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Team-based strategy at Varian Australia: a case study
Technovation 23 (2003) 349–357 www.elsevier.com/locate/technovation
Team-based strategy at Varian Australia: a case study Amrik S. Sohal a,∗, Mile´ Terziovski b, Ambika Zutshi a a
Department of Management, Monash University, PO Box 197, Caulfield East VIC 3145, Australia b Department of Management, University of Melbourne, Australia
Abstract This article discusses the use of work teams at Varian Australia, a manufacturing organisation based in Melbourne, Australia. The company manufactures high-technology instruments that are largely exported to the USA and Europe. The paper describes the experiences of the company with continuous improvement process teams (CIP) and corrective action team (CATs) over a decade, from 1990 to 2000. The article discusses the reasons for the slow down of the process improvement program and the appropriate changes that were made to relaunch the continuous improvement strategy at Varian Australia. Based on the qualitative analysis in this article, a number of interesting lessons can be learned. The main lesson is that voluntary, cross-functional teams are more effective than compulsory membership, as team members are motivated to work towards their goals and better understand the processes. Team members found that by working together the result of their combined effort was much greater than the combined results of their individual efforts. This approach reduced the product development cycle on Varian projects by up to 50%. 2002 Elsevier Science Ltd. All rights reserved. Keywords: Continuous improvement process; Continuous improvement process teams; Corrective action teams; Australia
1. Introduction During the 1980s and the 1990s organisations across all sectors of industry adopted the concepts of quality and continuous improvements in order to develop a competitive advantage. To make these principles work, many organisations had undergone a significant change in their structure and hierarchy, moving from the traditional ‘individual’ to the current ‘teamwork/group work’ strategies. Attaran and Nguyen (1999) summarise the characteristics of traditional versus self-managed teams in terms of tasks, skills, roles, control, work effort and supervision (see Table 1). It has been reported that more than half of the listed Fortune 500 companies use ‘self-directed work teams’ (Cartmell, 2000, p.38; Beckham, 1998, p.51). The working and success of self-managed teams has been related to “socio-technical theory which advocates jointly optimising both the social and technical components of the work teams” (Beckhman, 1998, p.49). The term ‘socio-technical system’ was first coined in the 1950s ∗ Corresponding author. Tel.: +61-3-9903-2033; fax: +61-3-99022979. E-mail address: [email protected] (A.S. Sohal).
Table 1 Traditional vs self-managed teamsa Characteristics
Traditional
Self-managed work teams
Tasks Skills Roles Control Work effort Supervision
Rigid Specialised Fixed Individual Divided Outside of group
Flexible Multi-skilled Interchangeable Group Cohesive Within the group
a
From Attaran & Nguyen, 1999, p. 25
by the British Social Scientist ‘Eric Trist’ (Attaran and Nguyen, 1999, p.24; Beckhman, 1998, p.49). Companies such as Toyo Ink in Kilsyth, Victoria, Australia (Robbins et al., 2000, p.516); Australian Water Technologies Pty Ltd, Australia; ICI Villiawood (Davidson and Griffin, 2000, p.684, 671); Hospital For Special Care (HSC), Connecticut (Blejwas and Marshall, 1999, p.14); Quarker Oats, Danville, IL (Morris, 1999, p.57), Thrall Car Mfg. Company, Cartersville, Georgia (Kuvin, 1998) and Chevron Western Production Business Unit, California (Attaran and Nguyen, 1999) are living examples that have experienced increased profits,
0166-4972/02/$ - see front matter 2002 Elsevier Science Ltd. All rights reserved. doi:10.1016/S0166-4972(01)00114-6
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cost savings and improved morale by introducing selfmanaged and cross-functional work teams. Other main advantages of using self-managed teams include “reduction in labour costs and lower maintenance costs” (Chaneski, 1999, p.52); and “more effective use of resources and enhanced individual problem solving skills” (Cartmell, 2000, p.40). The achievement of these benefits by a company only having people ordained with rare and mysterious qualities that cannot be learned by others, is completely dismissed by the findings of the Collins and Porras (1994) study. The study also identified six core ideologies present within successful, visionary companies that include: 앫 strong cultures around the ideology; 앫 selection of senior management based on fit with a core ideology; 앫 attainment of more consistent alignment with a core ideology in such aspects as goals, strategy, tactics, and organisation design; 앫 focus on continuous improvement and teamwork; 앫 serve the customer above all else; and 앫 promote ‘trust’ and respect for the individual. Recent research findings from Australia also show that unity of purpose and the elimination of barriers between departments (i.e. a cross-functional team approach) are the most significant predictors of organisational performance (Terziovski, 1998, p.258). Considering the findings from the literature, this paper outlines the initiatives undertaken by a long established organisation, Varian Australia Pty Ltd, a leading manufacturer of high technology instruments based in Melbourne, Australia, to identify best practice in teamwork. In particular the paper discusses the use of two types of teams — the Continuous Improvement Process Teams (CIP Teams) and the Corrective Action Teams (CATs) and how over the past decade Varian Australia learnt from their experiences. The significance of the employee–management relationship, the development of trust and the key success factors in teamwork are also identified and discussed in this paper. Earlier articles have described Varian Australia’s Value Added Management (VAM) program (Sohal, 1997); and its Continuous Improvement Process (CIP) (Sohal and Lu, 1998). The current paper focuses on Varian Australia’s experience over the past 10 years work teams.
2. Literature review The underpinning principle of Continuous Improvement (KAIZEN) is the use of various problem-solving tools by work-based teams for the identification and solution of work-based problems (Imai, 1986; Beckhman, 1998, p.48). The aim is for improvement to reach new
‘benchmarks’ with every problem that is solved. To consolidate the new benchmark, the improvement must be standardised. In many Australian firms this standardisation has been attempted via systems such as ISO 9000. Beckhman (1998, p. 49) defines a self-managed team as a “permanent self-managed group of … 5 to 10 … employees who work together to produce a product or service [and] who with additional training are able to perform management … as well as support functions”. Following are some of the responsibilities carried out by members of self-managed teams (Beckham, 1998, p. 51): 앫 set group and individual goals; 앫 assume responsibility for productivity, cost and quality; 앫 plan, schedule, control and inspect their own work; 앫 prepare their own budgets and accept responsibility for complying with the terms of those budgets; 앫 select suppliers; 앫 interview and hire new employees; 앫 coach and counsel team-mates; 앫 evaluate the performance of team-mates; 앫 monitor and control quality and safety; 앫 make major changes in their work systems or processes; 앫 order supplies, maintain inventories, and recommend new equipment; 앫 plan their own training and assume responsibility for orienting and training newly hired personnel; 앫 perform routine repairs and provide maintenance, housekeeping and troubleshooting services; and 앫 deal directly with people at all levels of the organisation. A similar definition has been given by Robbins et al. (2000, p.517) according to which a self-managed team is an “independent group that in addition to doing their operating jobs [also] take on traditional management responsibilities such as hiring, planning & scheduling and performance evaluations”. “Cross-functional skills, decision making autonomy, ready access to information” (Blejwas and Marshall, 1999, p.15), “common purpose, interdependence, accountability” (Chaneski, 1999, p. 52), “high level of trust, open climate for communication, [and] shared decision making” (Cartmell, 2000, p.39) are some of the characteristics that feature a selfmanaged team. Involving employees from different areas / departments of an organisation as a part of self managed teams brings in the benefits of sharing of information and expertise to reach better solutions. Hodson (1998, p.8) after an in-depth study of employees in different work place settings cautions managers to not make the mistake of replacing “decent standards of employment with work place teams”. The literature has also summarised a number of barriers and
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challenges accompanied and experienced by organisations when implementing teams (Chaneski, 1999, p.52,3; Beckham, 1998, p.54,5; Cartmell, 2000, p.39). 앫 The resources (time, money, people) required to train employees in team concepts need to be utilised judiously, as it not only takes the employees away from their daily responsibilities but using wrong / un-tailored training can result in wastage of these resources. 앫 Not all the areas of the organisations may require teamwork and failure to understand this can once again result in wastage (over- or under- utilisation) of resources. 앫 Many employees complain of the lack of continuous support in view of their work schedules and strict time constraints, especially from management, to remain motivated to work in teams. 앫 As with the implementation of any new system, results from self-managed teams do not come immediately and this can result in frustration, conflict and demoralisation among both the management and employees. 앫 Managers and supervisors are many times sceptical of the whole concept of self-managed teams due to the perceived threat to their power and control. 앫 The rotating leadership role in a team sometimes may not be handled by employees either due to poor leadership skills, lack of experience or even peer pressure. In some instances an employee’s previous experience and perceptions with teams can also impact the team cohesiveness, effectiveness and thus its performance. 앫 Ready access to allocated budgets and information required to complete the project/assigned tasks may face resistance from other departments in the organisation as well as from management. To address the above-mentioned challenges/obstacles, organisations are increasingly concentrating on making the best use of their internal resources, its employees in teams. Organisations are trying to address the various issues of employee resistance, which were also concluded from the Kirkman et al. (2000) study of employees in two Fortune 500 organisations and their exhaustive literature review search. The main reasons for employee resistance were found to be “violation of fairness, increased work loads concerns, uncertain managerial support, unclear role definitions, lack of team member social support, trust, cultural values and low tolerance for change” (Kirkman et al., 2000). The literature identifies various methods that could be used to maintain the effectiveness and productivity of work teams, including (Benefield, 1998, p.34; Taggar et al., 1999). 앫 Having a defined vision for the team with achievable and measurable targets.
