This article was downloaded by: [ITESM - Campus Monterrey]

On: 13 August 2015, At: 08:57

Publisher: Routledge
Informa Ltd Registered in England and Wales Registered Number: 1072954 Registered office: 5 Howick
Place, London, SW1P 1WG

Total Quality Management & Business Excellence

Publication details, including instructions for authors and subscription information:
http://www.tandfonline.com/loi/ctqm20

Can TQM Lift a Sinking Ship? A Case Study

a

Mohan Rao , Mohamed Youssef & Carol Stratton

College of Business Administration, The University of Texas Pan American, Edinburg,

Texas, USA
b

Norfolk State University, Virginia, USA

Film & Converting Group of American Mirrex, Salisbury, Maryland, USA

Published online: 03 Jun 2010.

To cite this article: Mohan Rao , Mohamed Youssef & Carol Stratton (2004) Can TQM Lift a Sinking Ship? A Case Study, Total
Quality Management & Business Excellence, 15:2, 161-171, DOI: 10.1080/1478336032000149009
To link to this article: http://dx.doi.org/10.1080/1478336032000149009

PLEASE SCROLL DOWN FOR ARTICLE

Taylor & Francis makes every effort to ensure the accuracy of all the information (the Content) contained
in the publications on our platform. However, Taylor & Francis, our agents, and our licensors make no
representations or warranties whatsoever as to the accuracy, completeness, or suitability for any purpose of
the Content. Any opinions and views expressed in this publication are the opinions and views of the authors,
and are not the views of or endorsed by Taylor & Francis. The accuracy of the Content should not be relied
upon and should be independently verified with primary sources of information. Taylor and Francis shall
not be liable for any losses, actions, claims, proceedings, demands, costs, expenses, damages, and other
liabilities whatsoever or howsoever caused arising directly or indirectly in connection with, in relation to or
arising out of the use of the Content.
This article may be used for research, teaching, and private study purposes. Any substantial or systematic
reproduction, redistribution, reselling, loan, sub-licensing, systematic supply, or distribution in any
form to anyone is expressly forbidden. Terms & Conditions of access and use can be found at http://
www.tandfonline.com/page/terms-and-conditions

Total Quality Management,

Vol. 15, No. 2, 161171, March 2004

Downloaded by [ITESM - Campus Monterrey] at 08:57 13 August 2015

Can TQM Lift a Sinking Ship? A Case

Study
MOHAN P. RAO*, MOHAMED A. YOUSSEF** &
CAROL J. STRATTON
*College of Business Administration, The University of Texas Pan American, Edinburg, Texas,
USA,
**Norfolk State University, Virginia, USA,
Film & Converting Group of American Mirrex, Salisbury, Maryland, USA
A This case study deals with the issue of TQM implementation. It demonstrates how
TQM can not only help save a company but also make it protable within a short few years.
The results of successful implementation of TQM in this plant resulted in: (1) reduced product
returns from over 7% of sales to less than 1%; (2) reduced rework from over 1 million pounds
to less than 150 000 pounds; (3) reversed the course from losing sales to gaining sales, customers,
products, and prots and, more importantly, helped save this plant from closing. The ndings of
this case study have many implications for practitioners and academicians.
K W: TQM implementation, company prots, reduced product returns, gaining sales

Introduction
Quality has been growing in importance for many years now. In the past two
decades, quality has become one of the main dimensions on which manufacturing
as well as service organizations may compete. The quality management literature
is replete with research papers that deal with dierent facets of quality
management. Youssef (19922002) studied TQM implementation issues in
manufacturing and service companies. He found that proper implementation of
TQM fosters enterprise integration and creates a quality culture that embraces
continual process improvements. Furthermore Youssef (19922002) found that
TQM transforms the company into a time-based competitor, where customer
needs are met in an agile manner. More importantly, Youssef (1992, 1993,
1994a,b, 1995, 1996), and Youssef et al. (2002) and Soliman & Youssef (2001)
found that TQM companies enjoy cost-eciency, exibility and responsiveness.
In all of the above mentioned studies, it is maintained that management
commitment to the TQM philosophy is the major contributor to the success of
any quality initiative.
Notwithstanding the bulk of papers written on the subject, a case approach
Correspondence Address: M. A. Youssef, Department of Management & Decision Sciences, School of
Business, Norfolk State University, Norfolk, VA 23504, USA. E-mail: mohamed.youssef@nsu.edu
1478-3363 Print/ 1478-3371 Online/04/020161-11 2004 Taylor & Francis Ltd
DOI: 10.1080/1478336032000149009

