Theory of Constraints

¶ … Constraints

What is the Theory of Constraints?

There has been a continuous development of management from the time it was realized that it can be studied carefully to form a branch of knowledge and the individuals who had studied it generally performed better as managers than others who never spent time on the matter. The Theory of Constraints or TOC is basically a philosophy of management and improvement. The first person to draw the attention of the world to this was Eliyahu M. Goldratt and he brought it to the notice of others through his famous book, The Goal. The guiding principle behind this theory is that in any organization there exists a weak link, and this acts somewhat like a chain with a weak link. This tops the organization from performing even better than it is performing at any period of time. In short, it is important to remove the weak link for the organization to improve its performance. This involves a direct effort to try and find out the piece of weak link, as it must be found before it can be changed. This must be realized and the management must act accordingly. (What is the Theory of Constraints?)

There is a body of knowledge and different analytical tools and these are called the TOC thinking process. These are powerful as these processes come from our experience in the accurate sciences and have their base on rigorous, easily understood and cause and effect logic. These methods are useful in finding of development of breakthrough solution. This is bound to happen as the conflicts within all systems in practical life are a result of the unexamined assumptions that have been taken on when the organization first started running. These matters can be carefully studied and the results will provide benefits for every individual in the organization. The TOC thinking processes are to be taken as a whole and used for not only solving the problems that can be seen, but should also find out the solutions along with the needed communication and successful solutions of the changes in the system.

The solutions can be found for all existing areas of business and for this article we shall concentrate on some areas of business and those areas include production, project management, distribution, supplier relations and marketing. The study will try to provide some solutions for finding out customized generic solutions for these areas. When the solutions are taken individually, they can also be seen to increase communication and improve functions through solutions like win-win conflict resolution, idea evolution and feedback, team building and empowerment and delegation. (What is the Theory of Constraints?) The methods are important for all business and are not related to the particular business for which it was found.

Operations/Production Management - Speed, Reliability, and Capacity

Operations or production is an area where the TOC process has been applied in quite a few instances. There are some signs in performance of business that gives individuals an ideal that the business is suffering from these defects. The flaws in operation can be expressed as poor on time performance, long lead times for production, high inventory of cork in process or finished goods, payments of very high amounts of overtime, requirement in production of expediting and rescheduling in many instances, bottlenecks in different areas or in the same area of business, and a general reluctance by the production management to accept new business. These are a possible indication that the organization is not being properly managed as far as production is concerned. This is then a correct indication that an investigation in that area will be beneficial for the business. Of course there will be the necessity of implementing the change later. Just as it happens in the total business, even the operation of the production operation has its own limitations. When the production function is an important factor in the operation of the organization, then this matter has to be properly taken care of. In these organizations, the constraint on productivity is the restriction on the operation of the organization. This operation was first introduced in the affairs of business by the book, The Goal of Eli Goldratt. His approach to the management of production gave excellent results and the restrictions brought about by the constraint are known as "Drum Buffer Rope" and as "Buffer Management." (Operations/Production Management - Speed, Reliability, and Capacity)

Here drum is the constraint or set of constraints connected to the demand for the product in the market and that determines the beating of the drum in the plant. The explanation of buffer is the gap or time or inventory that makes it certain that the constraints in the operation ultimately do not cause a great hurt to the total system. Rope is the release of material from the organization and this is the item that ties up the other two elements which has been described. The three elements of drum, buffer and rope are the reasons for the establishment of production schedules and the general attempt will be to prepare a schedule that is not likely to be disturbed. This will also try to make sure that excess inventory is not carried and small batches are produced every time to ensure that the lead time for production of individual batches remain small.

Even with a lot of care being taken into the system of managing the operations through drum, buffer and rope, there are some disruptions that happen in certain instances. The control of these situations is then made with "Buffer Management." When the two methods are used together -- "Drum Buffer Rope" and "Buffer Management" the aim is to reach productivity which will be lean or ones with low inventory. At the same time, the production should be able to regularly supply material in time for 95% of the orders. The system should also reduce lead time by about 35 to 50% and inventory by around %0%. Since the planning is done correctly, it is expected also that there will not be much requirement for rescheduling or expediting of orders. (Operations/Production Management - Speed, Reliability, and Capacity)

