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    Canbidge corporation: EQ program for CERG department

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    You have been promoted to senior analyst in the Distribution Engineering, Maintenance, and Productions Management group of the Central Engineering Department of the Canbide Corporation, near Torrance, CA. At this location is a facility for the electronics business. Based upon your previous successes in the electronics division, you will now spend most of your time with the chemical plants.

    The Canbide Corporation is a U.S.-based, multi-national, publicly traded, manufacturing company with annual sales nearing $10 billion. Canbide is one of the pioneers of the petrochemical industry and is the acknowledged technology leader in several market sectors, and benefits from large licensing royalty checks for those technologies. Canbide is the low cost producer for a number of commodity products. Canbide's current marketing approach is based on providing a wide selection of products from a single location, more than any of their competitors.

    In a suburb of Tulsa, OK, Canbide operates a facility for the Chemical Business Group, which contains the Divisional Research and Engineering Department (DRE), the experts on the specific reactions and equipment associated with that division's production processes, and the Central Central Engineering and Research Department (CERG), experts in specific subjects that cross divisional boundaries. The employees in CERG generally work as internal consultants for the divisional research and engineering groups and often work on plant level issues.

    Mr. Villani, president of the Chemicals Business Group, is pressing his divisional VPs to solve several problems. There is internal pressure for a new distribution facility in the Midwest. There continue to be quality problems at a facility near Toledo, OH that serves the automotive market in Michigan. There are customer service problems at most of the distribution locations, but especially at a facility near Denver, CO. There are inventory and materials handling problems at the production facility near Huntsville, AL.

    Your supervisor has alerted you to three important projects for the coming year.

    Product Quality and Distribution Problems at the Denver facility: This facility has experienced slow physical growth since its beginning in the 1930s. Over the years, new production units (measuring 2 km x 1 km) have been added on the periphery of the facility, in a widely scattered manner. Unfortunately, your previous recommendations regarding customer service have not yet been implemented due to budgetary constraints; customers desiring to pickup multiple products must now drive from point to point within the plant to pick up each product. There are often waiting lines at each loading point. This is causing gridlock within the facility caused by the arrival pattern of trucks picking up products. In addition, there are product quality problems, primarily due to new rules that the automotive industry (ISO 9000) is imposing on all of their suppliers.

    New Distribution Facility in the Northeast: For years, long before you joined Canbide, the Divisional Sales and Marketing Departments have clamored for a new distribution facility located near New York to serve many customers throughout the Northeast. Previous studies have always indicated that the benefits of a New York location are outweighed by the costs. In spite of this, you are being asked to take another look.

    A Quality Program for CERG: With the increasing prevalence of ISO 9000 programs, Canbide has initiated a corporate wide Excellence through Quality (EQ) program. Most of the plants and operational locations have already launched their EQ programs. Now, Mr. Harkins, the VP of Central Engineering and Research Group (CERG), has picked you to help develop and implement the EQ program for his corporate level engineering and R&D groups.


    The VP of Central Engineering and Research Group (CERG) has tasked you to provide an outline draft of the key strategies for the EQ program for the Central Engineering and Research Department. Explain your rationale for making these strategy recommendations.

    It is my understanding that my position (from reading the scenario) is like an internal auditor for the organization which has been assigned to assist formulation of an outline draft of key of the Central Engineering and Research Department at this time - but will also assist with the headquarters and all areas of the organizations. Thus any assistance would be greatly appreciated in this area. As I am extremely hazy on this task.

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    Solution Preview

    Strategy Recommendations for the EQ program at Central Engineering and Research Group:

    In order to develop a EQ program, the first recommendation to the CERG group is to hire a qualified and experienced Quality manager who can oversee the whole program successfully and effectively. The desired person will have extensive knowledge of six sigma principles and total quality management principles. Secondly, before developing the EQ program, it is very necessary to assess the current reality and status of the organization with respect to current practices, quality principles and control mechanisms in place and existing problems, bottlenecks and quality issues.

    The first step in developing a sound EQ program is to clarify the aim (vision/mission), develop a clear definition of the customer base, and develop awareness, across the organization, of excellence through quality and how such a focus benefits everyone. It is very necessary for the CERG group to define the precise goal of the EQ program and the key areas which needs to be improved so that the program can take a direction. Further, it is imperative that all the employees in the division should be communicated about this process and any concerns and grievances should be immediately answered and rectified so that there is no resistance in the future. A good way to overcome the concerns is to make them aware of the benefits and importance of the quality program.

    Once the goals have been decided and customers have been identified, the second phase involves implementing changes in some key areas to demonstrate that a solid approach to excellence through quality is in place. Phase two focuses, among other things, on business planning, developing and communicating improvement priorities (with ...

    Solution Summary

    Canbidge corporation: EQ program for CERG department