Cooperation Forges a Success Story : Goulds Plant Imitates Japanese Method to Pump Up Its Output

The chunk of metal shrieked and smoldered as machinist Jose Cordon whittled it down to a finished part with skills honed by 16 years of experience.

His bosses wanted to tap that expertise as they applied the latest management methods to turn around the troubled Goulds Pumps plant in City of Industry.

But Cordon wondered, along with many others, how long this latest fad would last. “I didn’t think it would work,” he said.

Cordon and many of his peers have become believers after seeing significant improvements at the sprawling plant since Goulds adopted “total-quality management,” the much-talked-about process credited with turning Japanese firms into world leaders.

Once threatened with closure, the plant has posted dramatic increases in on-time delivery, worker productivity, morale and--most importantly--profit. It is a rare example of concrete success for a movement that sometimes seems more talk than action.

Adhering to total-quality principles required much more than building defect-free pumps. It meant that the 200 plant employees had to scrap the traditional methods and management-labor roles that have dominated American factories.

The change has not always been easy for Goulds’ workers. And much more is in store.

“I had to give up my ego . . . and understand how to share decision-making,” said Kevin Harris, the plant’s fabrication manager. “You go down and ask people, ‘We got a problem. What do you think?’ ”

Under total-quality management--a concept pioneered in America but most widely accepted in Japan--all of a company’s employees, methods and policies are geared toward continual improvement of products and performance as a way to prevent defects and reduce costs.

Under traditional U.S. methods, by contrast, quality is often delegated to inspectors who try to weed out defective products after they have been produced.

Despite concerns that Japanese methods are not well-suited to American workplaces, growing numbers of U.S. firms have become quality converts over the past decade.

Still, nearly 60% of manufacturing executives say quality standards of U.S. firms fall below those of the Japanese, according to a survey conducted by Grant Thorton, a Chicago-based management consulting firm.

Japanese and German competitors were major concerns for Goulds Pumps, based in Seneca Falls, N.Y., as it plotted an overseas expansion three years ago. The firm was also struggling to boost customer service and shrink delivery times to compete with domestic firms. Total quality seemed to be a solution.

“To win in the global war, we have to meet the global competition,” said Goulds President Steve Ardia, who required all 4,000 employees to attend quality seminars.

But it seemed that even a commitment to quality could not save the money-losing City of Industry plant. Notorious for late deliveries, the plant had trouble persuading Goulds’ salespeople to pitch its pumps, which are used in everything from sewage plants to North Sea oil rigs. One month, only 8% of orders were delivered on time.

“There wasn’t a Goulds salesman out there happy with our delivery, and there certainly wasn’t a customer happy with us,” said Rick Wensits, production scheduling manager.

Then, in April, 1989, Ardia told managers that the plant would be shut down within a year if they failed to make significant improvements. Managers were given wide leeway and extensive training and were encouraged to use a variety of total-quality management tools--from employee empowerment to team work--to try to save the plant.

Glen McClure, who oversees most factory-floor operations, decided to let teams of workers identify major problems and offer solutions. In the overworked machine shop--where machinists hid mistakes for fear of being scolded--Jose Cordon became a member of Manufacturing Improvement Team 2.

After two meetings, the team ranked a worn-out lathe as the shop’s major problem. Shop supervisor Ruben Garcia agreed and, without going through a bureaucratic maze, ordered the $2,500 part needed to repair the lathe.

Since the machine was fixed 13 months ago--and further changes were made--the machine shop has boosted productivity and reduced defects. Meanwhile, new schedules help prevent overloading the shop floor. And workers are encouraged to admit mistakes.

These and countless other changes have led to dramatic results.

The plant has broken company records by delivering all its orders on time during the first three months of this year. Annual expenses have been cut by $1 million, sales have increased 30% in the past two years, and the plant reported record profit--$4.9 million last year.

“We are not perfect,” division General Manager Charles M. Nelson said. “But we are competing on quality levels and performance levels with some of this foreign competition.”

Still, the plant--and Goulds--have a long way to go. Total-quality methods have yet to be applied to more complex problems, such as developing new products.

SHORTFALL IN U.S. MANUFACTURING QUALITY A survey of 250 top manufacturing executives found that American companies were making progress improving the quality of their products but that U.S. goods still come up short against world competition. In general would you say the quality standards of most American manufacturers are higher than, or equal to their Japanese competitors?Lower than: 58% Equal to: 31% Don’t know: 4% Higher than: 7% Thinking of U.S. industry in general, would you say that manufacturers’ quality standards over the past three years have improved slightly, improved greatly, stayed the same or decreased? Improved slightly: 50% Improved greatly: 40% Decreased: 3% Stayed the same: 7%