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앫 Providing the team, as requeried, with adequate resources (time, money, training) support and guidance. 앫 Having a system in place that regularly monitors the team’s performance and assist in giving feedback to the team members both individually and as a group. 앫 Positive reinforcement: in order to get continuous results from the work teams it is essential that achievements are recognised. Positive reinforcement could be displayed by recognising specific tasks, providing special opportunities, giving awards, increasing freedom of decision-making and by providing resources that help to achieve the team’s needs. 앫 Personalising conversations with the team members either alone or in a group 앫 Presence of a leader in the team who at times may also perform the roles of a facilitator and counsellor. The effectiveness of the leader in a team was found to be directly proportional to the teams success in the study done by Taggar et al. (1999) of 480 undergraduate students in 94 leadership teams of five or six members. The case study presented below explores the practical usage of many of the above mentioned measures such as ‘motivation/positive reinforcement; presence of a facilitator; top management support; regular meeting and monitoring methods’.
3. Research methodology The case study is based on interviews and discussions conducted with employees of Varian Australia over a number of months during 2000. Initially a series of interviews were held with staff employed in the quality department, including the Quality Manager and the Quality Systems Co-ordinator. Finally a discussion session was held that lasted for approximately 1 1/2 h. Those participating in this session included shop-floor employees, supervisors and members of the Quality Assurance Team. The discussion was tape-recorded after obtaining prior consent from the interviewees and subsequently transcribed and typed. The discussions were exploratory in nature, conducted to understand the issues being currently experienced by the organisation with respect to team-based decision-making strategies. Another aim was to understand the experiences of the organisation’s employees with team-work. The key questions to be answered were: how focus on work teams is maintained over a long period of time?, what can managers do in response to a slow down in workteam activity?, and what are the interesting lessons learnt by Varian Australia from their long experience with work-teams. The initial site-visit interviews and discussions were
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converted into the case study by the researchers, as it offered the convenience of combining both ‘exploratory’ and ‘descriptive’ methodologies together. The literature also supports the usage of case study methodology as it tries to uncover the answers to a “decision or a set of decisions [for instance] why they were taken, how they were implemented and with what result” (Yin, 1994, p.12). A number of other researchers, such as Corbett and Cuttler (2000); Greenwalt (1994); Simon et al. (1994); McGuire (1995) and McCutcheon and Meredith (1993), have also supported the usage of case study methodology. Case studies thus give a holistic view of the happenings around a topic or question by going indepth (for instance as in the case of observations and interviews) by the use of “why; how; who; what and when” (Yin, 1994, p.3; Zikmund, 1997, p.38; Wallace, 1984, p.181) questions. The use of such exploratory questions during the course of interviews has been supported by a number of other researchers, including Howard and Peters (1990); Burns (1998) and Eisenhardt (1989). The exploratory and descriptive data obtained from the case studies thus assists in (Uma, 1992, p. 97): 앫 understanding the characteristics of a group in a situation of interest; 앫 thinking systematically about aspects in a given situation; 앫 offering ideas for further probing and research; and 앫 helping [in] making certain simple decisions. In alignment with the basis of case study methodology, as highlighted in the literature, the researchers preferred to use this methodology in examining workteams at Varian Australia.
4. The company Varian Australia is part of Varian, Inc., a world leader in scientific instruments and vacuum technologies. It is a major supplier of analytical instrument solutions, nuclear magnetic resonance (NMR) systems, vacuum products and services, and operates a state-of-the-art contract electronic manufacturing center. The company is an innovative team with unsurpassed experience in creating application-specific solutions for customers in the life science, healthcare, chemical, petrochemical, environmental, industrial, communications and semiconductor industries. Varian, Inc. is a truly global company, manufacturing in ten locations in North America, Europe and the Pacific Rim; operating more than 70 sales and service offices; employing some 3000 people world-wide; and selling to more than 20,000 customers annually. In its most recent fiscal year, Varian, Inc. had sales of around US$650 million. Varian Australia employs approximately 350 people at its Mulgrave, Melbourne
site with another 50 people working in other Australian states in the sales and service centres. The Mulgrave site designs and manufactures analytical instruments. This range includes three major product lines, namely atomic absorption, UV-VIS and ICP.
5. The continuous improvement process at Varian Australia Varian’s quality initiative is referred to as the Continuous Improvement Process (CIP) Program and was implemented in the early 1990s. The CIP Program’s goal is to consistently evaluate the processes of the organisation with the aim to continuously improve them to produce better products and services. This has been termed as ‘Operational Excellence’ by the company and includes accomplishment of following five goals (www.osi.varianinc.com/quality/cip/cip.htm): customer focus in all that [Varian does]; fast time to market; unbending commitment to quality; superior organisation and teamwork and fast flexible operations. Prior to the implementation of the CIP Program management trialled a number of quality initiatives in the 1980s. For example, the Juran approach to quality improvement was examined with the help of a consultant who provided some training by means of a series of videos and Juran training material. However, much of the training was directed at solving problems and it was felt that these off-the-shelf training packages were not effective in delivering a change in culture throughout the organisation. The Continuous Improvement Process (CIP) program was started in early 1992 and has been a most effective quality program for the organisation. By implementing the CIP initiative Varian Australia has been able to develop as a quality organisation. This initiative has provided effective training, control and monitoring of quality improvement activities and a particular focus on quality in all that is done. Some strengths of the CIP approach were: 앫 focus on satisfying both external and internal customers; 앫 driven by a formal Quality Council, rather than the Quality Manager; 앫 formation of natural work teams as the principal vehicle for continuous improvement (as distinct from cross-functional teams whose specific objectives are to solve problems); 앫 emphasis on getting runs on the board’ for small projects involving daily work; 앫 train-the-trainer’ concept, through to shop floor; and 앫 supports Varian’s global business goals. Varian Australia began by identifying the specific needs to be addressed by the CIP program. Key areas
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identified included team building, process improvement and problem solving skills. The company sought the help of a local consultant to initiate the CIP program and deliver the initial training material. A Vision Setting Workshop was held for senior managers, at which the strategy to achieve the goal of becoming the ‘supplier of first choice’ was discussed. Further courses were held to provide training for other managers and to facilitate implementation planning. One outcome of these activities was the appointment of a program manager to oversee the CIP program. Another outcome was the appointment of internal trainers to conduct further training within the organisation. The Quality Council was established to oversee the CIP Program as well as other areas of quality management within the company. Members of the Quality Council included the Managing Director and other senior managers, and the Quality Manager.
