Update on Excellence Western Region

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Spectra-Physics Scanning Systems: Focusing on the Customer, Intensely Recounting their progress (and afew missteps), candidly LeaAP. Tonkin How many successful manufacturing companies are willing to share (enthusiastically!) their triumphs and their bloopers with outsiders? And how many managers would allow their employee-run "fun" committee to stage and then videotape events - where managers star alongside the rest of the workers - such as "blind-folded bowling," hog-calling contests, and raucous bubble-bath slide~in parties? When was the last time your plant tour hosts dubbed various visitor groups "spotted owls," "beavers," and the like? For the people at Spectra-Physics Scanning Systems in Eugene, OR, sometimes-unconventional ways lead to bigtime results - average revenue growth greater than 30 percent, for example. Such openness and trust fosters internal teamwork, an intense customer focus, and ever-higher performance levels in quality, new product introduction hits, and profits. Spectra-Physics wasn't always this way. Its transition from a traditional, functionallyorganized company to a market-focused operation started in 1989, as recounted by John O'Brien, president, and Bill Parnell, vice president of operations. This article focuses on several aspects of this passage, including teambased manufacturing and a peer review system, quality improvement team efforts, and crossfunctional new product development teams. No Shoehorns, Please! Getting closer to customers during the past several years resulted in significant cultural changes at Spectra-Physics, recounted John O'Brien. Team-based operations, for example, radically changed the ways people work together within the company and with customers. Yet he added, "We haven't tried to

shoehorn team operations into the organizational structure." He visited other companies that had dumped their former organizational setup, only to undo the changes three or four years later. Operations, research and development (R&D), marketing, finance, and human resources all report directly to O'Brien. From Cave Dwellers to Farmers Spectra-Physics' quality vision continues to drive employees' zealous focus on customers, said Bill Parnell. This vision of "what we want to be:" A company where

people demonstrate ownership and take personal pride in being the best at all facets of business, especially those which

Getting closer to customers during the past several years resulted in significant cultural changes.

serve the customer. What it means, he said: • • • • • •

We predict the future. We are sought out. We know what to do. We know how to do it. We work together. We feel like winners!

Parnell described the company's remarkable transformation from "cave dweller" (incoming inspection, 100 percent final inspection) to "gatherer" (flow charts, Pareto analysis, product audit, cycle time reduction, field failure analysis, etc.), then to "hunter" (reliability testing and analysis, supplier certification, design of experiments, etc.), and finally to "farmer" (external benchmarking, customer satisfaction surveys, design for manufacturability, early supplier involvement, team-based manufacturing, etc.). As they improved and learned along the way, SpectraPhysics people became impatient for the next 57 Target Volume 9, Number 6

Update on Excellence level of improvement, he said. "We came to realize that people are our greatest strength," Parnell said, noting team involvement in hiring and other activities. Teams' Triple Threat spectra-Physics builds flexibility and customer service through three types of teams, according to AI Eckerdt, materials manager. First, New Product Introduction (NPI) teams include members from marketing, operations, and research and development. They're "fixed position" teams Eckerdt likened to baseball teams marked by defined limits of authority, independent responsibilities and common goals, and jointly-owned success. Next, QUIPs (Quality Improvement Process) teams might be compared to mountain climbing teams. Hand-picked members work their way toward goals often picked by nonteam members. They disband once the goal is reached, jointly owning the success of the project. An ISO certification QUIPs team, for example, enabled the company to focus on its successful ISO certification efforts. Third, self-directed work teams (SDWT), or team-based manufacturing groups, have these characteristics in common with a basketball team: Players have primary responsibilities but are expected to playa variety of roles, the "how to" is often picked by the team, skills overlap significantly, and success is jointly owned with the coach. Eckerdt counseled that different types of teams may work in different organizations. "Be patient. As with many things, it may take time for changes to happen," he said. Former Soaring Eagles Flying High In New Product Introduction Breaking down internal barriers and concurrently achieving "line-of-sight to the customer" might dilute new product development (NPD) efforts in traditional environments. More or less unbounded by some conventional manufacturing ways, three of Spectra-Physics' NPD gurus described how they formed a "leaderless team" program in 1991 to capture and introduce new technology more closely aligned with customer desires. Fellow "Bald Eagles" teammates in this journey (er, flight) included Matt SchIer, research and 58 Target Volume 9, Number 6

