Economic Principles
Genre: Business

What are the most significant events in the story of how the plant survived because of its adoption of quality-
based principles?

About the Book

Economic Principles

The significant events in the story of how plant survived the crisis because of its adoption of quality based principles are as follows.

Going back to basics: Company decided to go back to initial set of process after curl problem was solved. After the curl problem there was pressure from the higher management to increase the productivity as the company was making a loss of around $ 10 million a year for two years. The pressure to increase productivity had changed lot of processes. Going back to the basic meant company was on its way to do the right thing ignoring the pressure to achieve the productivity.

Shut down rules: (Kaynak, H. 2003) major factor that compromises quality on the shop floor is the ambiguity about the quality and process adherence. At Preston, it suffered a loss of around $400,000, because product had to be scrapped, the reason being operators were in doubt whether to shut the line or go ahead. With the encouragement to the shut down rules, the company made it clear that it focuses on increasing the quality, reducing the cost (rework and scrap) at the cost of productivity.

Daily Reviews: The process of continuous improvement requires continuous monitoring, identification of problem and implementing the corrective measures. The process of daily review was started as an activity monitoring, discussing the daily problem faced on the shop floor and the areas of improvement. As the saying goes “all of us are smarter than one of us”, the daily meeting ensured that operators were discussing the real problems, reporting the process improvements and moving in the positive direction. This also helped in boosting the morale of the employees as it brought a feeling of doing something right and not doing anything without thinking.

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