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The story of how one Michigan-based automotive supplier, GHSP, embraced the quality circle process and very quickly earned a spot as a leader from one of the most demanding customers in the business
There’s still a little surprise in Beth Koch’s voice when she talks about the Honda of America Manufacturing’s Fall 2008 Supplier Quality Circle Competition.
“We were very proud of what we had been able to do for our company,” says Koch, a quality facilitator at GHSP’s Hart, Michigan plant. “But we were very shocked when we won. Very shocked.”
She wasn’t the only one who was surprised. GHSP, a supplier of mechatronics to the global surface transportation industry, in its first appearance at the fall event, stormed in and swept the competition away, winning first place in the two main categories—problem solving and project circle—as well as first place for the best display board. It was the first time a supplier had won both categories at the competition, which was attended that year by as many as 100 suppliers to Honda and 600 people.
“We value Honda as a primary customer and want to improve development and cost savings,” says Gary Wendt, quality manager for GHSP’s Hart location. “Building quality circles at GHSP has been an enjoyable process, lots of fun with competition, and the program is gaining momentum here.”
A quality circle is a small group of employees who regularly meet voluntarily to discuss performance and problems in their working environment, with the goal of finding solutions. The groups recommend solutions to management and whenever possible, implement the solutions themselves. Quality circles stress employee development and motivation, team building, and working together to solve problems while reducing errors, and enhancing quality and productivity.
The first circles were established in 1962 at the Nippon Telegraph and Telephone Corp. in Tokyo, Japan, and then spread to more than 32 other companies in the first year. The Honda Supplier Conference began in the spring of 2000 as an extension of Honda’s own internal circle competition called NH Circles (the NH meaning New Honda).
According to Leanne Feldpausch, assistant quality manager at the Hart plant, the beauty of quality circles, and the reason they allow problems to be solved so effectively, is that they put the power in the hands of the employees (called associates at GHSP).
“The cool thing about it is you’re bringing a team of associates together and giving them the tools to solve problems,” says Feldpausch. “Instead of someone fixing it for them, we’re empowering them to do it themselves in a fun, team environment.”
Just one year before the fall 2008 competition, management at GHSP—a supplier of mechanical and mechatronic control systems to surface transportation industries—decided to get serious about quality circles.
The company’s chief operations officer Jeff Smith got excited a few years earlier by the work he saw being done at a Honda supplier conference and came back and encouraged manufacturing locations to get involved.
In 2007, he took the step of asking Wendt to attend Honda’s fall quality circle competition, which brings together all three of Honda’s northern, central, and southern regions. Wendt returned and put together the company’s first quality circle project team called Driving in Circles. Their task: implementing quality circles and preparing for the upcoming spring Honda competition (a smaller event for just the central region).
That team helped form the Linemen—a problem-solving team working to tackle quality defects in the paint line. That spring, Driving in Circles took second place and Linemen took fourth place—marking the first time a supplier took home two trophies from the competition and setting the stage for GHSP’s stellar performance the following fall at the national event.
The Honda competition has two main categories—problem solving and project circle—and each supplier can enter one team in each. GHSP picked their top team in each category by presenting the problems they identified and how they implemented solutions in the past six months.
Koch’s team, the Island Day Dreamers took first place in the problem-solving category in fall 2008 for their work increasing inventory accuracy from 88 percent to 98.3 percent.
The team that took first place in the project circle that year, the Civic Crusaders, experienced success reducing start-up time, running checks on the Honda Civic line before each shift starts. They have reduced the time it takes to run the checks from 12 to eight minutes.
GHSP’s success continued at the spring 2009 competition, where their Aces Wild team took first place in problem solving for their work reducing changeover scheduled downtime by 47 percent. (Changeover is time when a molding machine is fitted with a new tool to make a different production part. Molding downtime means the machines are not producing parts, this not being productive for the company).
Here’s a closer look at how the quality circle process helped two winning teams tackle a project or solve a problem.
• The problem. The challenge was improving molding inventory accuracy. The quality circle process helped the team focus on reducing molding inventory shortages due to label printing issues. In short, employees who weren’t familiar with how to properly make bar code labels for products (one for each tote) were printing extra labels, so some were being counted twice in inventory.
• The approach. The team used root cause analysis tools such as brainstorming and fishbone diagrams (diagrams that identifies many possible causes for an effect or problem) to understand the current situation.
• The solution. The team removed the multiple printers in molding and replaced it with one printer alongside a container for extra labels. Now, all labels were printed to a single location and extra labels were all stored in the same place, eliminating confusion about what had already been counted.
• The result. Increased inventory accuracy from 88 percent to 98.3 percent
• The project. The goal was to reduce startup time on a major product line to 600 seconds (10 minutes). As it was, a few people on the line would run test parts to start up the line while other employees stood back and waited.
• The approach. The team used the circle process to establish the goal, timing, current state, and desired future state. The team worked with many people including process engineers and line associates to determine areas of improvement using data analysis techniques, process flow diagrams, time studies, and line balance studies. Tools such as a decision analysis matrix and risk assessments helped the team stay focused on the goal while understanding the risks of those decisions.
• The solution. The team moved to a line balance approach for startup, dividing the process evenly among all employees on the line.
• The result. Reduced startup time on the line from 758 seconds (12.6 minutes) to 529 seconds (8.8 minutes). On a weekly average, this went from 525 startup minutes per week to only 80 minutes per week.
GHSP has been asked countless times for the secret to their success with quality circles. Wendt points to one contributor—the company assigns two facilitators or coaches to each new quality circle that forms. At first, those coaches were the members of the original team whose project it was to develop quality circles. That team later became the Quality Circle Steering Committee.
“They work with the teams since they have already been through the process,” says Wendt. “It adds a whole new level since they have experienced it.”
GHSP also has the advantage of strong dedication to quality circles from management, all the way to the top ranks of the company. Koch says she felt this support when they first began quality circles. “They really took the time to work with us and show us the things that worked for them and the things they learned. Hopefully we will be able to do that for others, too,” Koch adds.
People like Wendt and Feldpausch tackle this responsibility on top of their daily work. “There’s a lot of pride in what we’re doing,” Wendt notes. “Really it’s the fun part of our jobs.”
Since implementing quality circles, GHSP has realized considerable cost savings—either in direct savings or in cost avoidances.
Besides the tangible benefit of saved money, Feldpausch sees countless intangible benefits among the company’s associates. “It makes associates realize, ‘Hey, my thoughts did mean something,’ It opens them up to the idea that they’re here because of their minds—that we want them to think about what they’re doing,” continues Feldpausch.
Each team also meets with their plant manager while they work on the step of the circle process called “understand the problem.” This helps them to see how the problem, and their solution, impacts the business model. In the end, they make a presentation for the executive staff. “They get a lot of recognition that they have worked on this,” says Feldpausch. “You’re building a trained work force in a fun environment. Even though it’s work, we try to keep it fun.”
In fact, even though Honda will not hold its fall 2009 competition because of the economic climate, GHSP will hold its own internal competition with the support of Honda.
“This is too important of an effort to stop now,” Wendt says. “From a business standpoint, now is the time to do quality circles because we want to always be focused on ways we can improve.”