development manager; Bruce Paris, marketing manager; and Stephen Merrill, manufactUring manager. They were originally known as the "Soaring Eagles," according to SchIer, but this business of charting new territory has taken its toll on their hairlines. SchIer described the company's pre-1991 "first generation" NPD approach as one marked by increasing efforts to focus on customers, or a "line of sight view" of actual customer requirements. furl wars between R&D, marketing, and production continued to escalate unresolved issues, however. Different functional areas were measured and rewarded on different criteria (quality, volume, on-time delivery, etc.). Trust and the lack of a common focus were issues between these traditional functions. "We needed full-time players, not part-time whiners and victims," SchIer said. "We needed an all-for-one, one-for-all spirit."

"We neededan alljor-one, onejor-all spirit. " Learning from their difficulties, SpectraPhysics management launched the cross-functional Bald Eagles team of marketing, R&D, and operations as a "leaderless triad" to improve NPD's effectiveness. This team, and other "core" teams now working on NPD for specific products, are not actually leaderless, because one function will tend to dominate and then cede to another function as a product makes its way through the development-production-introduction phases. Sub-teams (service, marketing, communications, etc.) support the core teams' activities. All NPD teams now work together on activities documented in Spectra Physics' outline for new product introduction, called "PREMR." The process includes these steps, using shared language and expectations: • Market requirement review • Product concept review • Business case review • Interim development review • Final development review • Production introduction review • Business plan audit.

The team is responsible for all issues for the entire new product development process, from cost to quality and production. SchIer emphasized that involving the marketing function is important. "It's critical to get the voice of the customer, and not to lose it two or three months into the project. We can no longer blame marketing for not telling us about customer issues; we need to look in the mirror more often." SchIer acknowledged that alliances with marketing and production are not always easy for R&D people. "We had to leave our pocket protectors and calculator holsters at home when marketing started to let us out in public to meet with customers," he said. Marketing accepts the "headless horse" Bruce Paris, marketing manager, recalled that his first reaction to the "leaderless team" concept was negative. With 900 series of products, the company could not afford to rove without direction in its NPD efforts, he believed. The new approach also threatened traditional marketing in which marketing people (not representatives of other functions) talked with customers, tried new products on them, and scouted for feedback. "When we began bringing others with us, we got buy-in, and that's very important," Paris said. "We were united as a team, because we knew what product features the customer wanted, not just in the concept stage, but as we progressed further." Despite marketing's reluctant agreement to accept the "headless horse" concept, Paris reported that several benefits make it "absolutely the right approach:" R&D, production, and others involved in cross-functional teams understand what the customer really wants; production concepts were developed concurrently with design; and team participants felt empowered to serve the customer, despite their initial "loss of power." Avoiding team traps, achieving better results New teamwork ideas in NPD found early acceptance in some quarters. Steve Merrill said production people took to the idea of sharing information earlier in the process with R&D, for example. "We felt this was the road to success," he said. Getting involved at the design concept stage meant pushing DFMlA (design for manufacture and assembly), a change

Update on Excellence from the old "rip and retread" philosophy. It also depended on earlier supplier involvement; in one case, an outside vendor worked on development of a scale while Spectra's production people worked out scanner design and production processes. Cross-functional teams nicknamed "Wham-O," etc. set productivity and quality goals for their particular products,' calling in participants as needed from tooling, test and mechanical systems, etc. These team members stayed with the project until all issues were resolved where their expertise was needed. R&D, for example, offered support after the traditional "hand-off' to production. NPD teams have begun using QFD concepts to stay on track with customers more effectively.

