Path: bloom-picayune.mit.edu!snorkelwacker.mit.edu!news.media.mit.edu!americast.com!usa-post Newsgroups: usa-today.bonus From: usa-post@AmeriCast.Com Organization: American Cybercasting Approved: usa-post@AmeriCast.com Subject: bonus Fri, Apr 10 1992 Date: Fri, 10 Apr 92 05:43:42 EDT Message-ID: 04-10 0000 BONUS: Gary Works wins Quality Cup USA TODAY Update April 10-12, 1992 Source: USA TODAY:Gannett National Information Network The situation was as bleak in Gary, Ind., as a foggy afternoon on nearby Lake Michigan. U.S. Steel's Gary Works was all but banished from General Motors supplier rolls. Ford Motor was threatening the same. "Find a new way of doing your business," was the blunt mandate from Ford's Pete Urchek in a 1987 ultimatum to Gary Works. HOW BAD WERE THINGS AT GARY WORKS? Not only was the steel bad, it arrived late. "And they told us we were arrogant," recalls Robert Pheanis, a manager. Gary Works - the biggest mill in the biggest steel company - was alienating customers and roiling with labor problems. It also was losing more than $100 million a year. The heart of Big Steel was about to stop beating. WHO CAME TO THE RESCUE? Revival came from a small team of gritty union hardhats in the dreary 6-mile-long steel mill. Plant manager John Goodwin - operating outside U.S. Steel's corporate culture, if not quite breaking its rules - had improved other plants by unleashing hourly workers. Why not here? First one, then another - eventually five - steelworkers were freed from mill jobs to visit automotive customers' plants and see problems for themselves. WHAT DID THE MANAGERS DO? Goodwin and other managers stayed on the sidelines. The union crew was generally free to change how steel was made, stored and shipped so that the 50-ton rolls and quarter-ton sheets arrived at customers' plants in better shape. They demanded rubber pads on flatbed trucks to cushion the steel. They created plastic rings to protect the rolls from crane damage. They persuaded workers who package and load each roll or stack to take responsibility for its condition by signing a tag attached to the shipment. DID THE PLAN WORK? The result: Automotive customers - who buy almost half of Gary Works' steel - now reject just 0.6%, down from an industry-worst 2.6% in 1987. "When you hear right from the customers that you made a difference, that's the deal," says Jeff Grunden, coordinator and pioneer member of the quality team. Gary Works' trip from unwanted to almost indispensable won its problem-solving team the RIT:USA TODAY Quality Cup for manufacturing. WHAT DID THE JUDGES SAY? "I can't tell you how excited I am," says Quality Cup judge Thomas Johnson, quality-management professor at Portland State University's business school. "It's Gary, Ind. It's U.S. Steel. It's not Nagoya, Japan. These are typical steelworkers, union guys -not Japanese gurus." It's important to keep the victory in perspective. Big Steel lost $2.5 billion last year, second only to a record loss of $4.1 billion in 1986. U.S. Steel's portion of the red ink: $507 million last year. HOW DOES THE FIRM FARE COMPARED TO THE INDUSTRY? The market is tough enough this year that steelmakers haven't enforced a 3% price hike planned for April 1. They also lost a hedge against foreign steel when import restraints expired last week. Gary Works - which accounts for 60% of U.S. Steel's shipments - "is a bright spot in a dim industry," says Quality Cup judge Mark Gavoor, quality trainer at Colgate-Palmolive. HAVE WORKERS BEEN LAID OFF? Still, Gary Works' solutions cost no jobs and, until recently, not much money. Last year, parent U.S. Steel paid the plant a high compliment: $100 million to rebuild a blast furnace that turns iron ore into molten steel and $250 million to improve the casters that form hot steel into slabs. HOW DOES THE SYSTEM WORK? The team notion has been successful enough that the plant has expanded it. In addition to the five union workers who call on automotive customers, Gary Works' team now includes three union workers who visit non-automotive customers. The eight team members meet with Goodwin and other managers Mondays. Each spends the rest of the week at customers' plants helping resolve problems. ARE THERE HASSLES? "A lot of times, we can just call a manager at the (Gary) plant from the road, tell him what the problem is and it gets fixed right away. There's no form to fill out or big deal to go through," says Grunden. "Other times it's more complicated, but everybody you need is there in that Monday meeting. Things get fixed pretty fast." Says Johnson: "The average guy working in most American companies today is a hell of a lot smarter than top management is willing to give him credit for." HOW MUCH POWER DO WORKERS HAVE? Putting solutions into the hands of the workers amounts to "replacing the layers of middle management the way we're always talking about in heady, academic terms," Johnson says. "These fellows are virtually in charge. They're really doing it." Gary Works' quality-improvement program differs from many because it was created from, and continues to be built on, the experience and intuition of hourly workers battling to save their plant, their jobs, their way of life. It did not flow from force-fed quality-improvement classes or textbooks. HAS THE PLANT IMPROVED? In the best tradition of statistical process control, computers measure every variation and tolerance at the plant so workers know when something is too hot, too thick or too slow and where the problem is. Ford, which nearly flunked the plant in 1987, last year gave it the Q1 award as a high-quality supplier. "I'm amazed at what these guys have done. It's a breakthrough," says Ron Wallace, manager of Ford's nearby Chicago Heights plant. WHAT DO CUSTOMERS THINK? The team members are so effective and so well-accepted by customers that they are members of the customers' employee-involvement teams. Gary Works' Jim Putz, for instance, helped GM head off paint and denting problems by questioning how mirrors were mounted on GM's Chevrolet Camaro and Pontiac Firebird. As a result, GM reinforced the doors at the spot where the mirrors are bolted. That intertwining between customer and supplier apes the keiretsu system that has helped Japanese firms cut costs and speed development time. Bonus Editor: Ed Kelleher. (1-919-855-3491) Making copies of USA TODAY Update (Copyright, 1992) for further distribution violates federal law. This article is copyright 1992 Gannett News Service. Redistribution to other sites is not permitted except by arrangement with American Cybercasting Corporation. For more information, send-email to usa@AmeriCast.COM