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The most significant events in the story of how the plant survived because of its adoption of quality-based principles
Firstly, the Preston Plant was able to make profits for the first time after a series of losses. The end of 1999 saw the firm register a loss of $2 million. The improvement mainly resulted from the cost cutting measures that had been employed. The measures included laying-off workers in all the departments. Secondly, HP noticed the positive changes that the firm had implemented. In essence, HP granted the company the go ahead to bid for new products. Thirdly, the adoption of principles that aimed at improving quality eventually influenced the owner of the firm to rescind the decision on shutting down. There were improvements in production and quality and the firm was no longer making losses. Equally, profits were being registered for the first time after two years of losses.
The main benefits of bringing the plant’s processes under control
The morale of the workers was eventually boosted as a result of integrating the new control measures. Workers realized that their efforts had eventually borne fruits and now they could work at sustaining production to achieve customer satisfaction. The workers were increasingly getting nervous because of the failure to produce as measures were being integrated to improve on quality. This was affecting the psychological stature of the workers because failure to operate also meant lack of business and lack of revenues from where their salaries could be drawn.
Preston Plant eventually managed to improve on the quality standards of its production. These improvements meant that quality thinking among the workers and management was eventually being engrained in the organization’s culture. By so doing, Preston Plant was improving its chances of surviving in the business for longer and making huge profits because of its ability to attain the right standards as expected by its clients. It is this kind of corporate culture that influenced the managers of the company to work tirelessly towards salvaging the company. Their optimism had been nurtured by the ability to bring the company under control.
Other strategic benefits of bringing the plant under control
The creation of a new product portfolio was a strategic control for Preston Plant. Overreliance on a single product line was proving to be risky for the firm. It was the main reason the firm was struggling with prolonged losses. However, Preston Plant was cushioning itself from future risks by introducing new product lines such as Protowrap. Poor performance by a single product line would still allow the firm to rely on alternative product lines for survival.
The other strategic benefit involved cutting down the firm’s operation costs. Preston Plant was saving a significant amount of its revenues that would have otherwise been spent on salaries and wages by reducing the workforce by 40 percent of its original size. This means more funds were available to sustain other crucial programs. The zero-based assessment that enabled Preston Plant to determine the minimum number of workers was also going to be crucial in ensuring that the firm only employed enough number of workers.
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