Gathering data

To improve the operations as discussed above, there is requirement that data is collected from the area. This is not an easy task as two people can go to the same area and collect two different sets of data. The difference may be even in the time taken by the two, and the quality of the data that is collected. The aim of every organization is to be able to collect accurate data within the shortest possible time. The first question is the starting of gathering of data. The next important aspect is to maintain common sense while the data is being collected and the third is the recording technique that is used. There is also a great requirement to keep the data organized. In the working life of today, the processes of work are changing very rapidly. Electronics has been important for man for a long time, but now human beings have started to use it a lot more so that processes have started to move much faster. (Fact Gathering)

Earlier the computers were main frames and the control was with a few specialists, and there was not much change. Today, computers are very popular, and every person wants to use computers. The operators are now at the level of simple operators. This means that in companies which use computers, it is essential to collect data from the employees even at low levels. This is easy in some companies, but a lot of companies have never done it in the past. This depends on the attitude of the company as they view the employees to be assets at one stage and expenses when the revenue drops of the company. This is the reason why the answer to the first question of the employees has to be decided first, and that is why the company is collecting this information and what they were planning to do with the facts. If the aim is for a TOC exercise, then it is a matter which can be explained to the employees. They should not get an idea that some of them will be compelled to leave their job.

The problem is that often the data is being collected by people whom they do not know. This makes the employees suspect all future moves. This is especially true for new employees as they are not aware of the history of the organization. The suspicion among the employees is that these outsiders will use the information for different purposes. They may get the feeling that a lot of employees will be removed, and this is also reflected in the newspapers which are reporting downsizing by many organizations. Yet the methods of work cannot be changed without gathering of facts. The situation will only be worsened if there are rumors which are flying. This may affect the quality of data that is collected. (Fact Gathering)

To a certain extent the problem can be solved through public announcements. This is normally a good method to stop rumors. The method of doing it is to announce a short meeting at the end of a shift, along with the announcement that a senior executive would like to speak to the people. The announcement should talk about the project, the aims of the project, the people involved in the project, a request of support from the employees and an offer to answer all questions. The question of staff cuts may be directly answered by the person or may come up as a question. The answer has to be direct and forceful giving a guarantee that there will be no staff cuts. At the same time, it is essential that the information is collected from the right spot. There may be a situation where there may be more than one person doing the same job, then the information should be collected from the person who is the most informed. There is a problem with introverts trying to collect this type of information, as they generally do not like to meet people. They may even take down the written procedures of work instead of finding it out from the people. It should be remembered that when an analyst tries to substitute written down data for collecting of information, the quality of data is inferior and this will give inferior results when the new procedure is implemented. This is only an attempt by the analyst to avoid trouble, but the results would be inferior. In some cases the differences may be substantial, and then the results will be materially different from the facts.

It should be remembered that during the process of collecting data, the other people are helping in the process of change. They have to interrupt their own work to give the analyst the data. This makes it essential that the analyst offer the people he meets to come back at a later time, if the people concerned are too busy. This may happen in some cases, but most of the employees do not like to disturb the schedule of an analyst. It is thus important for the analyst to directly find out by asking questions. Sometimes the employees may first start talking about general subjects like the weather, some sports, or changes in buildings. These are attempts by the individual to size up the investigator. The purpose of the employee is to find out what the investigator is up to, and what will be the result of the study. It is best to be clear and direct to him. The people who will be questioned will often be junior in status to the investigator -- file clerks, messengers, data entry clerks, etc. At the same time the investigator should not act snobbish to them as that will ensure wrong information being sent. Remember that the person being questioned is the authority on the subject in the organization. (Fact Gathering)

Critical Chain & Project Management the TOC Way

Some businesses are always working in terms of chain or project management. Some organizations find out that their projects are coming in over budget, not correct as per the plans or scope, taking very high lead times, wasting a lot of time of people through working extra time, and all this is leading the organization to a situation where they do not want to take on many projects. These are indications that the problem is in the management of projects. The general management of projects concentrates on delivering the projects in time, and the belief of most people is if the connected jobs are finished in time, then the project will also be finished in time. Yet, this is not what happens in many cases, and there is a lot of pressure in trying to meet the schedule of completion. This ends up in regular re-planning to meet the schedule. This is seen to happen now in many cases and the general findings of these projects indicate that there are conflicts between two different aspects of the project. This is due to the "safety" compliment that is built in projects by the management. This is not carefully handled and not properly optimized. This is due to cutting of a little safety in some aspects and risking a general lateness in delivery in some aspects. At the end of it all, the total delivery of the project is not to the satisfaction of the buyer or the company making the delivery. (Critical Chain & Project Management the TOC Way)