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their goal. Progress made by each CIP Team was reviewed every 6 weeks by both the CIP Program Manager and the Quality Council. CIP Teams were instrumental in addressing process problems. It was estimated that CIP Teams resolved all but 200 of the more than 2000 problems identified during 1992 and saved the company many thousands of dollars. CIP Team success stories were published in company newsletters outlining team objectives, solutions developed and the savings made. Monetary rewards were offered to teams that had successfully made improvements. Other forms of recognition for team achievements include storyboards displayed on noticeboards for each team and quarterly team presentations to the Quality Council. Internal quality perception surveys were also conducted every 6 months that showed a high level of satisfaction with the CIP Program. 5.2. Maintaining the CIP program
5.1. CIP teams When the CIP program was first initiated, all the employees were given approximately 12 days of training. All new employees still go through this training, however, now initially in only half a day and subsequently completed over a period of few months. This CIP training is in addition to the employee induction– training program received by all new Varian employees. This training covered topics such as Brainstorming, Decision Making, Communication and Quality tools such as Flow Charting and CEDAC Charts. Several staff were also trained as trainers and facilitators. It is estimated that the initial training amounted to over 9000 h. All employees within the organisation were required to become a member of a CIP Team. At present, however, this process is voluntary, with the teams becoming crossfunctional in work areas. The total number of CIP teams has reduced from 50 (based on their individual management projects) in 1992 to seven in the year 2000. The currently operating seven teams are: U V Cary; Network Assistance; Purchasing Invoice Query Reduction; Fabrication Engineering Support; CNC Lathe; Machine Shop Quality; and Marketing Information Distribution. Teams worked both on product related problems in their work area as well as the implementation of other improvement initiatives to their particular area of work and met weekly to monitor their progress. The frequency of team meeting however varied from weekly to monthly, depending on the requirements of the team. The team members typically meet on the shop-floor and discuss problems, as CIP teams works in repetitive taskbased areas. Each CIP Team had a sponsor, typically a person from middle management, who acted as a link between the CIP Team and senior management. The role of the sponsor is not to provide direction but to clear any road blocks the team finds when progressing towards
CIP Teams functioned successfully within the organisation until around 1996 when they quickly died out. One major cause of this was that by this time all the major problems had been easily identified and tackled and only the small, difficult problems were left. There needed to be a change in the program for these problems to be successfully resolved. For almost 1 year there was little activity by CIP Teams. Because of the history of improvement initiatives at Varian Australia, its workforce was already accustomed to accepting new programs. However, some experiences from previous attempts did little to create enthusiasm for the CIP program. The net effect was an attitude of disinterest on some people’s part. Another problem, that contributed to the failure of the CIP, was the lack of response from the Quality Council to suggestions made by some operators. There was also a perceived threat to supervisory and managerial roles and, as indicated in the literature, one of the factors to be cautioned by managers. Team members also found that some problems which needed to be solved were outside their team’s scope. During the course of recent interviews, according to its shop-floor workers, the failure of CIP teams could be linked to its large size (12 or more in a team), lack of experience of team members to set objectives and targets and the time and money spent in weekly meetings without many teams reporting tangible results leading to frustration; the fact that the sponsor of the team was initially himself on a learning curve added to further communication gaps. As a result, the employees could not clearly understand the purpose of CIP teams, leading to their withdrawal from them. In mid-1997 there was a complete turnover of staff within the Quality Department. A new Quality Manager was appointed. This is a person who had previously worked for Varian in the Technical Support Department.
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In addition, a Quality Systems Coordinator was also appointed, a position that had been vacant for nearly a year. Under the direction of the new Quality Manager and the Quality Systems Coordinator the CIP program was re-charged in September 1997. A new structure for CIP was developed using elements from the previous program and incorporating new ideas suggested by various employees at Varian. These employees included staff from various levels of the organisation as well as shop-floor employees. A more rigid structure was introduced to best capture ideas and maintain the momentum of the new program, in addition to making the participation in teams voluntary for employees, as opposed to previous mandatory requirements. By 1997, the Quality Council established in 1992 had dissolved and the new structure included a Steering Committee that is now responsible for the ongoing success of CIP and for ensuring that the CIP Program is operating effectively and in line with the company’s goals. The steering committee has three permanent and three rotating members who meet every 6 months to monitor CIP team targets and progress. One of the goals of the CIP development group was to implement a process that would increase team resource, skills and productivity. Under the new structure teams are only formed where there is a genuine need. The teams are formed using the people that are interested in and have the skills required in making the improvements. This now meant a change from work flow teams to cross-functional teams. This maximises the productivity of the teams. The teams are disbanded after the process improvement has been implemented and reviewed. A mechanism for team reward and recognition was also improved on by the Steering Committee. All teams are eligible for consideration for the Encouragement Award. This is a $50 award paid to all members of the CIP Team who make any contribution to the Profit and/or Growth of Varian Australia through the CIP Program. These awards are presented when the team has reached its goals. The Exceptional Contribution Award Program (ECAP) has also been established to award those team members that have achieved improvements beyond management expectations. An ECAP award is nominated jointly by the Quality Manager and the Quality Systems Coordinator to the Senior Management Group and the Managing Director. At the discretion of this group, a financial payment above the Encouragement Award ($50) is made to each member of the CIP Team. One example of this was a CIP Team that saved the organisation in excess of $60,000 per annum by improving the test equipment calibration system. An annual Quality CIP Award was also created in 1997. This is awarded to a CIP Team that makes the most significant contribution to Profit and/or Growth of Varian Australia. Both the Encouragement Award and the Annual Quality Award are presented to all members
of the CIP Team, including monthly-paid (staff) employees. CIP Teams are continued to be recognised through articles in the Corporate Newsletter and on noticeboards placed throughout the Manufacturing area. The above-mentioned awards have continued to motivate Varian employees, especially at the shop-floor, to remain involved in teams and make improvements. According to its workers it is not the amount given in the award, which is important, but the recognition, encouragement and personal satisfaction of being a part of the organisation’s success. In the year 2000 employees still use the techniques first learnt in the CIP training program nearly a decade ago. Improvements can be seen, not only in improved quality and introduction of new products, but also in employee’s interpersonal skills such as communication and leadership. 5.3. CATs CATs were established at the same time as CIP Teams. CATs work to solve specific product related problems that are found internally through the problem reporting process and those problems raised externally through the Technical Support department. Members of CATs include representatives from Marketing, Production, Technical Support, R&D, Production Engineering and Quality. There is no permanent involvement from shop-floor employees, although these employees are invited and are involved in solving specific problems. Initially, the input to CATs meetings were internal problems (particularly those that could not be solved by the CIP Team), but they quickly moved onto solving other problems identified from worldwide field reports received through electronic mail. A CAT was established for each of the product lines and has a permanent leader who is appointed by the Quality Manager. CATs meet once a week and their main focus is on solving problems related to products, whereas the focus of CIP Teams is on solving process related problems. Although there was no CIP Team activity during 1996, CATs have continued to function successfully since 1992. CAT outputs are not formally evaluated, but their activities are monitored by relevant management personnel, including the Technical Support Manager and the Research & Development Manager.
