circle leaders weekly. The composite sheet of each project leading up to its presentation and implementation is more widely circulated.
One of the most significant contributions and in fact the mainstay of the success of Quality Circles at Wedgwood has been the total involvement from the Chairman downwards. At a time when the industry generally was at a low ebb, the whole concept was inaugurated as fully and unstintingly as possible. It was not a case of giving it a trial or running a pilot scheme. It was a simple case of general acceptance; all weight and enthusiasm behind it getting it off the ground fast.
It is difficult to assess in real terms the return on money spent on Quality Circles in the first year as the training costs to get it off the ground are proportionally at their highest. However in looking through savings as a result of all the projects to date, a figure of a three to one return on costs is easy to show. However, on top of this must come an extraordinary improvement in industrial relations and a general improvement in quality which is so obviously apparent.
Wedgwood make frequent visits to Japan to keep abreast firsthand with all Quality Circle developments, and it is proposed to step up the frequency of these visits.
Those who dismiss out of hand the idea that all Japanese principles would work in the West are burying their heads in the sand. There is a lot we can learn and there is a lot which is not relevant; but in the case of Quality there is a considerable amount of scope for improvement, and the concept of total involvement is an excellent one.
Reprinted from the book ‘The Japanese Approach to Product Quality’ Edited by Naoto Sasaki and David Hutchins. Published by Pergamon Press. It is now out of print but copies are still changing hands on the Amazon website.
*Footnote. Dick Fletcher went on to become the President of the National Society of Quality Circles (NSQC) until his retirement when he then went to travel in France. He died about one year later. His role as Facilitator at Wedgwood was filled by Pat Mason and later by Graham Finney who was also a leading member of the Society of Quality Circles which later became the National Society for Quality Teamwork (NSQT). Unfortunately the change of name might not have been a good idea as the Society failed in the late 1990s.
Hoshin Kanri in Large Steel Producer
Industry: National Steel Provider
Client: Mobarakeh Steel
Nature of work: Hoshin Kanri; Performance improvement; Six Sigma; Project Management
Problem: National programme for trade liberalisation and goal of being a net exporter of steel meant need for being lean, responsive and high performing
Solution: Company wide programme involving all of the quality sciences and disciplines beginning with Hoshin Kanri at the top and cascading down through all departments. TQM projects resulting in savings of $220m between 1998 when we started and 2002 when these figures were presented at the International Quality Conference in Tokyo.
Benefits: Savings of more than $220M in the first three years followed by an average of $70M per year since. Mobarakeh has also moved to number 1 in the world in several features of Iron making and has won the Iranian National Quality Award which is based on the European Quality Award Criteria for the last 4 years in a row. We are now working with them to take the process through their supply chain and assisting other companies under the umbrella of the Esfahan Chamber of Commerce. Mobarakeh Steel is now going through the process of privatisation.