Downloaded by [ITESM - Campus Monterrey] at 08:57 13 August 2015

162

M. P. Rao et al.

to quality management and its implementation has proven useful. The contribution of this case study to the TQM literature is signicant, for it shows how
TQM transforms a manufacturing plant into a major competitor in its industry.
A survey of 685 corporate executives by Forum Corporation conrmed that
senior executives are increasingly likely to mention customer satisfaction as their
organizations top priority (Newhard, 1992). In a 1993 Purchasing magazine
survey, quality ranked number one on the management hot buttons list. However,
many organizations are having trouble moving from awareness and interest to
real sustained action and acceleration of Total Quality Management (TQM)
eorts (Newhard, 1992). According to Economist (1992), There is mounting
evidence that the quality programs of many western companies are failing
dismally. Some of the most damning testimony comes from the very consultants
that helped managers to implement those programs. A new survey by Arthur D.
Little of 500 US manufacturing and service companies found that only a third
felt their total-quality programs were having a signicant impact on their
competitiveness.
It is not easy for management to implement TQM because TQM means a
cultural overhaul. It is, in a way, similar to most people who like to be healthy
and want to look good, but cannot practise a daily regimen of exercise and
eating right. While some never get the wake-up call, others get the message when
they are on the verge of catastrophe. In this case study we demonstrate how the
successful implementation of TQM not only helped save a company but also
made it protable.
Background
The Film and Converting Group plant in Salisbury, USA, manufactures a wide
variety of PVC and ABS products, which are used in automobiles, ooring, and
wall coverings. In general, 19891993 was a critical period for the facility.
Through reorganization and the introduction of TQM, the facility managed to
go from being on the verge of shutting down to being a protable organization.
Since 1981, the larger the volume produced and sold, the more money the plant
lost. By 1989, returns were in excess of 7% of sales (approximately $1 400 000)
and rework inventory was over 1 000 000 pounds. As a result of poor quality
and communication, the plant was quickly losing customers. Because of these
mounting losses, it was decided that either the plant must break-even by the end
of 1990 or be shut down.
Initial Strategic Changes
In order to survive, the Salisbury facility needed to make major changes in its
business operations. However, it could not count on the parent company to
provide much capital, or many resources. The mission was the rst thing to
change. Instead of being only a user of PVC resin, their sole mission was to have
a break-even year. Several major steps were taken to accomplish the mission.
Behavioural changes became the initial focus. It wanted to do things smarter,

Can TQM Lift a Sinking Ship?

163

safer, and right rst time. It was thought that a modication of the product mix
and a reduction in workforce should take place initially to reduce losses.

Downloaded by [ITESM - Campus Monterrey] at 08:57 13 August 2015

Communication, Quality and Safety

Since behavioural changes were the initial focus, communication throughout the
plant needed improvement. Every day the production foremen were given
production reports that detailed the number of pounds produced over the last
24 hours. However, this report ignored the quality of the product. To make the
change from quantity to quality, management decided to hold daily production
meetings where the quality of the previous days production would be discussed.
Employees did not have all the information they needed to produce the
product. They were not furnished with specications, visual standards and/or
packaging specications. To expand the information available, management
increased meetings, conversations, and correspondence with customers as well as
employees to make sure needs were being satised.
Training on working with others was conducted to help smooth the change.
Team-building was taught to the managers who reported directly to the plant
manager. Foremen and Supervisors attended Professional Supervisor Training,
which focused on creating a positive environment, and maintaining the selfesteem and morale of the employees. In 1989, a consulting group was hired to
train managers in the Deming philosophy and basic SPC techniques. These
managers were then certied to conduct the training in their own facilities. The
Salisbury facility decided to train all employees, and by April 1990, everyone
had attended a two-day seminar on the Deming philosophy and basic SPC
techniques. The goal was to promote a feeling that each job is important and
that every employee could make a dierence in the quality of the product. This
understanding of other people plus the feeling of importance brought about
improvements in communication.
In 1990, two hourly employees were chosen to attend a safety programme. As
a result, the Salisbury facility developed an employee-based Safety Committee
facilitated by the Safety Manager. The Salisbury committee became very active.
Since safety was an aspect of their jobs that aected them directly and immediately, they were given the power to make changes if safety was threatened. Before
this time, machines were rarely shut down. By showing the employees that they
could change things to improve their work environment, management was
gaining trust, which laid the groundwork for employee involvement in other
areas.
Operational Changes
The rst operational change was instituting a Process Improvement Team
(PIT). A PIT is a cross-functional group of associates that closely studies a
particular process. They dene the inputs materials, methods, manpower,
machines and environment as well as the suppliers, managers and customers.
In the end, the PIT makes recommendations to management for improvement
of the process. The purpose of a PIT is to improve an entire process.