6. Discussion This paper has presented the experiences of employees at Varian Australia, over a period of 10 years, with work-teams, the challenges faced by them during the process and the benefits received from working in teams. The major difference in the new approach to the CIP Program at Varian Australia is that whereas previously each employee was required to become a mem-
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ber of a CIP Team, membership is now voluntary. Enthusiastic employees are now identified and asked to become members of a CIP Team. CIP Teams have six or seven members and are often cross-functional teams. CIP Team leaders are selected on the basis of their communication skills. They need to be outspoken, but not dominating. They must be able to guide the CIP Team in completing an improvement project. Each CIP Team has a sponsor to ensure that resources are available to complete the project. They also aid the CIP Team leader in guiding the team towards their goal. Projects for improvement are now identified on the basis that the processes involved directly link to the organisational goals. A Steering Committee now exists that oversees all CIP Team activities. This Steering Committee is made up of production managers and personnel from the quality department, including the Quality Manager. The Steering Committee meets once a month to review the CIP Teams and suggest projects for new teams to work on. All new employees are provided with a 4-h CIP training session. Refresher training is provided to all CIP Team members by the Quality Department on a ‘as needs’ basis. Rather than presenting to the Quality Council, outcomes of CIP Team projects are now jointly reviewed by the Quality Manager and the Quality Systems Coordinator. The Manager and Senior Manager of the work area are invited to the review. Financial awards are now given as appropriate, based on the savings made. Currently (2000), there are seven CIP Teams functioning within Varian Australia. CIP Teams now develop their own charter and identify priorities and limitations. A goal and time frame for completion of the project is set at the beginning of the process to provide structure for the group, however, these are revised as required. Teams are currently operating both in the manufacturing and the administration areas and there are plans to further increase employee participation in CIP Teams in all parts of the company over the next few years. The desire to have successful teams operating throughout the organisation is balanced with the actual need for improvements to be made. 6.1. Lessons learned Senior management at Varian Australia believe that CIP Teams and CATs played a significant role in making continuous improvement to products and operations in the first half of the 1990s. These teams allowed ‘just-intime’ performance to be achieved, improved the efficiency of the processes of the organisation and reduced installation and warranty costs in the field. The major reason for the slow down of the CIP Program and the CIP Teams was due to the perception amongst team members (and to some extent management), that whilst the CIP Program had been successful in solving the
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major problems, it was not suitable in its current format for tackling the smaller and hard to define problems. As a result, many team members had little to contribute to their teams. Varian Australia’s experiences with teams over a 10-year period provide a number of interesting lessons. 1. Varian Australia has found that voluntary, cross-functional teams are more effective than compulsory membership, as people are motivated to work towards their goals and better understand the processes. 2. For a team to achieve success, it must have a clear goal and a target completion date. Without a proper time-frame and clear goals teams are likely to lose focus. 3. Teams are only formed when there is a real need identified for improvement. Varian Australia has found that a continuous improvement program only works successfully if teams have real goals to work towards that are linked to the organisational goals and targets. 4. Problems to be solved by teams must be within the capability of the team members. Varian Australia found that teams that were given projects beyond their capability resulted in team members becoming disinterested and distrustful of the CIP Program. 5. Each team must have a sponsor who can work closely with the team and provide direction. The person must have knowledge of CIP tools and must be committed towards achieving the goals of the team. 6. The Steering Committee has proved an important part of the CIP Program at Varian Australia. It was formed to focus on the CIP Program and has over the past 2 years been the driving force behind the CIP Program.
7. Conclusion This paper has analysed the experiences of Varian Australia with respect to process and product improvement teams (CIP Teams and CATs, respectively). Senior management at Varian Australia sees teamwork in all areas of the organisation as an important part of its continuous improvement strategy to stay ahead of its competition. Varian Australia is able to sustain their efforts to continuously improve products and processes by persisting with cross-functional teams. Varian Australia’s culture changed over several years from ‘unstructured, individualistic, throw it over-the-wall attitude to problem-solving and decision making’, to a predominantly ‘participative problem solving and decision making culture using a team approach’. Based on our qualitative findings from the Varian Australia experience, it is reasonable to conclude that process and product improvement teams are the foun-
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dation upon which a continuous improvement culture can be developed in an organisation.
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ity management. International Journal of Technology Management 16 (4/5/6), 336–357. Taggar, S., Hacket, R., Saha, S., 1999. Leadership emergence in autonomous work teams: antecedents and outcomes. Personal Psychology 52 (4), 899–926. Terziovski, M., 1998. Demystifying the Quality Confusion: Empirical evidence and Lessons Learned. Consensus Books, Standards Australia. Uma, S., 1992. Research Methods for Business: A Skill Building Approach. John Wiley & Sons Inc, USA. Wallace, K.M., 1984. The use and value of qualitative research studies. Industrial Marketing Management 181, 181–185. Yin, R.K., 1994. Case Study Research — Design and Methods. Sage Publication, USA. Zikmund, G., 1997. Business Research Methods. The Dryden Press, USA.
Dr Amrik S. Sohal is a Professor in the Department of Management and Associate Dean (Research) in the Faculty of Business and Economics at Monash University, Melbourne, Australia. He is also Co-Director of the newly formed Australian Consortium for Effective Organisations (ACEO). From 1991 to 2000, Professor Sohal was Director of the Quality Management Research Unit and from 1993 to 1997 served as an Associate Dean (Research Development) and Associate Dean (Graduate Teaching) for the Faculty of Business and Economics at Monash University. He holds a PhD in Manufacturing/Operations Management from the University of Bradford Management Centre in the UK, as well as a BEng (Hons) and an MBA, also from the University of Bradford. Professor Sohal is Associate Editor for the journal Technovation and Asia Pacific Editor of the International Journal of Quality and Reliability Management. He is a member of the Editorial Board of a number of journals in the area of quality management, technology management and operations management. Professor Sohal has authored or co-authored over 100 papers published in refereed journals, as well as three books and a number of chapters contributed to books. His current research interests are in manufacturing/operations strategy, technology/information management, quality management, supply chain management, lean/agile production systems and electronic business. He has received grants from the State and Federal Governments, the Australian Research Council and Monash University.
Dr Mile´ Terziovski commenced his career with CRA-RTZ Ltd. as a Trainee Mechanical Engineer. He has held various positions in production, maintenance, and project management over a period of 17 years. He obtained his PhD in Business Management from the Melbourne Business School, The University of Melbourne. Dr Terziovski is the Director and Deputy Chair of the European Australian Co-operation Centre (EACC) at The University of Melbourne. He teaches Organisational Innovation and Quality Management at undergraduate level and Strategic Management at Masters level. Dr Terziovski has presented papers in the Operations Management stream of the Academy of Management and had an all-Academy best paper nomination at the 2000 conference. Dr Terziovski was recently invited by the President of The Republic of Macedonia to participate on an e-Commerce Advisory Committee chaired by the President.
