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Solutions February 2006
Building
Quality Into Your Company
Firms
that adopt quality programs win
customer loyalty, employee commitment
and consistent sales growth.
Your
5-year-old camera, although clunky,
captures colors as good as a new
one. The waiter at the nearby
restaurant always welcomes you
with a smile and brings your favorite
dish cooked just the way you like
it. Your car dealership mails
you a reminder about the oil change
and 60,000-mile service you need,
and it does a great job.
Quality
takes many forms. Sometimes it’s
the product itself, dominating
competitors because of superior
craftsmanship, innovation or esthetic.
Sometimes a mundane product delivered
with superior care or panache
stands out above all competitors.
Organizations that carefully manage
the customer care process seem
to ooze quality.
Customers
expect exceptional performance
and reliability, competitive prices,
on-time delivery and more. It’s
not enough for a company to be
good; everybody is good. That’s
why virtually every industry today
is looking at quality practices.
The printing industry, however,
lags other major industries in
the United States in understanding,
utilizing and benefiting from
quality practices, says John Compton,
who has more than 25 years’
experience in quality systems.
Compton taught various courses
on quality systems at the Rochester
Institute of Technology, N.Y.,
and now runs Compton and Associates,
a consulting firm in Colleyville,
Texas.
But
some forward-looking printing
firms have successfully adopted
world-class quality practices.
Their years of hard work and persistence
have paid off not only on the
bottom line, but also in accolades
from international organizations,
loyalty from customers, respect
from peers and commitment from
employees.
The
three companies profiled here
define quality differently, but
they all understand that quality
isn’t merely a calculation
of defects per number of products
manufactured. Quality concerns
extend into every corner of their
businesses, from sales to finance
to human resources and beyond.
WINNER:
McNaughton-Gunn Inc.
SUCCESS
WITH:
Total
Quality Management
Lean Manufacturing
ISO Standards
In
1986, Bob McNaughton, founder
of McNaughton-Gunn Inc., wanted
a system to manage his book manufacturing
company that was growing at a
tremendous pace. Located in Saline,
Mich., the firm found it impossible
to escape the influence of the
region’s automotive industry,
which was being swept by the quality
movement.
McNaughton
hired Jim Clark, who led the adoption
of Total Quality Management (TQM),
an approach based on achieving
long-term success through customer
satisfaction (See “Total
Quality Management” sidebar).
All employees participate in improving
processes, products, services
and the culture. “Basically
everyone was responsible for quality
in our system,” says Clark,
now the director of customer and
business services at McNaughton-Gunn.
When there was a problem, the
company collected data, took action
to fix the problem and documented
it. Three to six months later,
the firm reviewed the results.
For example, the company ordered
cartons to hold books, but many
times had to reorder because the
cartons were either too small
or big. Using the TQM approach,
the company set up a team to look
at how it used cartons over a
period of time. The team analyzed
the numbers and found that the
company could fit 85 percent of
the books in seven standard cartons—a
move that saved it $45,000 that
year.
TQM
was a companywide initiative,
which Clark found easier to implement
in manufacturing than in the customer
service and administrative areas.
“We would always tell the
sales, customer service and administrative
staff that when manufacturing
improves, your life improves because
you can better satisfy the customer
and you get paid faster,”
Clark says.
Another
thing the company told its employees
was that there’s only one
customer—the book publisher—and
they had only one job—to
satisfy the customer. “Our
thought was if we make internal
decisions that don’t help
the customer, then we’re
doing a disservice,” Clark
says. “From a process standpoint,
we asked: ‘Does this help
us and does this also help the
customer?’ If it only helps
us and hurts the customer, we
don’t view that as a process
improvement.”
Culturally,
the company didn’t need
to make tremendous changes because
it always focused on its customers
and people, a recommendation of
almost all quality systems. The
TQM approach, however, helped
it make minor, but effective changes.
For example, the company’s
customer service area, called
sales service, consists of a customer
service representative, an estimator,
a preflighter and two planners
who work as a team and share an
office. Instead of using the traditional
approach of having separate customer
service, preflight, estimating
and planning departments, the
company has one department that
makes quality-related decisions
quickly. If a customer sends a
bad file, the team quickly figures
out if it’s going to charge
the customer extra, etc. “What
we found is that by putting these
people together, the decisions
can be made quickly and to the
satisfaction of the customer and
our process,” Clark says.
McNaughton-Gunn
defines quality as performance
to requirements. “What the
customer requires is really the
issue as well as its full service,”
Clark says. “The specs are
easy—a customer wants a
6 x 9-inch book with 280 black-and-white
pages, and full-color cover and
dust jacket. It’s the other
stuff that’s critical. Are
we offering the right paper? Do
we have shipping instructions?