''It's also important to be able to challenge other team members) to put it behindyou) and to go on to the next challenge. " Merrill offered several suggestions about "team traps" to avoid: Leaderless teams cannot be too large or have duplication of function, for example. Teams should be alert to undefined roles and responsibilities. Dedicated resources should be available when they are needed (engineering, etc.). "It's also important to be able to challenge other team members, to put it behind you, and to go on to the next challenge," Merrill said. Among the results reported by Merrill: better customer acceptance of new products, 25 percent reduction in NPD cycle times, 30 percent reduction in resources required for new product start-lip, and improved product owner. ship across functional lines. QUIPS Breakthrough "Our breakthrough into total quality started in 1989 when our president set up QUIPS," said Brad West, quality and reliability manager. "Before, our quality improvement was primarily directed at manufacturing." These cross-functional quality improvement teams are hand-picked by a corporate quality council (the president and executive staff) which also selects projects for the teams, plans system reviews, offers high visibility for QUIPS activities, pro-

vides resources they need, and removes organizational barriers to their progress. QUIPS activities are driven by bottom-up improvement issues as well as the top-down variety, West added. Top-down QUIPS projects range from ISO 9001 to security, forecasting and scheduling, new product introduction, R&D, TQM, etc. Bottom-up or grass roots QUIPS projects include ISO 9002, reliability, service parts process, PCB process, on-time delivery, burn-in reduction, customer commitment management, modeling techniques, etc. West said that the more informal bottom-up QUIPS are more successful than their top-down counterparts, perhaps as a result of greater organizational flexibility. They're racking up many successes; for example, tracking root causes in the on-time delivery area, and customer experience reports showed a 20 percent improvement in one years' time, based on the company's annual customer satisfaction survey. What Spectra-Physics learned about the QUIPS team process, according to West: Project selection should not be too broad - people need to buy into a specific project. Employees need to understand a direct link between the QUIPS activities, which generally are five-20 percent of an employee's workload and are a part of their top three goals for the year. Annual goals are negotiated by employees and their supervisors. Management needs to help team members "scope out" initial goals and then rethink goals when needed, West said. "We also do post-mortem reviews - where we fell down, looking at our experiences. Working with teams, it's amazing how easy it is to get off track." West predicts more QUIPS changes. "We are just becoming more effective with QUIPS," he said. "We are changing our organizational structure to support our end user - a service strategy." ISO Certification: lessons learned Joe Patterson and Kathleen Zorn of the ISO 9000 Quality Improvement Team shared their "do's and don'ts" learned from bottomsup ISO 9002 and top-down ISO 9001 QUIPS projects. Although they reported that the company successfully gained ISO 9002 certification in 1992, this "bootstrapping" approach

had some disadvantages. For example, they cited spotty education of ISO 9002 QUIPS members, the constant need to "sell" their project to others in the company as a result of a faulty communications strategy, and commitment/ownership issues surfaced ("Not everyone bought into it," Zorn said). Patterson said some QUIPS members were cooperative but they didn't all accept accountability for the project at first. What they should have done, Patterson and Zorn said, was to push for a company-wide rollout of the ISO project. People were told about the project only on a "need to know" basis. The company quality manual should have been updated using feedback from all functions, Patterson added; instead, he undertook the project on his own. "We are still paying for this," he said. The ISO 9001 registration project now under way reflects several changes from the ISO 9002 effort. In this newer, top-down effort, "everyone in the plant is marching to the same drummer," Zorn said. Top management support and communication, as well as education for QUIPS teams and core teams, aids the certification push. Registration is a 1993 goal for the company and for many managers. The result is esprit de corps for a lasting effort, Zorn said. Software Development: Team Do's and Don'ts Spectra-Physics people continue to learn from bloopers as well as successes, reported Joel Butler, a member of the QUIPS Software Quality Improvement Team. He noted that when the company missed an important commitment with a key OEM customer, management launched its QUIPS TQM effort. Although they wanted to eliminate schedule slippage problems, a critical concern was that measures consider quality and schedule, so that one would not be sacrificed for the other. Fiddling around with a "baroque-looking spider graph" for two weeks convinced the software TQM team that complex software analytical tools were time-wasters. They sought continuous improvement suggestions and ideas through process mapping, solution evaluation, interviews with customers, and a trooplevel team (people assigned to software tasks) with a QUIPS supervisor. Eventually they set59 Target Volume 9, Number 6