A.S. Sohal et al. / Technovation 23 (2003) 349–357 Ambika Zutshi is currently completing a PhD in the Department of Management at Monash University, Melbourne, Australia. Her previous qualifications include a Bachelor’s degree in Environmental Studies and a Master’s degree in Environmental Management. Her current research is focused on the examination of the role of various stakeholders in the planning and implementation of Environmental Management Systems. Ambika’s professional training includes the completion of ‘Implementing an Environmental Management System’ course and is currently completing the practical training towards the “Environmental Systems Auditors’ course”. She also works as a Research Associate and as a Lecturer/Tutor at various institutions in Melbourne and has articles forthcoming in the Business Process Management Journal and the International Journal of Environment and Sustainable Development.
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Team-based strategy at Varian Australia: a case study Amrik S. Sohal a,∗, Mile´ Terziovski b, Ambika Zutshi a a
Department of Management, Monash University, PO Box 197, Caulfield East VIC 3145, Australia b Department of Management, University of Melbourne, Australia
Abstract This article discusses the use of work teams at Varian Australia, a manufacturing organisation based in Melbourne, Australia. The company manufactures high-technology instruments that are largely exported to the USA and Europe. The paper describes the experiences of the company with continuous improvement process teams (CIP) and corrective action team (CATs) over a decade, from 1990 to 2000. The article discusses the reasons for the slow down of the process improvement program and the appropriate changes that were made to relaunch the continuous improvement strategy at Varian Australia. Based on the qualitative analysis in this article, a number of interesting lessons can be learned. The main lesson is that voluntary, cross-functional teams are more effective than compulsory membership, as team members are motivated to work towards their goals and better understand the processes. Team members found that by working together the result of their combined effort was much greater than the combined results of their individual efforts. This approach reduced the product development cycle on Varian projects by up to 50%. 2002 Elsevier Science Ltd. All rights reserved. Keywords: Continuous improvement process; Continuous improvement process teams; Corrective action teams; Australia
1. Introduction During the 1980s and the 1990s organisations across all sectors of industry adopted the concepts of quality and continuous improvements in order to develop a competitive advantage. To make these principles work, many organisations had undergone a significant change in their structure and hierarchy, moving from the traditional ‘individual’ to the current ‘teamwork/group work’ strategies. Attaran and Nguyen (1999) summarise the characteristics of traditional versus self-managed teams in terms of tasks, skills, roles, control, work effort and supervision (see Table 1). It has been reported that more than half of the listed Fortune 500 companies use ‘self-directed work teams’ (Cartmell, 2000, p.38; Beckham, 1998, p.51). The working and success of self-managed teams has been related to “socio-technical theory which advocates jointly optimising both the social and technical components of the work teams” (Beckhman, 1998, p.49). The term ‘socio-technical system’ was first coined in the 1950s ∗ Corresponding author. Tel.: +61-3-9903-2033; fax: +61-3-99022979. E-mail address: [email protected] (A.S. Sohal).
Table 1 Traditional vs self-managed teamsa Characteristics
Traditional
Self-managed work teams
Tasks Skills Roles Control Work effort Supervision
Rigid Specialised Fixed Individual Divided Outside of group
Flexible Multi-skilled Interchangeable Group Cohesive Within the group
a
From Attaran & Nguyen, 1999, p. 25
by the British Social Scientist ‘Eric Trist’ (Attaran and Nguyen, 1999, p.24; Beckhman, 1998, p.49). Companies such as Toyo Ink in Kilsyth, Victoria, Australia (Robbins et al., 2000, p.516); Australian Water Technologies Pty Ltd, Australia; ICI Villiawood (Davidson and Griffin, 2000, p.684, 671); Hospital For Special Care (HSC), Connecticut (Blejwas and Marshall, 1999, p.14); Quarker Oats, Danville, IL (Morris, 1999, p.57), Thrall Car Mfg. Company, Cartersville, Georgia (Kuvin, 1998) and Chevron Western Production Business Unit, California (Attaran and Nguyen, 1999) are living examples that have experienced increased profits,
0166-4972/02/$ - see front matter 2002 Elsevier Science Ltd. All rights reserved. doi:10.1016/S0166-4972(01)00114-6
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cost savings and improved morale by introducing selfmanaged and cross-functional work teams. Other main advantages of using self-managed teams include “reduction in labour costs and lower maintenance costs” (Chaneski, 1999, p.52); and “more effective use of resources and enhanced individual problem solving skills” (Cartmell, 2000, p.40). The achievement of these benefits by a company only having people ordained with rare and mysterious qualities that cannot be learned by others, is completely dismissed by the findings of the Collins and Porras (1994) study. The study also identified six core ideologies present within successful, visionary companies that include: 앫 strong cultures around the ideology; 앫 selection of senior management based on fit with a core ideology; 앫 attainment of more consistent alignment with a core ideology in such aspects as goals, strategy, tactics, and organisation design; 앫 focus on continuous improvement and teamwork; 앫 serve the customer above all else; and 앫 promote ‘trust’ and respect for the individual. Recent research findings from Australia also show that unity of purpose and the elimination of barriers between departments (i.e. a cross-functional team approach) are the most significant predictors of organisational performance (Terziovski, 1998, p.258). Considering the findings from the literature, this paper outlines the initiatives undertaken by a long established organisation, Varian Australia Pty Ltd, a leading manufacturer of high technology instruments based in Melbourne, Australia, to identify best practice in teamwork. In particular the paper discusses the use of two types of teams — the Continuous Improvement Process Teams (CIP Teams) and the Corrective Action Teams (CATs) and how over the past decade Varian Australia learnt from their experiences. The significance of the employee–management relationship, the development of trust and the key success factors in teamwork are also identified and discussed in this paper. Earlier articles have described Varian Australia’s Value Added Management (VAM) program (Sohal, 1997); and its Continuous Improvement Process (CIP) (Sohal and Lu, 1998). The current paper focuses on Varian Australia’s experience over the past 10 years work teams.
