The Workers Know Best

Boosting productivity and morale with IMP Sand VIPS

Like the jowls of an aging Hollywood star, U.S. productivity is sagging, and the blame has been placed on everything from Government regulation to declines in business investment. But experts increasingly believe a primary reason is that remote corporate bureaucracies have isolated workers from all decision making, turning many of them into uncaring automatons.

To change that, more and more U.S. companies are returning the responsibility for solving factory floor problems to the factory floor itself. On the premise that the workers often know best, the firms are forming "quality circles." These are groups of five to 13 employees who volunteer to gather for perhaps an hour each week, on company time, in brainstorming sessions that focus on what can be done to improve output per hour worked. Supervisors lead the discussions and help put the recommendations into practice. The result: bonuses and more job satisfaction for workers plus higher profits and productivity for firms.

The idea is hardly new. The Japanese developed circles after World War II, borrowing ideas from U.S. business theorists, and such groups are considered to be an important contribution to Japan's productivity. Among the U.S. corporations now using quality circles are General Motors, Ford, American Airlines, 3M and Martin Marietta. One of the most enthusiastic, Westinghouse, is expanding the use of circles after experimenting with the idea for 16 months at its Defense and Electronic Systems Center near Baltimore. Notes Executive Vice President George Beck: "This is one of those rare programs that benefit everyone."

The Baltimore workers have christened their circles with such acronyms as VIPS (Volunteers Interested in Perfection), IMPS (Improved Methods and Products Seekers) and TOPS (Turned Onto Productivity and Savings). By any name, they have already generated savings of at least $800,000. Examples:

-- A group of people who use wire-bonding machines suggested that if a single worker came in 15 minutes early each morning to warm up all the machines, everyone could start work as soon as he arrived. The saving: about $22,000 a year. -- Another circle, of people who use color-coded tapes to assemble transformers for radar systems, recommended that each worker be given his own tape machine rather than sharing on a three-for-one basis. The twelve extra machines cost $174, but the company saves some $11,000 a year in production time. -- A purchasing-department circle noted that when supplies were ordered, many vendors routinely sent more than requested. The company either paid the bill or shipped the parts back at its own expense. The group tallied all the overcharge costs and found them startling. The solution was to inform suppliers that the company would either keep the extra material or charge for returning it. The saving: $636,000 a year.

For a cost-saving idea, the top award that members of a Westinghouse circle split up is $25,000. Says Earl Crehan, a vice president at the Baltimore plant: "The circles motivated our people. Unless management provides an environment of participation, we will not survive." Adds Georgette Schaefer, the supervisor of one circle: "They have all become minimanagers. They now take the job home with them."

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