Anyway, whatever be the method of reaching the dates, the project schedules are then taken based on a certain set of compromise numbers and the resultant dates are stuck on to the walls. It is expected that the resources for the completion of the projects are expected to stick to these dates. Then, Parkinson's Law takes over -- work expands to fill the time allotted for it. This makes it practically impossible to beat the target and sometimes to even reach the target. This is only one area of conflict and there are many similar conflicts in an organization which has many projects to be completed and the resultant conflicts and dilemmas. This is what makes project management a challenge for many managers. This is generally sorted out by the process of critical chain scheduling and buffer management. This is a total system management technique and it does not try to manage any project just based on safe estimates of the individual tasks that are to be carried out. In this the project schedule is prepared based on the method to ensure the delivery date of the project. This is done by spreading the safety that is required among the different tasks and leaving most of it for the period where it is required the maximum -- end of the project.

Since the project is an aggregate, what happens is that the total buffer time is much less than the safety times that were earlier fixed and thus the result is a shorter time for the execution of the project. The behavior of each task is also influenced in a favorable manner, and with the reduction of safety, the project period is now shortened. This gives the entire team a sense of urgency and this helps in the reduction of diversion of resources to other jobs. The best factor is that the final schedule prepared in this manner is not likely to suffer from variations and uncertainty. There are no attempts to predict the date of the project by going into all the details of it and yet making sure that the project is predicted for a deliverable date. It has been seen that implementation of projects scheduled with "Critical Chain Scheduling and Buffer Management" ends with plans for projects that are shorter in time spans by 15 to 20% than the other projects where the schedules have been prepared in the regular manner. This also makes it more certain that the project will be completed by the projected date with less chaos and rescheduling. (Critical Chain & Project Management the TOC Way)

Management for managers who must maintain a schedule

There is always a pressure from the senior management of all organizations to ensure that tight schedules be met and at the same time, no increase of employees take place and no contractors are employed. This results in the teams spending more hours in meetings. There have been advances in telecommunications and groupware which produce a very high increase in the volume of information that is churned out, and there is always an expectation of response to this information. There are now a number of modes of direct communication -- cellular phones, laptops, modems; etc. which makes sure that every person's day is filled with attending to them. Though most companies provide a networked PC for everybody, the papers on the desks still keep coming -- vendor information, training and demo announcements, professional journals, regulatory forms, contracts, license renewals, benefit charges, documentation, reports, faxes and reply faxes, courier packages et all. (Process Improvement for Knowledge Workers)

The companies have now become less enamored of TQM and yet they have to concentrate on making the maximum of advances in science that are taking place. The biggest problem in this regard is that it keeps adding to the information load on the individuals who have to attend to it. Already the load is high and any addition makes life even more difficult. At the same time, these are the people who are deemed to have the greatest future in the organization and are promoted to project leaders or managers. This means that if the person already has a poor and inefficient work process than the individual's capacity to contribute further to the work of the team is going to be even less likely. This has been seen in a survey of white collared workers that half of the workers were badly organized and also overloaded to the extent for concentrating on improvement of business processes. This is very important to think about as there is now movements where there are efforts to continuously improve projects and all other functions of an organization.

When an individual has to deal with many items daily, in hundreds or at least scores, one should never delay in taking decisions about them, the first item that reaches the individual should be dealt with directly. This is especially important for knowledge workers as otherwise they will end referring to the same item for disposing of it, and yet coming out with no decision. This method just speeds up operations and saves energy. Another problem with managers is that they are regularly interrupted -- between every five to twenty minutes. Yet in work requiring development, there is a high requirement of concentration and that is impossible to achieve with such interruptions. The person cannot get into job research, analysis, writing innovation, design or communication. Even when there are good work systems within the organization, the employees still have to develop good work behavior. To achieve this, the workers have to be guidelines of the required mode of work. This will help them to correct their own styles. When any important work has to be done, it has to be scheduled. This is a lack of use of the calendar which is often used only for fixing meetings with others. It is important to plan work schedules as these will build up the reputation of the individual. (Process Improvement for Knowledge Workers)

Distribution Management through Replenishment

Sometimes businesses suffer from missed or partial shipments to customers, stock outs on some products regularly, keeping excess stocks on some other products, occurrence of regular high demands of production on some items, excess of returned goods from trade, and similar problems. This indicates that the organization is not being able to manage its distribution channels properly. There are many organizations which are only making items as "make to stock." This happens as the items are common and the order from the customer has to be fulfilled at the earliest. The important question here is how much of the material should be made and kept waiting in the stock for orders. The general method of solving this question is through forecasting, or predicting the likely sales that will occur. Yet the accuracy of forecasts themselves is open to doubt. This is due to the fact that long-term forecasts are often found not to work out in practice. (Distribution Management through Replenishment)

