ICQI2000

Pakistans Sixth International Convention on Quality Improvement November 14-15, 2000, at Lahore

Employee Participation and Kaizen Activities in Packages Limited

MUHAMMAD ATHER AYUB KHAN QUALITY & ENVIRONMENT SYSTEMS MANAGER AYESHA AZIZ QUALITY & ENVIRONMENT SYSTEMS ENGINEER PACKAGES LIMITED P.O. AMER SIDHU SHAHRAH-E-ROOMI LAHORE - PAKISTAN

EMPLOYEE PARTICIPATION ACTIVITIES AT PACKAGES LIMITED

by
Muhammad Ather Ayub Khan Quality & Environment Systems Manager Ayesha Aziz Quality & Environment Systems Engineer

Packages Limited PACKAGES LIMITED, A BRIEF INTRODUCTION

Packages Limited was established in 1957 as a joint venture between the Ali group of Pakistan and Akerlund & Rausing of Sweden. Over the years, the Company continued to enhance its facilities to meet the growing demand of packaging products. Additional capital was raised from sponsors, International Finance Corporation and from the public in 1965. As a first step, Packages commissioned its own paper mill in 1968 having production capacity of 24,000 tonnes of paper & paper board based on waste paper and agricultural waste i.e. wheat straw and kahi grass. As the demand continued to grow, it led the Company to expand and by the middle of 1996 its annual capacity was increased to 65,000 tonnes of paper & paperboard and corresponding converting ability. Since 1982, Packages Limited has a joint venture in Tetra Pak Pakistan Limited with Tetra Pak International to manufacture paper for liquid food packaging and to sell Tetra Pak packaging equipment. In 1993, a joint venture agreement was signed with Mitsubishi Corporation of Japan for the manufacture of polypropylene films at the Industrial Estate in Hattar, NWFP. This project, Tri-pack Films Limited, commenced production in June 1995 with equity participation by Packages Limited, Mitsubishi Corporation, Altawfeek Company for Investment Funds, Saudi Arabia and General Public. In July 1994, Coates Lorilleux Pakistan Limited, in which Packages Limited has 55% ownership, commenced production and sale of printing inks. Packages has completed the process of implementing a Rs.2.7 billion balancing, modernization, replacement and expansion programme in 1997. The programme is in line with the Companys strategy of minimizing capacity constraints on existing equipment, improving quality to meet local and foreign competition and improving its environmental protection facilities

Packages has two functions, firstly it should ensure that consumer receives goods in as perfect a condition as possible i.e. by reducing spoilage, preventing damage during transportation and minimizing chances of adulteration. Secondly, surface of the package should act as a salesman. In Packages, 95% of the total paper & board used is produced in its own Paper Mill. Main raw materials used are wheat straw, river grasses and waste paper, which are all available locally. Corrugated cartons for shipping consumer products from the manufacturer to retail outlets, are also produced by us. Standard products like paper cups for ice cream & soft drinks, tissue paper both facial & toilet, paper napkins etc. are also manufactured and marketed under the brand name of Rose Petal.

PACKAGES A FAMILY
Packages hires people fresh from schools, colleges and university who form the culture of the company in the long run. 99 percent of the people working here have this as their first job. These fresh people are trained accordingly and as a result our companys culture gives the feeling of a family. Training and Development Policy of Packages Limited The objective of this policy is: 1. To identify the training and development needs of the companys employees 2. To arrange for the right training for the right employee thus ensuring maximum benefit from the training 3. To ensure continuous learning through focus on the job training and development 4. To maintain proper records and accounts for the training imparted 5. To conduct post training evaluation where relevant Whats the companys mission behind training and development? The mission of all training and development at Packages Limited is not only to inform, but also to transform the concerned employee thus resulting in a more motivated and therefore more productive employee who ensures that the company produces quality products and the customers are delighted. Training Procedure The training procedure starts with the identification of training and development needs which is done collectively by the concerned employee and his/her manager. This is done once every year, normally at the beginning of the year. Based upon this, the HRD manager devises training plan for executives which incorporates as much as possible the needs of the individual executives as identified earlier. The executives are then nominated for training programs and are provided the relevant training.