Do we have everything to make
it into a positive experience
for the customer and the company?”
McNaughton-Gunn
constantly evolved its quality
approach. In 1993-94, it adopted
concepts of lean manufacturing,
a system of techniques and activities
used to run a manufacturing operation
(See “Lean Manufacturing”
on p. 32). It’s based on
the principle of eliminating non-value-adding
activities and waste. When customers
asked the company why it didn’t
quote prices quickly enough, Clark
says that lean manufacturing helped
uncover the fact that customer
service spent too much time communicating
with estimating, which was located
at the other end of the plant.
So it placed the two departments
together to quickly come up with
prices.
Over
the years, the company’s
annual sales increased 10 percent
annually. But post 9/11, its sales
figures dropped. “Although
we lost about $4 million in sales,
we adjusted our entire quality
system and our cycle time improved
tremendously,” Clark says.
“The system allowed us to
maintain a level of profitability
and keep the company where we
wanted it. It kept us moving forward.”
Two
years ago, McNaughton-Gunn started
looking for other ways to perform
even better. It researched the
ISO (International Organization
for Standardization) standards
that companies apply for organizational
improvement (See “ISO 9000
Series” on p. 34). In 2005,
the company received the ISO 9001:
2000 certification. “We
see ISO taking us to the next
step— a greater improvement
in quality and employee involvement,”
he says. “We think that
ISO will point things to us faster—quicker
metrics, audits and process improvements.”
McNaughton-Gunn
now uses a combination of ISO
and lean manufacturing. It’s
hard work, but the 220 employees
think of it as the way the company
operates. They understand that
they are responsible for quality
every day. “They want to
be responsible for the job and
what they do,” Clark says.
“Our retention level last
year was 93 percent. That speaks
volumes.” Solid and sustained
quality has led to satisfied and
repeat customers, and the approach
offers the company a way to measure
its performance. “You have
the metrics that show which things
contributed and which didn’t.”
Simply
put, quality brings in profits,
Clark says. “If we can constantly
find a way to keep the processes
moving the right way, there will
be money for us in the end,”
he says. “When the processes
within begin to fall apart, we
lose money and customers don’t
get satisfied.”
WINNER:
Hammer Packaging
SUCCESS
WITH:
ISO Standards
More
than nine years ago, Jim Hammer,
president and CEO of Hammer Packaging,
wanted his company to grow considerably,
but at the same time ensure that
its processes remained in control.
“We
had to have enough checks and
balances in place so that as we
grew the business, we would not
get away from doing our core things,”
he says. The Rochester, N.Y.,
company offers sheet-fed cut and
stack labels, box wraps and
premium packets, roll-fed UV and
water-base flexographic pressure
sensitive labels, wrap labels,
and form and fill labels for consumer
products. The company has 400
employees and reported annual
sales of $70 million in 2005.
Hammer
Packaging’s goal was to
achieve consistency in its manufacturing
operations. It wanted employees
to do everything right and in
the same way so that there was
consistency from shift to shift,
every day. The company operated
three shifts, seven days a week.
“We had to make sure that
everyone was consistently doing
the same thing,” Hammer
says. “People get involved
in the printing business and tend
to change the process and this
causes a shift in the quality.
The idea was to get everybody
on the same page and do the same
thing.”
Hammer
decided to adopt ISO standards
because “it was the most
standard system in the industry
and the most acceptable one in
our segment of the industry,”
he says. The company received
ISO 9002 certification in January
1997 and ISO 9001: 2000 in April
2003. The ISO 9000 Series is a
set of international standards
for quality management and quality
assurance. ISO developed the standards
to help companies effectively
document the elements they need
to maintain an efficient quality
system.
Hammer
brought John Compton in to train
employees. Compton then taught
at Rochester Institute of Technology
and was heavily involved in the
quality movement in the printing
industry. “The biggest thing
was to train people on what quality
is and set up a total quality
management process,” Hammer
says. To do that, the company
created teams in each manufacturing
operation. For instance, if there
were 10 presses in the pressroom,
it placed 10 teams. Top management
met quarterly with every team
member and discussed the goals
for that quarter. At the end of
the quarter, they discussed results
and figured out why they didn’t
meet goals if that was the case,
and then developed the next set
of goals. The company repeated
the process in all manufacturing
departments—from prepress
to press to finishing.
Hammer
also held departmental meetings
every three months. “I just
continuously talked to people
about quality management and why
we had to be in quality mode,”
he says. “It’s a lot
of discussions, meetings and emphasizing
that this isn’t an option—either
we’re going to be in this
or we won’t be in business.