Often there is no real basis for the forecasts apart from guesses by individuals which have been made to look impressive with a whole lot of jargon and mathematics. Yet, in many organizations these guesses are the basis of production and then it is at the mercy of the accuracy of the guesses. There is an alternative method of looking at the problem and that is to take the decision based on not how much material it takes to meet orders, but to look at how much time it takes to produce the material for meeting an order. The TOC replenishment solution means that an organization will keep only enough stocks at the distribution points that will give enough time to produce the replenishment stocks, and the stocks at the distribution end will meet the market demand during that period. This also involves a certain amount of forecasting, but the period for which forecasts have to be made is only for the period which will be required for replenishment stocks to be made.

This is a different approach to managing distribution and it also helps the organization to concentrate on the benefits of speed. It ensures speed in deliveries as the distribution point has stocks on hand. Speed in movement through the distribution channel ensures that the inventory moves to the point where it is required. The benefit of increase in speed in production is clear as the system pulls the required material through the entire organization based only on demand. It does not matter how many warehouses exist as the system exists for the warehouses collecting materials from production, whether one warehouse or a dozen. The result is less inventory and improved cash flow. This makes it clear that the pull out system of distribution is probably the best method of moving product and cash within the organization. The implementation of such a system requires complete study of the different viewpoints of the manufacturer, distributor, customer, the method of transport and transporter and the changes in the product that may occur during movement. (Distribution Management through Replenishment)

Constraint Management & Supplier Relations

There are different problems of businesses and others may be suffering from long lead times being given to suppliers, problems with incoming material quality, late or unreliable raw material coming in from suppliers or directly purchased from the market, shortages of raw material and finally poor quality. These symptoms indicates that the problems of the organization is in the reliability of the supply chain supplying goods to the organization, as also the policies and practices followed in dealing with these suppliers. The important point in dealing with suppliers is to get from them what is required and this is in terms of delivery performance, quality, and all other aspects. This is regarding all material supplied by them. This is difficult as the supplier does not operate according to the instructions of the buyer. Dealing with suppliers is often so difficult that one feels the supplier cannot even be influenced by the instructions of the buyer. (Constraint Management & Supplier Relations)

Often enough they have many customers, and one particular buyer may even feel that they are not getting enough attention. The aim of all buyers is to get the required attention, and try to reach the status of a preferred customer. This requires a method to find a way of affecting their performance and thus bring them under the indirect control. This is how an external supplier may be treated to solve problems within the organization. At the same time, the continued effect on many organizations will ultimately affect their bottom line. This can be done also when you are able to correct the factors within the performance of the supplier. The constraints in improving profits may be in the form of low market demand, poor supplier performance for the organization, or even the financial institutions not extending enough credit to the supplier for their efficient performance. If there is an external constraint, then one has to prepare and present a complete offer that helps in the required areas.

The solution should solve the problem that is affecting the performance, and still provide the organization with sizeable and significant benefits in its profits. This type of a solution is certainly win-win as both companies concerned benefit from the adoption of the solution. This becomes an offer that cannot be refused and there are some methods for preparing such an offer. The organization presenting the offer, the value of the offer has to be viewed by the other organization based on many constraints, and not all the constraint is price. The other important factor that has to be conveyed to the party is that the person placing the order is in a place to make or break the deal, and yet that matter is best left unstated. The factor that has to be conveyed is that the offer is for a price that is related to bottom line benefits. Thus one of the main elements to be considered with such an offer is what the value of the offer means to the profits of the organization which is getting the order. Here the term profit does not indicate net profit, but may mean return on investment, inventory turns, cash flow or even keeping within budget. The important matter in this is looking at the cash impact through the views of the supplier and quantifying to him what is important. Thus the point that is made to him is the benefit in terms of bottom line that he gets and not only concentrating on the price that he gets. (Constraint Management & Supplier Relations)