Employee Participation during ISO9000 implementation program: The ISO9000 activities started somewhere around 1994 in Packages, from the Flexible Packaging Department. Activities involving participation from employees started right away with the training and awareness program for ISO9000, which include: Training sessions on ISO9000 Assigning specific tasks such as writing various procedures and work instructions Providing training for using Statistical Quality Control Techniques and implementing them Employee participation after ISO9000 implementation: Such activities continue even after the implementation of ISO9001 and they include: Investigation of customer complaints Internal auditing Retraining on ISO 9000

UNDERSTANDING OF WORKERS POWER

In a study at Nissan Motors, Murayana Plant, it was found that as a group, the superintendents were aware of 7% of the problems, while the foremen recognized 79%. The manager knew only 4%. What was interesting was that none of these people solved the problems; it was the first line workers who developed the solution. This explains how well the first line workers are potentially capable and trainable. It is true; employee participation makes a great difference in the long run to improve the overall management performance.

THE KAIZEN CONCEPT

KAIZEN is a Japanese word meaning change for the better or continuous improvement. It is selection of better means or a change of current method for achieving an objective. In other words we can say that KAIZEN is an accumulation of small changes. Today, many people know the word, and some of them can go even further to quote some technical terms to explain what it is. However, those who believe they know KAIZEN, are still incapable of successful implementation. You cannot be confident of KAIZEN unless you have had the experience of an implementation, because KAIZEN is not a deductive theory, but an inductive action-based way of thinking. In some companies, improvement activities lose its initial momentum and excitement, and they die away. This is not KAIZEN. They only look for a quick fix by their professional people (i.e. management, engineers etc.), without involving the people who are working and involved with the issues at hand. One cannot expect to obtain the solution to an issue that they know nothing about.

Kaizen is a Management System Well Matched with Time Traditionally, employees, in particular first line workers, are not expected to participate in improvement activities because of the strictly defined job demarcation; the lines drawn between different jobs. Employees are forbidden to cross the lines to work as a team. Today, people are more educated and potentially capable of doing a variety of things than before. Any employee is consciously interested in getting involved in more varied ranges of jobs (job-enlargement) and in more specialized professional fields (job-enrichment), so that the employee will feel satisfied at work. EMPOWERMENT In the conventional management system, workers and employees are to work exactly as they are instructed in narrowly restricted job areas. Strict inspection and supervision are necessary to ensure the conformance to all standards. Employees are not expected to go beyond the job description and to improve their job. They are prohibited to do so. Worse than that, they are not trained at all. In order to destroy the conventional management system, there are at least two things that management should keep in mind. First is to empower the employees: giving maximum delegation of power to workers so that they can participate in problem-solving activities. Second, is to show them how to identify and solve problems. MANAGEMENT COMMITMENT Management should make themselves visible on the shop floor, so that people can see their management is actually committed to supporting the KAIZEN process. It is management, not employees that change the corporate culture in the first place. OWNERSHIP The work place is not considered to be a pleasant place by many people. Ownership plays an important role to make employees feel their work place comfortable. As many behavioral science experiments explain, the more pleasant and comfortable the workplace is, the higher the productivity the employees give. RECOGNITION Recognition is one of the most powerful mental impetus to make people move forward. People want to be recognized by people. Prizes, plaques, certificates, ceremonies, and newsletters are designed and used by management in many companies to recognize people for their outstanding efforts and contributions. There are usually two types of recognition: money (reward) and personal recognition (award). Usually, the latter has a more long lasting effect. Here is something to think about; what is the manager responsible for, and why is he employed, for his specialized knowledge or skills? One of the most important requirements for managers is the ability to let people work, not make people work, on a continuous basis. People are prone to getting tired of the same type of stimuli, so management should change and improve the ways of recognition on an ongoing basis.

THE CONCEPT OF UPSTREAM AND DOWNSTREAM IN A COMPANY

It is very important to understand the concept of upstream and downstream in a company, as the upstream line or the production/raw material supplier transfers good or bad quality product onwards. The upstream should be held most responsible for the product quality, because if there is a problem in the product quality from the upstream it has a possibility to be transferred through the conversion and stores, which is the middle stream, to the customers, which is the downstream. The following flow diagram will explain the concept clearly. Figure 1 Upstream Middle Stream Down Stream

Production

Conversion

Stores

Sales

QC CIRCLES OR QUALITY IMPROVEMENT TEAMS

QC Circles are small groups consisting of first line employees who continually control and improve the quality of their work, products and services. These small groups operate autonomously, utilize quality control concepts and techniques and other improvement tools, tap members creativity and promote self and mutual development. QC Circle activities aim to develop members capabilities and approach selfactualization, make the work place more pleasant, vital and satisfying, improve customer satisfaction and contribute to society. Executives and managers ensure that QC Circle activities contribute to improving the health of the enterprise by treating QC Circle activities as an important part of employee development and workplace vitalization, personally practicing company wide improvement activities such as TQM and providing guidance and support or total participation while respecting the humanity of all employees. Basic principles of QC circle activities Fully reveal human capabilities and eventually draw out infinite possibilities Respect humanity and build a pleasant, vital and satisfying workplace Contribute to the improvement and development of the enterprise