Update on Excellence QUIPS -

Software TQM: Defect Distribution Curve 14 - - - - - - - - - - - - - - - - - - -

12

_

10

_

8 6 4

2

o Key: Func. Spec. HL Design Code Insp. Code Testing Testing

- Defects discovered during the inspection of the functional specification - Defects discovered during the inspection of a high-level design document - Defects discovered during inspection of the "first clean compile" code (no testing) - Defects discovered during the developers' testing of code - Defects discovered by an independent software test effort

Figure 1. This chart shows the number of "bugs" detected during various phases of a software project. The horizontal axis indicates the time phases of aproject delineated by activity. It's intended to show the results of using aformal "inspection" process - finding defects earlier in software development and preventing defects from multiplying. "Without inspections, experience tells us that the discovery of defects would occur much later (jeopardizing the schedule) and that ahigher aggregate number of defects would be found," according to Joel Butler, amember of the QUIPS Software Quality Improvement Team.

tled on a total defects measure. Defining and improving software development processes, adhering to defined processes, using a defect tracking database, and counting all defects that would affect the customer's use helped them to achieve improvements. (See Figure 1.) Now many defects are found in the testing stage (avoiding most of the previously-frequent after-hours "cot and pizza" work sessions of software development people). Butler offered these do's: assign a supervisor to the QUIPS team, get management backing, provide cross-functional reviews, identify early adopters, and use a consultant for start-up. He also favored disbanding the TQM team when a particular project was completed, phasing out the TQM activities gradually ("not throwing a knife switch, like in the Frankenstein movies"), nurturing isolated successes, and managing dissent. Listen to rational dissent, he said, but avoid the trap of spending too much time on dissent ("the plant might close"). Don't use complex analysis tools or be afraid to change the team mission, he suggested. 60 Target Volume 9, Number 6

Self-Directed Team Activities, From Employees' Perspective Spectra-Physics' team-based manufacturing activities, including self-directed work teams (SDWT), began in 1989, according to Abe Kossol, manufacturing manager. In contrast to previous top-down production operations in which assemblers, supervisors, engineering, shipping, and other functions handed off responsibility for discrete operations from one to another, the team-based concept promotes shared responsibility for quality and customer service, he said. Kossol introduced Manufacturing Associates Teresa Crone, Linda Martin, and Laura Korstad who offered their perspectives on team activities. Laura Korstad, for example, described limited challenges on the job and the lack of control over the work environment for plant employees, before 1989. Poor morale and customer awareness, finger-pointing, pay inequities, and a lack of information sharing by supervisors and management were problems. Teresa Crone recounted that five people were chosen in each work area to lead the

transition to team production. Called "star points," they included some team supervisors and leads as well as other employees. Mixed reactions greeted the team manufacturing concepts during the first year. "We were threatened and worried about what was going to happen," Crone said. "We really didn't trust each other. Some were concerned that the rules were changing. "We learned that working as a team meant working together ... This was a culture shock ... It was unclear how to handle new responsibilities," she said. Customer responsiveness and flexibility were emphasized as team responsibilities. At the same, some support groups were confused. They were not used to working with anyone but the lead employee in plant work areas. Star Points and ProSkill Pay System The five "star points" for each team represented excellence in production, quality, safety, materials, and training. Employees in each of the five star point roles were expected to be trained and certified, and accept responsibility for training others, in a particular area such as safety. Certification included the requirement of training a backup star point employee for their station. Star points were to rotate positions every five months, with the potential to earn more money as they progressed in skill development. The ProSkills (Promote Skills) compensation program allowed employees to be paid according to their skill and team experience levels,

Figure 2. Kathleen Zorn of the ISO Quality Improvement Team explained quality systems during the plant tour.