Downloaded by [ITESM - Campus Monterrey] at 08:57 13 August 2015

164

M. P. Rao et al.

Figure 1. Reduction in returns

After the rst two quarters of 1990, improvements were noted. Returns and
rework inventory were both down (see Figures 1 and 2). However, the plant was
still losing money. So the management decided to change the product mix, and
eliminate the converted wall-covering product, which was causing losses. As a
result, the Converting department did not need to operate at full capacity, and
21 employees, both salary and hourly employees were let go. By January 1991,
working time changes were made from three 8-hour shifts to two 12-hour shifts
and alternating 3- and 4-day workweeks.
Initial Results
At the end of 1990, the plant nearly broke even. The downward trend associated
with returns (56% reduction) and rework inventory (32% reduction) had continued throughout the year. If the change in product mix had been in eect
earlier in the year, the plant may have even operated at a prot. The safety
record was improving. There had not been lost time due to injury since August
1990. Communications had improved both inside and outside the plant, and the
rst PIT was beginning to make progress. However, morale suered as a result
of the reduction in workforce. The following steps were taken in 1991 with the
hope of continuing good trends and to get the employees to feel better about
the plant.

Downloaded by [ITESM - Campus Monterrey] at 08:57 13 August 2015

Can TQM Lift a Sinking Ship?

165

Figure 2. Reduction in rework inventory

(1) A weeklong shutdown was held in April to conduct training for all employees.
(2) Sta members attended additional team-building and SPC sessions to help
improve communications.
(3) Supervisors and foremen continued to attend Professional Supervisor
Training.
(4) Two QITs (Quality Improvement Teams) started, one completed.
(5) Less focus on quantity of material produced. More focus on quality and
safety.
(6) Supervisors and managers were trained in problem solving and decision
making (PSDM) techniques.
By the middle of the year, customer complaints (verbal or written complaints
that did not require material returns) were nearly non-existent. Morale was
improving, and the plant was operating at a prot. At the end of 1991, the State
of the Plant address (a meeting held o-site for all employees, given by the Plant
Manager) was much dierent that in the previous years. There was no talk of
shutting down, reduction in workforce or pay cuts. The plant did not lose money.
Returns had been reduced another 48%, and rework inventory was down by
53%. QITs, Task Force groups and PSDM sessions were addressing quality and
productivity issues. Most importantly, however, was the possible sale of the

166

M. P. Rao et al.

plant. American Mirrex was interested in purchasing the plant. The Salisbury
facility had progressed from nearly closing down, to being an attractive purchase
by private investors.