At the end of the day, if you
don’t have the organization
and teams with the same culture
and principles, you’re going
to have problems.”
The
biggest challenge is changing
the company’s culture and
involving the top executives.
“You have to walk the talk,”
Hammer says. “Top management
can’t delegate it to somebody
else. You have to make people
understand each and every day
what quality means. It’s
not something that you turn a
switch on and it’s done.”
For
the last eight years, Hammer Packaging
has been featured in the Printing
Industries of America ratio study,
listed among the top 25 percent
of companies that make profits.
“We’ve been growing
10 to 12 percent every year for
the last eight years, in spite
of the economic downturn,”
Hammer says. “The quality
system is definitely one of the
ingredients behind the growth.”
WINNER:
Branch-Smith Printing
SUCCESS
WITH: Baldrige Criteria for
Performance Excellence
Branch-Smith
Printing embarked on its journey
of continuous improvement in 1992.
“We thought we’ve
got to find a way to systematically
manage the business,” says
Daniel Hanson, vice president
of the Fort Worth, Texas, company.
The
company set its goal: to attain
the highest level of performance
defined in the United States by
the Baldrige Criteria for Performance
Excellence (See sidebar at right).
“Baldrige is an approach
to run a business,” Hanson
says. “It’s about
how you run leadership, strategic
planning, marketing, sales, process
control, information systems and
human resources in your organization.”
The system allows a company to
raise its performance in every
aspect of its business.
Branch-Smith
started on a smaller scale. In
1995, it entered the state-level
Texas Quality Award contest based
on the Baldrige criteria. “Because
it uses the same approach and
criteria as the Baldrige, it helped
the company prepare,” Hanson
says. (Meanwhile, the company
gained ISO certification in January
1996.)
The
Texas Quality award, now known
as the Texas Award for Performance
Excellence, consists of three
levels. If a firm’s application
has merit, it passes the first
level and is considered for a
site visit by the judges. If a
company passes the second level,
the judges visit the company and
choose winners at the last stage.
In 1997, the company didn’t
pass the first level, and in 1998
it didn’t receive a site
visit.
A
helpful feature of the application
process is its feedback report,
Hanson says. Examiners study the
application and tell the company
which areas it needs to improve.
In 1998, Branch-Smith Printing
used the feedback and applied
the changes to its 1999 strategic
plan. It worked and the company
won the Texas quality award. “It’s
not about winning the award, but
about proving your operation,”
Hanson says.
Encouraged,
the company submitted its first
Baldrige application in 2000 and
passed the first level. It used
the extensive feedback to improve
its processes, reapplied in 2001,
received a site visit, but didn’t
win the award. The distributorship
later found out that the judges
were concerned about the recession
in the printing industry. “The
last thing they want is an organization
that’s really not that grounded
or isn’t stable to the point
that it wins the Baldrige this
year and the next year it’s
out of business,” Hanson
says. “That discredits the
program.” The company submitted
another application and won the
award in 2002. “During that
time, we showed some dramatic
progress compared to where the
rest of the industry was,”
he says. “We were growing
quite well when our competitors
were failing.”
Although
the goal was difficult, Hanson
and David Branch, the company’s
president, remained persistent
because they believed that the
process would elevate the company.
“To us quality is about
performance excellence,”
Hanson says. “Quality is
synonymous with product quality,
but that’s one attribute.
It doesn’t mean you’re
running your business well. Performance
excellence is about identifying
what’s really important
to this organization, measuring
it and managing it in such a way
that you are continually improving
and doing what’s right for
all stakeholders—customers
and employees.” For instance,
the approach helps make the company’s
mission and objectives clear.
It allows the company to measure
its performance in six areas,
including leadership, strategic
planning, customer and market
focus, measurement, analysis and
knowledge management, human resource
focus and process management.
It
also ensures that a company has
a strategic plan that’s
functional. Branch-Smith Printing’s
plan defines its key objectives:
Having business and manufacturing
excellence, to be a partner of
choice for its customers, and
a partner of choice for its employees.
The company’s sales have
increased every year since 1997.
It reported $5.7 million annual
sales in 1997 and $13 million
in 2005.
After
employing the Baldrige approach,
Branch-Smith is ready to compete
on a global scale. “We realize
we have to be world class in what
we do because we don’t want
our customers to say that there’s
a better option,” Hanson
says. “What’s going
to happen is that American printers
are going to wake up and say we’ve
lost customers to overseas competition.
For us to succeed, we need to
be a leader in the industry—that
you receive something here that
you can’t receive elsewhere.”
Preeti
Vasishtha is assistant editor
at Print Solutions magazine. Email
her your comments at pvasishtha@PSDA.org.