The experience of Nokia

Let us now try to look at some industrial organizations which have used this technique to improve their own performance. First we shall look at a famous organization -- Nokia. .this was a functionally oriented organization and has moved rapidly to a business process oriented organization, and after the change they found that information systems have not been able to keep pace. To implement the change, the organizations have to learn and implement working methods for the development of business process oriented information systems. These are essential business needs and to improve the development of information systems, Nokia introduced new methods. These were created and tested during SPL. In 1996, the beginning of software engineering of Nokia Mobile Phones and Information Management was not clear, and there was no clear process for development of the software as per the needs of business. Requirement was determined in an ad-hoc manner without any system. For the design and implementation of technical design, there was project manual for guidance. For most of the organization, there was the system called "Work package 1." The utility of this was to sell the development ideas to senior management of the group. When there were successes in this, it could also be viewed as a success for the experiment. The job of the senior management was to be the guide and provide management support for all activities. (Implementing SPI: Combining business process improvement and system development at Nokia)

Then was the question of training which was divided into three parts of process thinking, IM methodology and tool. Process thinking and development principles were given to teams at the start of any project and this was the time of building up process descriptions. The IM methodology were given when the first draft of the descriptions were ready. This was expected to show some clear results. The training of the pilot project teams were a part of project training so that there could be a common methodology and language during the entire development. This led to Aris toolset training being given to the PIE team so that they could properly tailor the expected load. There were also external consultants to transfer their knowledge about IM development to the team from Nokia in terms of descriptions of the project. The process of transfer was through written descriptions and personal consultancy. The outside consultant had the responsibility of checking the preliminary rough process framework as developed within Nokia. The evaluation was expected to ensure the beginning point and targets meeting the international levels. During the entire project, the consultants ensured the quality of the framework with full details and descriptions.

There have been some results and the first is the availability of process documentation. The second is the development of the tool for support of the process. The process has been tried out in initial tests at pilot levels, and the developed experience used to progress further. The main impact has been in process development in the main pilot area, service and repair process. These have all been changed to meet the new requirements. The physical targets like reduction of the process turnaround time and a simpler system structure will be achieved when the base is ready. Even now the new process has been prepared and system specified. This is the importance of the tool in terms of business. The skills of project and pilot teams have improved. Their view in information management is now wider and they are also interested in business development apart from the technical considerations. This aspect also existed earlier but the requirement of development of skills is now clear. The team with the project has also been able to develop skills for other persons in IM since the general process and skill maps are ready. Some of the new skills that are required have been seen to be process thinking, architectural development, and fundamentals of human related change management and preparation of a development roadmap. In process development, human related change management has now become one of the key issues. It was of course clear from the beginning that there was not enough manpower concentrating on communication. (Implementing SPI: Combining business process improvement and system development at Nokia)

Constraint Management and the Market

Other businesses suffer from difficulties in getting customers, pressures on their pricing and the need to be more competitive on pricing, and frequent discussions on getting down to a smaller size as it was felt that they had much more capacity than was demanded by the market. This means in simpler words that the company does not have enough business and should think in terms of changing their products. The difficulties of the organization from reaching its goals can be internal or external. The internal problems can be in production, distribution, project management or human behavior. The external problem is the market. The symptoms of the market are evident from the fact that it is buying less than our supply. We need a bigger market. We have to start with understanding that all customers have their own limitations due to their own problems and difficulties. (Constraint Management & the Market)

The relationship of any organization with its buyers is the same as of its competitors. Increase in product acceptance can be achieved only if the relationship is developed to a situation where the product is tied around the relationship or if new products can be developed to augment the product or service that is being offered by the supplier. If the product and related material can offer some solutions to their problems, then it can improve the relationship. This may be in the form of reliability and on time delivery for some clients. Whatever it is a study has to be made of the clients special requirements, and then efforts must be made to find internal methods to modify our products to meet the client's requirement.

Some organizations want to achieve better performance in terms of profits, and they can do it if the external factors about their performance are improved. These factors may be in terms of low market demand, poor performance of their suppliers, or their inability to get enough capital. To solve the outside problem, the concerned organization has to prepare and present an offer to help reduction of the impact of the outside limitation on the organization's performance and the method of limiting the outside limitation in a manner that will provide enough profits for the client. The method of preparing the offer should be in a manner that will directly show the benefit of our offer to the client, and this will avoid being valued totally on price. This leaves other matters of the offer being left not clear to the client. The offer is to be made clear in terms of the benefits sought by the client, and this is in terms of profit, or ROI, or Inventory Turns, or Cash flow, or keeping within the budget. The important factor is that the supplying organization has to look at the improvement of their bottom line and thus determine what is important. When an offer is made this way, then the value of the offer is made on the basis of the benefits of the bottom line to the organization than on the basis of the price of the supplied goods. (Constraint Management & the Market)