Downloaded by [ITESM - Campus Monterrey] at 08:57 13 August 2015

A New Company, a New Mission

In March 1992, the Salisbury facility became the Film and Converting Group
of American Mirrex. As expected, with the purchase came investment into the
plant. American Mirrex committed to investing about $6 000 000 over the next
three years. In 1992, employees became associates. This was more than just a
name change. It meant involvement. With the separation from Occidental came
autonomy, a feeling that what the plant accomplished was important. Now, there
were private investors that looked to the plant to make a prot. At a meeting in
March 1992, Bill Bullard (President of American Mirrex) gave a short presentation about why they purchased the Salisbury facility, and about the ultimate goal
of the company. He said, Our primary goal is to make money. At the Film and
Converting Group, the means to achieve that goal is TQM. That is, producing
quality products in a safe manner, with respect and care for the environment,
community and each other.
American Mirrex is taking a long-term approach with the Salisbury facility.
They developed a strategic plan called Vision 96. It is basically a plan to achieve
a certain level of sales by 1996. It includes planning in all areas of the organization
(technical, production, nance, sales/marketing, and safety, etc). All yearly
strategic plans have to be in line with this vision.
In August 1992, the plant had achieved 2 years without lost time due to injury
and had the best IIR (OSHA incident rate) in the state of Maryland for
manufacturing facilities 0.47. At the end of 1992, the success brought on by
TQM was very clear. Returns were less than 1% of sales and rework inventory
was less that 150 000 pounds. The plant achieved record production volumes,
made 180% of budgeted prot, and was gaining new products and customers.
On 14 March 1997, Vinyl Plastics, Inc. (VPI) acquired American Mirrex Corporation with facilities in Salisbury, Maryland, and Delaware City, Delaware. With
this acquisition, VPI doubled its employee base, and more than doubled its sales
potential to $200 million a year. The facility in Salisbury, Maryland, has become
VPIs Film and Converting Division.
Summary and Conclusions
This paper presented a real world case of how implementing TQM can do
wonders for a company. A summary of TQM at the Film and Converting Group
of American Mirrex is shown in Table 1. TQM helped save this plant from
closing, reduced product returns from over 7% of sales to less than 1%, reduced
rework from over 1 million pounds to less than 150 000 pounds, reversed the
course from losing sales to gaining sales, customers, products, and prots. TQM
can be successful in any organization as long as there is commitment to make a
change.

Can TQM Lift a Sinking Ship?

167

Table 1. Summary of TQM at The Film and Converting Group, Salisbury

(1)
(2)
(3)
(4)

Downloaded by [ITESM - Campus Monterrey] at 08:57 13 August 2015

(5)
(6)
(7)
(8)
(9)

The right conditions. Philosophysupportive environment

Training of all associates
Involvement of all associates. Started with safety programme
Problem solving as a team eort: Quality Improvement Teams, Process Improvement
Teams, Task Force Groups, PSDM sessions to solve problems
Documentation: Quality Manual, Policies and Procedures
Quality Audits: Internal and supplier audits
Quality Techniques: Control charts, Capability Data, Designed Experiments
Good communication: Monthly quality discussions, Circulation of all quality issues
ISO 9002: Policies/Manuals/Procedures

References
Economist (1992) The cracks in quality, Economist, 323 (7755), pp. 6768.
Newhard, S. (1992) Getting results fast from a long-term commitment to total quality, Quality, 31(8),
pp. Q7Q8.
Purchasing (1993) Quality is still number 1, Purchasing, 114(5), pp. 2021.
Soliman, F. & Youssef, M. A. (2001) The impact of some recent developments in e-business on the
management of next generation manufacturing, International Journal of Operations and Production
Management, 21(5, 6), pp. 538564.
Youssef, M. A. (1992) Agile manufacturing: a necessary condition for competing in global markets,
Industrial Engineering, 24(12), pp. 1821.
Youssef, M. A. (1993) The impact of computer-based technologies on exibility, International Journal of
Technology Management, 8(35), pp. 355370.
Youssef, M. A. (1994a) Design for manufacturability and time-to-market, part 1: theoretical foundations,
International Journal of Operations and Production Management, 14(12), pp. 621.
Youssef, M. A. (1994b) The impact of the intensity level of computer-based technologies on quality,
International Journal of Operations and Production Management, 14(4), pp. 527.
Youssef, M. A. (1995) Competing in global markets on the basis of speed and agility, in: R. Zaman (Ed)
Competing in Global Economy, pp. 146160 (Ithaca, NY: Ithaca College Press).
Youssef, M. A. (1996) The impact of total quality management on Firms responsiveness: an empirical
analysis, Total Quality Management Journal, 7(1), pp. 127144.
Youssef, M. A., Mohamed, Z., Sawyer, G. Jr. & Whaley, G. (2002) Testing the impact of TQM and DFM
on the ability of small to medium size rms to respond to their customer needs, Total Quality
Management Journal, 12(3), pp. 301313.