2. Literature review The underpinning principle of Continuous Improvement (KAIZEN) is the use of various problem-solving tools by work-based teams for the identification and solution of work-based problems (Imai, 1986; Beckhman, 1998, p.48). The aim is for improvement to reach new
‘benchmarks’ with every problem that is solved. To consolidate the new benchmark, the improvement must be standardised. In many Australian firms this standardisation has been attempted via systems such as ISO 9000. Beckhman (1998, p. 49) defines a self-managed team as a “permanent self-managed group of … 5 to 10 … employees who work together to produce a product or service [and] who with additional training are able to perform management … as well as support functions”. Following are some of the responsibilities carried out by members of self-managed teams (Beckham, 1998, p. 51): 앫 set group and individual goals; 앫 assume responsibility for productivity, cost and quality; 앫 plan, schedule, control and inspect their own work; 앫 prepare their own budgets and accept responsibility for complying with the terms of those budgets; 앫 select suppliers; 앫 interview and hire new employees; 앫 coach and counsel team-mates; 앫 evaluate the performance of team-mates; 앫 monitor and control quality and safety; 앫 make major changes in their work systems or processes; 앫 order supplies, maintain inventories, and recommend new equipment; 앫 plan their own training and assume responsibility for orienting and training newly hired personnel; 앫 perform routine repairs and provide maintenance, housekeeping and troubleshooting services; and 앫 deal directly with people at all levels of the organisation. A similar definition has been given by Robbins et al. (2000, p.517) according to which a self-managed team is an “independent group that in addition to doing their operating jobs [also] take on traditional management responsibilities such as hiring, planning & scheduling and performance evaluations”. “Cross-functional skills, decision making autonomy, ready access to information” (Blejwas and Marshall, 1999, p.15), “common purpose, interdependence, accountability” (Chaneski, 1999, p. 52), “high level of trust, open climate for communication, [and] shared decision making” (Cartmell, 2000, p.39) are some of the characteristics that feature a selfmanaged team. Involving employees from different areas / departments of an organisation as a part of self managed teams brings in the benefits of sharing of information and expertise to reach better solutions. Hodson (1998, p.8) after an in-depth study of employees in different work place settings cautions managers to not make the mistake of replacing “decent standards of employment with work place teams”. The literature has also summarised a number of barriers and
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challenges accompanied and experienced by organisations when implementing teams (Chaneski, 1999, p.52,3; Beckham, 1998, p.54,5; Cartmell, 2000, p.39). 앫 The resources (time, money, people) required to train employees in team concepts need to be utilised judiously, as it not only takes the employees away from their daily responsibilities but using wrong / un-tailored training can result in wastage of these resources. 앫 Not all the areas of the organisations may require teamwork and failure to understand this can once again result in wastage (over- or under- utilisation) of resources. 앫 Many employees complain of the lack of continuous support in view of their work schedules and strict time constraints, especially from management, to remain motivated to work in teams. 앫 As with the implementation of any new system, results from self-managed teams do not come immediately and this can result in frustration, conflict and demoralisation among both the management and employees. 앫 Managers and supervisors are many times sceptical of the whole concept of self-managed teams due to the perceived threat to their power and control. 앫 The rotating leadership role in a team sometimes may not be handled by employees either due to poor leadership skills, lack of experience or even peer pressure. In some instances an employee’s previous experience and perceptions with teams can also impact the team cohesiveness, effectiveness and thus its performance. 앫 Ready access to allocated budgets and information required to complete the project/assigned tasks may face resistance from other departments in the organisation as well as from management. To address the above-mentioned challenges/obstacles, organisations are increasingly concentrating on making the best use of their internal resources, its employees in teams. Organisations are trying to address the various issues of employee resistance, which were also concluded from the Kirkman et al. (2000) study of employees in two Fortune 500 organisations and their exhaustive literature review search. The main reasons for employee resistance were found to be “violation of fairness, increased work loads concerns, uncertain managerial support, unclear role definitions, lack of team member social support, trust, cultural values and low tolerance for change” (Kirkman et al., 2000). The literature identifies various methods that could be used to maintain the effectiveness and productivity of work teams, including (Benefield, 1998, p.34; Taggar et al., 1999). 앫 Having a defined vision for the team with achievable and measurable targets.
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앫 Providing the team, as requeried, with adequate resources (time, money, training) support and guidance. 앫 Having a system in place that regularly monitors the team’s performance and assist in giving feedback to the team members both individually and as a group. 앫 Positive reinforcement: in order to get continuous results from the work teams it is essential that achievements are recognised. Positive reinforcement could be displayed by recognising specific tasks, providing special opportunities, giving awards, increasing freedom of decision-making and by providing resources that help to achieve the team’s needs. 앫 Personalising conversations with the team members either alone or in a group 앫 Presence of a leader in the team who at times may also perform the roles of a facilitator and counsellor. The effectiveness of the leader in a team was found to be directly proportional to the teams success in the study done by Taggar et al. (1999) of 480 undergraduate students in 94 leadership teams of five or six members. The case study presented below explores the practical usage of many of the above mentioned measures such as ‘motivation/positive reinforcement; presence of a facilitator; top management support; regular meeting and monitoring methods’.
3. Research methodology The case study is based on interviews and discussions conducted with employees of Varian Australia over a number of months during 2000. Initially a series of interviews were held with staff employed in the quality department, including the Quality Manager and the Quality Systems Co-ordinator. Finally a discussion session was held that lasted for approximately 1 1/2 h. Those participating in this session included shop-floor employees, supervisors and members of the Quality Assurance Team. The discussion was tape-recorded after obtaining prior consent from the interviewees and subsequently transcribed and typed. The discussions were exploratory in nature, conducted to understand the issues being currently experienced by the organisation with respect to team-based decision-making strategies. Another aim was to understand the experiences of the organisation’s employees with team-work. The key questions to be answered were: how focus on work teams is maintained over a long period of time?, what can managers do in response to a slow down in workteam activity?, and what are the interesting lessons learnt by Varian Australia from their long experience with work-teams. The initial site-visit interviews and discussions were
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converted into the case study by the researchers, as it offered the convenience of combining both ‘exploratory’ and ‘descriptive’ methodologies together. The literature also supports the usage of case study methodology as it tries to uncover the answers to a “decision or a set of decisions [for instance] why they were taken, how they were implemented and with what result” (Yin, 1994, p.12). A number of other researchers, such as Corbett and Cuttler (2000); Greenwalt (1994); Simon et al. (1994); McGuire (1995) and McCutcheon and Meredith (1993), have also supported the usage of case study methodology. Case studies thus give a holistic view of the happenings around a topic or question by going indepth (for instance as in the case of observations and interviews) by the use of “why; how; who; what and when” (Yin, 1994, p.3; Zikmund, 1997, p.38; Wallace, 1984, p.181) questions. The use of such exploratory questions during the course of interviews has been supported by a number of other researchers, including Howard and Peters (1990); Burns (1998) and Eisenhardt (1989). The exploratory and descriptive data obtained from the case studies thus assists in (Uma, 1992, p. 97): 앫 understanding the characteristics of a group in a situation of interest; 앫 thinking systematically about aspects in a given situation; 앫 offering ideas for further probing and research; and 앫 helping [in] making certain simple decisions. In alignment with the basis of case study methodology, as highlighted in the literature, the researchers preferred to use this methodology in examining workteams at Varian Australia.
4. The company Varian Australia is part of Varian, Inc., a world leader in scientific instruments and vacuum technologies. It is a major supplier of analytical instrument solutions, nuclear magnetic resonance (NMR) systems, vacuum products and services, and operates a state-of-the-art contract electronic manufacturing center. The company is an innovative team with unsurpassed experience in creating application-specific solutions for customers in the life science, healthcare, chemical, petrochemical, environmental, industrial, communications and semiconductor industries. Varian, Inc. is a truly global company, manufacturing in ten locations in North America, Europe and the Pacific Rim; operating more than 70 sales and service offices; employing some 3000 people world-wide; and selling to more than 20,000 customers annually. In its most recent fiscal year, Varian, Inc. had sales of around US$650 million. Varian Australia employs approximately 350 people at its Mulgrave, Melbourne
site with another 50 people working in other Australian states in the sales and service centres. The Mulgrave site designs and manufactures analytical instruments. This range includes three major product lines, namely atomic absorption, UV-VIS and ICP.