Some problems can be corrected by software

The ability of the supplier to supply goods in time is often in doubt. When the customer calls, and places the order, even he is in doubt whether the goods will be shipped on the day decided by him, a day prior to the actual requirement. In the supplying organization the information available is that a smaller quantity is available in the warehouse and the balance is under production, a day before the shipping date. Will the salesman be able to confirm that the supply will be sent on time? The factory people in the supplier organization know that the machine for preparing a portion of the new components requires maintenance and can run only at one third of its capacity. That operation has also started only this morning. This makes it sure that the goods to be sent on the scheduled date will be short if no corrective measures are taken immediately. (When the Supply Chain Skips the Factory Floor, Manufacturers can only react to events)

Yet the factory may take the view that there is still enough time for meeting the order on the next day, and thus not bother about the corrective steps. They are not sure of all the details, and they plan to send the material a day late and then get into maintenance. The problem has come because the IT system between production and marketing are disconnected the company will not be able to react in time. This will require some urgent action to be taken at the very end and this may even involve borrowing back some quantities supplied to other customers temporarily so that the supplies can be made in time. Then there will be a lot of effort to apportion the blame to people. At the end of it all, the manufacturer will be needlessly disappointing a customer.

The problems in the machine could have been informed on the IT system; there could have been no requirement for all this stress on the organization to have taken place. The machines could have run overtime, or another machine could have taken up the task. Even marketing could have confirmed whether the client required the entire quantity on the same day. There was the possibility of having an easier solution and persons would never have had to suffer. There is software that can provide live, real-time, always on scheduling of all operations. It is possible to track and monitor all schedules in real time. The system also permits direct communication between the company and all partners. The most important factor is that the manufacturer can have direct and immediate analysis of its operation and thus confirm their capacity for delivery of orders. This is a method to enable companies look into operations and have direct knowledge of individual orders. (When the Supply Chain Skips the Factory Floor, Manufacturers can only react to events)

Teamwork and continuous improvement boosts Gold Eagle

The view on Theory of Constraints is taken differently in many organizations and one of the areas that it is important is in the enhancement of employee skills and that is rather difficult in today's competitive world. The skill of the workforce can counter to a certain extent the problems of global competition, rapidly changing technology, repositioned product lines, mergers and acquisitions, budget limitations and employee changes. This is an area where there are no so many established training organizations. One of the organizations providing this to the manufacturers in Illinois since 1992 has been the IMA training program. This is supplemented by grants to organizations in Illinois that are starting, expanding or relocating; developing new product lines; modernizing facilities or getting into any other activity requiring the need for training of employees.

The training program may cover all categories of jobs, and training has to be provided to all full time employees of businesses in the state. Generally under any training program there must be at least six employees. The required training may be provided in the form of classroom training, or through a number of workshops or seminars. The experts providing the training will meet with the company first to determine the particular needs of the company and then plan for the training to meet the requirements. The trainers are continually going through a process of developing and updating programs. The systems and facilities provide the most up-to-date and cost effective training. Some companies have felt however that an internal training has yielded better results, and the gold Eagle Company is one of them. (Strengthen your employee's skills and your company)

This is a company manufacturing premium quality automotive chemicals for more than 70 years. Their team of trainers believe that they have a culture of customer focused teamwork and continuous improvement so that they are able to improve and meet the challenges faced today. According to experts like Rose Hennessey, a director of Northern Illinois University Business and Service, believe that the company has a strong and ethical philosophy. Along with this they also have a long-term interaction with the business and industry program of the University and this has also contributed to their success. The leaders of the company are believed to have the respect, trust and admiration of the entire company workforce. The leaders have ensured employee involvement and thus taken advantage all the energy of all their employees to get to their results.

The Vice President of manufacturing of the company had his suspicions when the concept of customer-based teamwork and employee involvement were introduced for the first time in 1992. His experience has however now made him a supporter of the process. Initially he felt that getting everyone in the company to participate in solving of the problems was almost impossible. His experience with the results has now made him feel different. There has been recently the experience with a cross functional team that has worked and achieved a sizeable savings in the blow molding process. The group of people involved with the solution was from the sales, accounting and operations and this enabled them to find the breakthrough solution. This could have never happened in the earlier times. This is process improvement training and enabled Gold Eagle to achieve 99.5% accuracy in shipping. Now everybody in Gold Eagle is working like an improvement team. All workers have learned to find out what is important and work together for the benefit for the good of the customer, and thus the leadership training has benefited everybody. (Strengthen your employee's skills and your company)