Appendix A. Printing Process Description

Polyvinyl chloride lm is printed on one of four Rotogravure printing presses
(see Figure 3). The lm is unwound on the press feed rolls and mechanically
moved through the printing stations. Automatic splicing of the rolls produces a
continuous lm. At each station, ink is applied via printing rolls. The printed
lm is rewound on a core, cut, inspected, and repackaged for storage and
shipment to the customer.
Ink formulations are prepared from ink concentrates, extenders, and solvents.
The three major solvents are ethyl acetate, isopropyl alcohol, and methyl ethyl
ketone. They are stored in three 12 000 gallon underground storage tanks, then
transferred to an Ink Make-Up room where they are added to make-up tanks in

Downloaded by [ITESM - Campus Monterrey] at 08:57 13 August 2015

168

M. P. Rao et al.

Figure 3. Rotogravure printing material ow

which the ink concentrates and extenders are also added. Finished inks are
transferred to portable containers and moved to the printing stations in the Print
Room.
During the printing operation, the solvents are removed from each printing
station via heated air in drying ovens. Intake air to the ovens is supplied by fans;
the air is indirectly heated to 110120F using steam. The exhaust air from the
drying ovens is removed via ductwork to the atmosphere. Separate intake and
exhaust ductwork is provided for each dryer.
Appendix B. Laminating Process Description
A surface-printed semi-rigid polyvinyl chloride lm is laminated onto a clear
polyvinyl chloride lm and subsequently embossed, trimmed, and rewound onto
a core in line.
The laminating operation (see Figure 4) employs no adhesives, thus relying
solely on heat and pressure to facilitate bonding. Both plies are preheated by
wrapping them on a steel roll heated by steam to 200F. After preheating, the

Downloaded by [ITESM - Campus Monterrey] at 08:57 13 August 2015

Can TQM Lift a Sinking Ship?

169

Figure 4. Laminating and embossing material ow

plies are fused together at a pressure nip consisting of a rubber impression roll
and a steel roll heated by steam to 350F. The temperature of the laminated
product is maintained prior to embossing by S wrapping it on ve steel rolls
heated by steam to 350F. The embossing then occurs as a pressure nip consisting
of a rubber impression roll and an engraved steel roll chilled to 50F. The nished
product, which is now a 2 ply embossed vinyl lm laminate is trimmed to the
desired width, wound onto a core, and packaged for storage or sale to a customer.

Appendix C. Calendar Process Description

Polyvinyl chloride resin stored in silos and phthalate plasticizers stored in tanks
are conveyed to ribbon blenders for mixing in batch quantities (see Figure 5).
Miscellaneous plasticizers, stabilizers and llers are added to the blender from
bag and drum storage. These ingredients are blended mechanically in the ribbon
blender until the resins have suciently absorbed the liquid plasticizers and
stabilizers. The jacketed blender is steam heated to 240F. The blended batch is
then fed by gravity to a Banbury Mixer where colour pigment dispersions are
added and the blended ingredients are further mixed under heat (375F) and
pressure to form a homogeneous and molten mass. The Banbury batch is then
fed by gravity to a two-roll mill for working the stock into sheet form and
continuous strip feeding to a strainer. Mill and strainer temperatures are 350F.
The strainer screw pumps the material through a screen pack for removal of
contaminates and onto a conveyor to the second mill operation for sheet forming
and continuous strip feeding ot the calender for lm formation.
The strip from the mill conveyor drops by gravity to the top rolls of the fourroll inverted L calender. The stock is then formed continuously by passing
through the successive heated roll nips (360F) of the calender where gauge and
width are determined. The material is then stripped from the bottom roll of the
calender in lm form, cooled over cooling drums and conveyed to a winder for
winding into roll form of various lengths and widths. The individual rolls are
packaged, palletized, and warehoused for shipment to customers.

Downloaded by [ITESM - Campus Monterrey] at 08:57 13 August 2015

170
M. P. Rao et al.

Figure 5. Calender material ow

Can TQM Lift a Sinking Ship?

Downloaded by [ITESM - Campus Monterrey] at 08:57 13 August 2015

Appendix D. Product Flow

Figure 6. Product ow

171