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Case - Equipto, Inc.
Equipto, Inc., a division of a Fortune 500 corporation, is located in the Midwest. The
Industrial Motor Division (IMD) makes motor units that are part of the installation
package for large-scale industrial systems. The company has two major competitors in
the United States and several smaller competitors abroad. Although its market share has
shown a slight decrease, Equipto remains second in U.S. market share and first
worldwide.
Three years earlier, management had foreseen the need for adoption of a TQ
After initial planning by Green, Rule, and an outside consultant, the QOE program
was rolled out with three days of top management training -- led by the outside
consulting firm -- in TQ philosophy and techniques at the corporate level. All corporate
and divisional top managers (the CEO, corporate VPs, divisional presidents and VPs, and
a few selected staff people) were included in the executive training session. This TQ
training was cascaded down through the divisions, so that every employee received two
to five days of training. Much of the training was conducted in-house by facilitators at
begin to practice their newly learned skills. These activities pretty much consumed the
first year of the process.
During the second year, the company began to see some results. Employee
skepticism, which had been a major problem in the rank-and-file unionized workforce,
began to subside due to three factors:
1. Recognition of teams and team members who had accomplished some significant
results. One project that was completed after a nine-month study showed paper
savings of $100,000.
2. The enthusiasm of Bob Green, Division Director of TQ. He went around to all the
However, middle managers in the divisions had been given little training in how to
handle an “empowered” workforce, so they felt somewhat resentful of the process and
were left out of team activities.
Equipto and its IMD were in trouble at the beginning of the new fiscal year. Although
the Equipto, Inc. teams had been going strong for over a year, and they had about 20
percent of the hourly workforce involved, nothing tangible seemed to happen.
accounting department team was just being formed. Estimated savings during the first
full year of team operation were $200,000 (including the project that had saved
$100,000). Since only about $40,000 in direct out-of-pocket costs had been spent on TQ
program development, everyone felt that TQ gave a pretty good return.
At the middle of the year, top management announced that the company had sustained
Discussion Questions
1. Discuss the way in which the TQ program was launched. Could it have been done
differently, and perhaps better?
2. What are the pros and cons of up-front training (training before any projects are
begun) versus just-in-time training (training which is done concurrently with
development of projects)? Do you think that some momentum might have been lost
because employees were trained before they were sent out to work on projects?
3. When and in what form should SPC be introduced to employees at the operating
levels in the firm? Was it time for Equipto to do so, or past time?
4. Is it possible for TQ to be a success, and the company to be unprofitable, or worse?
What has happened in the history of Baldrige Award winners along that line?
5. What should the company do about its TQ process now? Scrap the program, keep
the same emphasis, or change to a SPC focus? Why?