KAIZEN / EMPOWERMENT ACTIVITIES IN PACKAGES

KAIZEN activities started here in Packages in 1996. Brainstorming with concerned personnel and department heads resulted in the formation of its first quality improvement team named Al-Badr, in August 1999. Till date, more than a hundred members in 14 teams have been involved in improving their performance and job

environments. A team of facilitators led by the Quality and Environment Systems Engineer supports the teams. Out of 14, five teams are formed in Carton Line, three in our Tissue Manufacture Division, two in Flexible Line, two in Consumer Products Division (CPD) and one team in Corrugated Cartons Division. Each team holds its own weekly meeting in one of our boardrooms, and library if required, and decides on the action plan for the week, discusses the problems faced by the team on the floor and suggests solutions. Our team of facilitators is always there to provide guidance and help when and where they require. Hurdles and Obstacles Even though KAIZEN is basically fairly simple to practice, there were a number of obstacles to be overcome before the method could be implemented. It was a completely new approach for all of us. Although it might seem very simple now, but when we started, it was not so easy. The most difficult part was to convince people to change. No one wants to change himself/herself. Everyone had vague ideas about KAIZEN; most people thought that they would lose their control over their subordinates, because KAIZEN empowers the employees. Some people thought it to be extra workload on their subordinates and that these people might not be able to perform their regular duties as well as they used to do. Some people thought that this new concept might mislead the workers into thinking that they know everything and no one else knows it better. As a step further, our General Manager, Mr. Rafi Iqbal Ahmed, arranged for the production managers of all divisions at Packages to visit the Hasanabdal factory of KSB pumps, where this system is already in operation, to observe how they function with teams there, and then implement it here in Packages. We are extremely thankful to their Technical Director, Mr. Pervaiz Iqbal Mughal for his help and cooperation with us on this visit. We still keep in touch with them in this regard. We had to go through stressful meetings with department heads in some areas just to convince them to form teams. There was a time when it seemed like mission impossible, people told us to quit the idea of Quality Improvement Teams. It was our quality objective for almost three years, and it didnt seem to work out. This was the FORMING stage. When the teams were formed, the most difficult part of the journey began convincing the team members and motivating them to do it. They were not ready for it; they were frustrated with the thought of having an extra duty to perform along with what they were doing for so many years. They had to take time out of their schedules to attend the team meetings; they had to read what they were taught in the training sessions. Usually the first line workers are not encouraged to use their own mind to solve every day problems at the work place, they are used to following instructions from the in charge. It was very difficult to make them think on their own and develop the habit of not looking up to someone for every little thing, and at the same time not forgetting that their superiors are there to guide them, but when the problem is out of their own scope. The

team members had to start from scratch, they had to learn how to organize meetings, discuss problems in a constructive manner, prepare checklists and analyze the data collected over time. Initially people were disinterested, irregular and angry with us for increasing their workload. This was the STORMING stage of these teams. After a few meetings, they began realizing that this was not extra work, but exactly in line with what they are already doing and in a much better way than ever before. They appreciated the training being given to them and applied all the tools on their work. The attendance of the meetings improved and the general attitude towards this concept improved as well. This was the NORMING stage of the teams. These teams were given training on the tools of Statistical Quality Control by their facilitators. A seven-step module for problem solving was taught to these teams before they started working. The seven steps of the module are: Theme selection Collection and analysis of data Identification of root cause of the problem Finding and implementation of the solution Confirmation of results Standardization of the solution Reflect on the process After this training session, these teams are required to fill out an implementation/activity plan, roughly giving an estimate of the time required for completing each step in weeks. Normally it should be about 12 to 24 weeks (3 to 6 months). Only then these teams are registered as Quality Improvement Teams. Over the period of eleven months the teams have shown tremendous improvement in the workplace atmosphere and the work methods. Our teams have put up their placards on their machines showing their themes and their progress. It is a very encouraging sight to see these people working together with a totally different attitude towards workplace problems. The KAIZEN philosophy should not be judged only by short-term results. The idea of continuous improvement should take root and become part of the general attitude towards work. To bring these activities in the spotlight, the first Quality Improvement Teams Conference was held in March 2000, in which all the teams gave their presentations to the management. This was the PERFORMING stage. It was the first time ever, that the first line employees gave presentations of their work to the higher management. Our first Quality Improvement Teams Conference boosted the morale of the teams and encouraged other people to form this type of teams. People started coming to us on their own initiative and offered to make new teams. THE PATH TO SUCCESS Although only one of the teams have yet completed seven steps, but all the others are heading in the right direction. One group in CPD has completed their project. The theme of this team was to control the waste of their machine. To solve this problem they segregated and collected all the waste in different boxes. At the end of the shift they weighed that waste and recorded the data in a check sheet. After two months they