Update on Excellence

Activities during this review period:

c::::::::J c::::::::J c::::::::J c::::::::J c::::::::J

EXPECTATIONS

Comments:

Star Point-> Special Projects -> Multiple Process Areas -> Special Recognition -> Other->

(I ndividualfTeam) Meets criteria as defined

NR

o

2

(Team/Process) Consistently adds value to criteria as defined

3

4

5

6

(Process/Site) Acts in a leadership role regarding the established criteria

7

8

Supervisor Rating

9

QUALlTY-

o

Extent which all assignments are accurate, thorough, and meet customer expectations. Focus is on contributions, manufacturing related roles/activities, and special projects.

JOB KNOWLEDGEMastering new skills while retaining and demonstrating acquired knowledge to meet the needs of the business. Understanding how to do atask and why it's done the way it is.

o

SELF MANAGEMENT-

o

Efficiently allocates their time, sets priorities, meets commitments, and interacts effectively with others. Displays good judgment in the performance of assignments.

SUPV INPUT PEER INPUT

CUSTOMER SATISFACTION Delivery of quality product through the awareness of customer expectations. Focus on actual production processes.

i volved

i roves

ctive

uilder

ader

i itiator

TEAM WORKActive/participate in all team activities. Supports group decisions. Positive outiook.

TEAM GOALSContributes to setting and achieving formal goals by the team.

ADAPTABILITY Personally contributes to a productive work environment. Accepts changes positively. Flexible and versatile.

ositive

nthusi tic

otivato

self

team

ompan

COMMITMENT Performs all tasks in aconsistent and timely manner.

CONFLICT RESOLUTION Communicates tactfully and sensitively. Addresses issues by focusing on the situation, not the individual.

cepts

romote

INITIATIVE Introduces or identifies process improvement. Self-motivated. Takes responsibility. Assumes leadership and willingly helps others when needed. Special projects. RATING SCALE Supervisor Rating

o o o

x x x

Total 0.25 0.13 0.12

0.000 0.000 0.000

o AnGREATLY EXCEEDED EXPECTATIONS employee has demonslraled exceptional know-

0.00 0.00 0.00

Peer Input

+ ERR + ERR + ERR

ERR ERR ERR

x x x

Behavioral Skills Supvlnput

0.00 0.00 0.00 0.00

ERR ERR ERR ERR

OVERALL SCORE

x x x x

0.05 0.05 0.05 0.05

ERR ERR ERR ERR

ERR

0.00 0.00 0.00 0.00 0.00 0.00

ERR 1.00 ERR ERR 1.00 ERR

0.00 0.00 0.00

ERR 1.00 ERR

0.00 0.00 0.00

ERR 1.00 ERR

0.00 0.00 0.00

ERR 1.00 ERR

0.00 0.00 0.00

ERR 1.00 ERR

SUPERVISOR COMMENTS

EXCEEDS EXPECTATIONS An employee has exceeded required knowledge, skill, and results in practically all aspects 01 the job.

D FULLY MET EXPECTATIONS

An employee has demonstrated required knowledge, skill, and results in all aspects of the job.

TEAM GOALS FOR NEXT REVIEW PERIOD

o AnMINIMALLY MET EXPECTATIONS employee has demonstrated marginal

knowledge, skill, and results in some aspect(s) of the job.

Peer Input

+ + + +

efines

ERR 1.00 ERR

ledge, skill, and resulls in all aspects of the job.

D

Team Skills Supvlnput

r sponsib e

aches

0.00 0.00 0.00

D

UNSATISFACTORY An employee has not demonstrated the required knowiedge, skill, or results associated with the job.

EMPLOYEE COMMENTS

Did attendance adversely effect the outcome of this review? No_ _ Yes _ _ % absent _ _ Ratings ot "0" in any catagory requires acomment. Peer comments: EMPLOYEE SIGNATURE

DATE

SUPERVISOR SIGNATURE

DATE

DEPARTMENT MANAGER SIGNATURE

DATE

HUMAN RESOURCES

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