5. The continuous improvement process at Varian Australia Varian’s quality initiative is referred to as the Continuous Improvement Process (CIP) Program and was implemented in the early 1990s. The CIP Program’s goal is to consistently evaluate the processes of the organisation with the aim to continuously improve them to produce better products and services. This has been termed as ‘Operational Excellence’ by the company and includes accomplishment of following five goals (www.osi.varianinc.com/quality/cip/cip.htm): customer focus in all that [Varian does]; fast time to market; unbending commitment to quality; superior organisation and teamwork and fast flexible operations. Prior to the implementation of the CIP Program management trialled a number of quality initiatives in the 1980s. For example, the Juran approach to quality improvement was examined with the help of a consultant who provided some training by means of a series of videos and Juran training material. However, much of the training was directed at solving problems and it was felt that these off-the-shelf training packages were not effective in delivering a change in culture throughout the organisation. The Continuous Improvement Process (CIP) program was started in early 1992 and has been a most effective quality program for the organisation. By implementing the CIP initiative Varian Australia has been able to develop as a quality organisation. This initiative has provided effective training, control and monitoring of quality improvement activities and a particular focus on quality in all that is done. Some strengths of the CIP approach were: 앫 focus on satisfying both external and internal customers; 앫 driven by a formal Quality Council, rather than the Quality Manager; 앫 formation of natural work teams as the principal vehicle for continuous improvement (as distinct from cross-functional teams whose specific objectives are to solve problems); 앫 emphasis on getting runs on the board’ for small projects involving daily work; 앫 train-the-trainer’ concept, through to shop floor; and 앫 supports Varian’s global business goals. Varian Australia began by identifying the specific needs to be addressed by the CIP program. Key areas
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identified included team building, process improvement and problem solving skills. The company sought the help of a local consultant to initiate the CIP program and deliver the initial training material. A Vision Setting Workshop was held for senior managers, at which the strategy to achieve the goal of becoming the ‘supplier of first choice’ was discussed. Further courses were held to provide training for other managers and to facilitate implementation planning. One outcome of these activities was the appointment of a program manager to oversee the CIP program. Another outcome was the appointment of internal trainers to conduct further training within the organisation. The Quality Council was established to oversee the CIP Program as well as other areas of quality management within the company. Members of the Quality Council included the Managing Director and other senior managers, and the Quality Manager.
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their goal. Progress made by each CIP Team was reviewed every 6 weeks by both the CIP Program Manager and the Quality Council. CIP Teams were instrumental in addressing process problems. It was estimated that CIP Teams resolved all but 200 of the more than 2000 problems identified during 1992 and saved the company many thousands of dollars. CIP Team success stories were published in company newsletters outlining team objectives, solutions developed and the savings made. Monetary rewards were offered to teams that had successfully made improvements. Other forms of recognition for team achievements include storyboards displayed on noticeboards for each team and quarterly team presentations to the Quality Council. Internal quality perception surveys were also conducted every 6 months that showed a high level of satisfaction with the CIP Program. 5.2. Maintaining the CIP program
5.1. CIP teams When the CIP program was first initiated, all the employees were given approximately 12 days of training. All new employees still go through this training, however, now initially in only half a day and subsequently completed over a period of few months. This CIP training is in addition to the employee induction– training program received by all new Varian employees. This training covered topics such as Brainstorming, Decision Making, Communication and Quality tools such as Flow Charting and CEDAC Charts. Several staff were also trained as trainers and facilitators. It is estimated that the initial training amounted to over 9000 h. All employees within the organisation were required to become a member of a CIP Team. At present, however, this process is voluntary, with the teams becoming crossfunctional in work areas. The total number of CIP teams has reduced from 50 (based on their individual management projects) in 1992 to seven in the year 2000. The currently operating seven teams are: U V Cary; Network Assistance; Purchasing Invoice Query Reduction; Fabrication Engineering Support; CNC Lathe; Machine Shop Quality; and Marketing Information Distribution. Teams worked both on product related problems in their work area as well as the implementation of other improvement initiatives to their particular area of work and met weekly to monitor their progress. The frequency of team meeting however varied from weekly to monthly, depending on the requirements of the team. The team members typically meet on the shop-floor and discuss problems, as CIP teams works in repetitive taskbased areas. Each CIP Team had a sponsor, typically a person from middle management, who acted as a link between the CIP Team and senior management. The role of the sponsor is not to provide direction but to clear any road blocks the team finds when progressing towards
CIP Teams functioned successfully within the organisation until around 1996 when they quickly died out. One major cause of this was that by this time all the major problems had been easily identified and tackled and only the small, difficult problems were left. There needed to be a change in the program for these problems to be successfully resolved. For almost 1 year there was little activity by CIP Teams. Because of the history of improvement initiatives at Varian Australia, its workforce was already accustomed to accepting new programs. However, some experiences from previous attempts did little to create enthusiasm for the CIP program. The net effect was an attitude of disinterest on some people’s part. Another problem, that contributed to the failure of the CIP, was the lack of response from the Quality Council to suggestions made by some operators. There was also a perceived threat to supervisory and managerial roles and, as indicated in the literature, one of the factors to be cautioned by managers. Team members also found that some problems which needed to be solved were outside their team’s scope. During the course of recent interviews, according to its shop-floor workers, the failure of CIP teams could be linked to its large size (12 or more in a team), lack of experience of team members to set objectives and targets and the time and money spent in weekly meetings without many teams reporting tangible results leading to frustration; the fact that the sponsor of the team was initially himself on a learning curve added to further communication gaps. As a result, the employees could not clearly understand the purpose of CIP teams, leading to their withdrawal from them. In mid-1997 there was a complete turnover of staff within the Quality Department. A new Quality Manager was appointed. This is a person who had previously worked for Varian in the Technical Support Department.
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In addition, a Quality Systems Coordinator was also appointed, a position that had been vacant for nearly a year. Under the direction of the new Quality Manager and the Quality Systems Coordinator the CIP program was re-charged in September 1997. A new structure for CIP was developed using elements from the previous program and incorporating new ideas suggested by various employees at Varian. These employees included staff from various levels of the organisation as well as shop-floor employees. A more rigid structure was introduced to best capture ideas and maintain the momentum of the new program, in addition to making the participation in teams voluntary for employees, as opposed to previous mandatory requirements. By 1997, the Quality Council established in 1992 had dissolved and the new structure included a Steering Committee that is now responsible for the ongoing success of CIP and for ensuring that the CIP Program is operating effectively and in line with the company’s goals. The steering committee has three permanent and three rotating members who meet every 6 months to monitor CIP team targets and progress. One of the goals of the CIP development group was to implement a process that would increase team resource, skills and productivity. Under the new structure teams are only formed where there is a genuine need. The teams are formed using the people that are interested in and have the skills required in making the improvements. This now meant a change from work flow teams to cross-functional teams. This maximises the productivity of the teams. The teams are disbanded after the process improvement has been implemented and reviewed. A mechanism for team reward and recognition was also improved on by the Steering Committee. All teams are eligible for consideration for the Encouragement Award. This is a $50 award paid to all members of the CIP Team who make any contribution to the Profit and/or Growth of Varian Australia through the CIP Program. These awards are presented when the team has reached its goals. The Exceptional Contribution Award Program (ECAP) has also been established to award those team members that have achieved improvements beyond management expectations. An ECAP award is nominated jointly by the Quality Manager and the Quality Systems Coordinator to the Senior Management Group and the Managing Director. At the discretion of this group, a financial payment above the Encouragement Award ($50) is made to each member of the CIP Team. One example of this was a CIP Team that saved the organisation in excess of $60,000 per annum by improving the test equipment calibration system. An annual Quality CIP Award was also created in 1997. This is awarded to a CIP Team that makes the most significant contribution to Profit and/or Growth of Varian Australia. Both the Encouragement Award and the Annual Quality Award are presented to all members
of the CIP Team, including monthly-paid (staff) employees. CIP Teams are continued to be recognised through articles in the Corporate Newsletter and on noticeboards placed throughout the Manufacturing area. The above-mentioned awards have continued to motivate Varian employees, especially at the shop-floor, to remain involved in teams and make improvements. According to its workers it is not the amount given in the award, which is important, but the recognition, encouragement and personal satisfaction of being a part of the organisation’s success. In the year 2000 employees still use the techniques first learnt in the CIP training program nearly a decade ago. Improvements can be seen, not only in improved quality and introduction of new products, but also in employee’s interpersonal skills such as communication and leadership. 5.3. CATs CATs were established at the same time as CIP Teams. CATs work to solve specific product related problems that are found internally through the problem reporting process and those problems raised externally through the Technical Support department. Members of CATs include representatives from Marketing, Production, Technical Support, R&D, Production Engineering and Quality. There is no permanent involvement from shop-floor employees, although these employees are invited and are involved in solving specific problems. Initially, the input to CATs meetings were internal problems (particularly those that could not be solved by the CIP Team), but they quickly moved onto solving other problems identified from worldwide field reports received through electronic mail. A CAT was established for each of the product lines and has a permanent leader who is appointed by the Quality Manager. CATs meet once a week and their main focus is on solving problems related to products, whereas the focus of CIP Teams is on solving process related problems. Although there was no CIP Team activity during 1996, CATs have continued to function successfully since 1992. CAT outputs are not formally evaluated, but their activities are monitored by relevant management personnel, including the Technical Support Manager and the Research & Development Manager.