analyzed the data using a Pareto chart, showing the main cause of waste. They held a meeting with the concerned people and devised a solution for the problem. The current data from this particular department shows that they have reduced their waste percentage from 5.58 to 1.34, which is a remarkable difference. This team has been able to save Rs. 196748 and they are expected to save Rs. 590244 annually. Similarly some of the other teams have been able to project cumulative savings for a year amounting to Rs. 10,568,617. The costing department and the department heads verify these projections; therefore, these are realistic figures. Although, we have decided to monitor these figures for at least one year and then decide upon their validity. Table 1 shows the details of the projections made by seven of the teams. The rest of the teams are still in the process of calculating their projections, therefore, the data is not available right now. Table 1: Projected savings by Quality Improvement Teams at Packages Limited Team Commando Fighter Inquilab Progressive Challenger Shaheen Al-Badr Hamza Total Theme Reduce Steam Consumption Reduce Water Consumption Reduce Waste Reduce Downtime Reduce Paper Breakage Segregation of waste sheets Segregation of waste sheets
Improvement in water base quality

Achieved Savings 575,400 18,200 196,748 682,722 0 294,000 294,000 418,000 2,479,070

Projected Savings for one year 1,380,960 43,680 590,244 1,638,533 2,400,000 504,000 500,000 3,511,200 10,568,617

A very interesting point here is that the level of education in most members of these teams is of high school only, aged approximately from 19 to 55, and all of them are first line workers. Lack of high education was not a hurdle in the path of continuous improvement here. What we learned here is that proper training, encouragement and support from us as the management, could bring out the best in these people of different kinds, improving their relationships mutually and with the workplace, which has created a big difference in the workplace environment. The current status of our 14 Quality Improvement Teams is given in Table 2. Table 2: Current Status of Quality Improvement Teams at Packages Limited Sr# 1 2 3 Team Al-Badr Shaheen Hamza Formed on 28/8/99 28/9/99 12/2/2000 Meetings 42 38 21 Stage Step # 5 Confirm the Results Step # 4 Plan and Implement Solution Step # 4

4 5 6 7 8 9 10 11 12 13 14

Tipu UNIQUE Performers Youth Progressive Inquilab Commando Fighter Star Challenger Al-Jahad

18/2/2000 9/6/2000 23/11/99 26/11/99 19/1/2000 26/10/99 24/11/99 10/11/99 3/11/ 99 8/6/2000 30/6/2000

15 3 30 31 24 27 9 9 10 6 3

Plan and Implement Solution Step # 3 Identification of Root Cause Step #2 Data Collection Step # 4 Plan and Implement Solution Step # 6 Standardize the Solution Step #6 Standardize the Solution Step # 7 Reflect on the Process Step # 6 Standardize the Solution Step # 6 Standardize the Solution Step # 4 Plan and Implement Solution Step # 2 Data Collection Step # 2 Data Collection

On our way towards the path of continuous improvement, we were able to invite a Japanese expert on Quality Improvement Teams from APO to help us with our work, make suggestions for improvement, and train our facilitators. During his stay with us for two weeks, he worked with us on the floor and with the teams. As a result of the team activities in full boom, our 2nd Quality Improvement Teams Conference was held on June 21st 2000, in which the teams that have been able to show considerable improvement in their projects gave their presentations. At the end, all the teams were given certificates of participation and the group that has completed the seven steps was presented with t he award for best team performance. After the success of our previous two events, we are planning to hold this conference twice every year. The abilities and potential in the first line workers should not be underestimated and they should be given full support to create positive changes in the organization. After all, growth of the employees is the growth of the company in the long run. It is very important that the entire management should stand behind the idea and allow the team members the necessary scope for their activities. This makes it easier to implement the method when the employees can see that the Boss is backing this wholeheartedly. REFERENCES: Yoshida, Shuichi. KAIZEN thinking and KAIZEN Technology The Team Handbook Tanigawa, Koji. The basic idea of QC Circle activities and their promotion