6. Discussion This paper has presented the experiences of employees at Varian Australia, over a period of 10 years, with work-teams, the challenges faced by them during the process and the benefits received from working in teams. The major difference in the new approach to the CIP Program at Varian Australia is that whereas previously each employee was required to become a mem-
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ber of a CIP Team, membership is now voluntary. Enthusiastic employees are now identified and asked to become members of a CIP Team. CIP Teams have six or seven members and are often cross-functional teams. CIP Team leaders are selected on the basis of their communication skills. They need to be outspoken, but not dominating. They must be able to guide the CIP Team in completing an improvement project. Each CIP Team has a sponsor to ensure that resources are available to complete the project. They also aid the CIP Team leader in guiding the team towards their goal. Projects for improvement are now identified on the basis that the processes involved directly link to the organisational goals. A Steering Committee now exists that oversees all CIP Team activities. This Steering Committee is made up of production managers and personnel from the quality department, including the Quality Manager. The Steering Committee meets once a month to review the CIP Teams and suggest projects for new teams to work on. All new employees are provided with a 4-h CIP training session. Refresher training is provided to all CIP Team members by the Quality Department on a ‘as needs’ basis. Rather than presenting to the Quality Council, outcomes of CIP Team projects are now jointly reviewed by the Quality Manager and the Quality Systems Coordinator. The Manager and Senior Manager of the work area are invited to the review. Financial awards are now given as appropriate, based on the savings made. Currently (2000), there are seven CIP Teams functioning within Varian Australia. CIP Teams now develop their own charter and identify priorities and limitations. A goal and time frame for completion of the project is set at the beginning of the process to provide structure for the group, however, these are revised as required. Teams are currently operating both in the manufacturing and the administration areas and there are plans to further increase employee participation in CIP Teams in all parts of the company over the next few years. The desire to have successful teams operating throughout the organisation is balanced with the actual need for improvements to be made. 6.1. Lessons learned Senior management at Varian Australia believe that CIP Teams and CATs played a significant role in making continuous improvement to products and operations in the first half of the 1990s. These teams allowed ‘just-intime’ performance to be achieved, improved the efficiency of the processes of the organisation and reduced installation and warranty costs in the field. The major reason for the slow down of the CIP Program and the CIP Teams was due to the perception amongst team members (and to some extent management), that whilst the CIP Program had been successful in solving the
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major problems, it was not suitable in its current format for tackling the smaller and hard to define problems. As a result, many team members had little to contribute to their teams. Varian Australia’s experiences with teams over a 10-year period provide a number of interesting lessons. 1. Varian Australia has found that voluntary, cross-functional teams are more effective than compulsory membership, as people are motivated to work towards their goals and better understand the processes. 2. For a team to achieve success, it must have a clear goal and a target completion date. Without a proper time-frame and clear goals teams are likely to lose focus. 3. Teams are only formed when there is a real need identified for improvement. Varian Australia has found that a continuous improvement program only works successfully if teams have real goals to work towards that are linked to the organisational goals and targets. 4. Problems to be solved by teams must be within the capability of the team members. Varian Australia found that teams that were given projects beyond their capability resulted in team members becoming disinterested and distrustful of the CIP Program. 5. Each team must have a sponsor who can work closely with the team and provide direction. The person must have knowledge of CIP tools and must be committed towards achieving the goals of the team. 6. The Steering Committee has proved an important part of the CIP Program at Varian Australia. It was formed to focus on the CIP Program and has over the past 2 years been the driving force behind the CIP Program.
7. Conclusion This paper has analysed the experiences of Varian Australia with respect to process and product improvement teams (CIP Teams and CATs, respectively). Senior management at Varian Australia sees teamwork in all areas of the organisation as an important part of its continuous improvement strategy to stay ahead of its competition. Varian Australia is able to sustain their efforts to continuously improve products and processes by persisting with cross-functional teams. Varian Australia’s culture changed over several years from ‘unstructured, individualistic, throw it over-the-wall attitude to problem-solving and decision making’, to a predominantly ‘participative problem solving and decision making culture using a team approach’. Based on our qualitative findings from the Varian Australia experience, it is reasonable to conclude that process and product improvement teams are the foun-
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dation upon which a continuous improvement culture can be developed in an organisation.
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Dr Amrik S. Sohal is a Professor in the Department of Management and Associate Dean (Research) in the Faculty of Business and Economics at Monash University, Melbourne, Australia. He is also Co-Director of the newly formed Australian Consortium for Effective Organisations (ACEO). From 1991 to 2000, Professor Sohal was Director of the Quality Management Research Unit and from 1993 to 1997 served as an Associate Dean (Research Development) and Associate Dean (Graduate Teaching) for the Faculty of Business and Economics at Monash University. He holds a PhD in Manufacturing/Operations Management from the University of Bradford Management Centre in the UK, as well as a BEng (Hons) and an MBA, also from the University of Bradford. Professor Sohal is Associate Editor for the journal Technovation and Asia Pacific Editor of the International Journal of Quality and Reliability Management. He is a member of the Editorial Board of a number of journals in the area of quality management, technology management and operations management. Professor Sohal has authored or co-authored over 100 papers published in refereed journals, as well as three books and a number of chapters contributed to books. His current research interests are in manufacturing/operations strategy, technology/information management, quality management, supply chain management, lean/agile production systems and electronic business. He has received grants from the State and Federal Governments, the Australian Research Council and Monash University.
Dr Mile´ Terziovski commenced his career with CRA-RTZ Ltd. as a Trainee Mechanical Engineer. He has held various positions in production, maintenance, and project management over a period of 17 years. He obtained his PhD in Business Management from the Melbourne Business School, The University of Melbourne. Dr Terziovski is the Director and Deputy Chair of the European Australian Co-operation Centre (EACC) at The University of Melbourne. He teaches Organisational Innovation and Quality Management at undergraduate level and Strategic Management at Masters level. Dr Terziovski has presented papers in the Operations Management stream of the Academy of Management and had an all-Academy best paper nomination at the 2000 conference. Dr Terziovski was recently invited by the President of The Republic of Macedonia to participate on an e-Commerce Advisory Committee chaired by the President.
A.S. Sohal et al. / Technovation 23 (2003) 349–357 Ambika Zutshi is currently completing a PhD in the Department of Management at Monash University, Melbourne, Australia. Her previous qualifications include a Bachelor’s degree in Environmental Studies and a Master’s degree in Environmental Management. Her current research is focused on the examination of the role of various stakeholders in the planning and implementation of Environmental Management Systems. Ambika’s professional training includes the completion of ‘Implementing an Environmental Management System’ course and is currently completing the practical training towards the “Environmental Systems Auditors’ course”. She also works as a Research Associate and as a Lecturer/Tutor at various institutions in Melbourne and has articles forthcoming in the Business Process Management Journal and the International Journal of Environment and Sustainable Development.
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