“Quality Makes the Difference”

Texas Nameplate Co., a manufacturer of identification plates for equipment, had been in business since 1946, but annual sales and profits had been stagnant for some time. What’s more, the Dallas-based company had a bad habit of ignoring problems — such as a request from key customer General Dynamics to implement statistical process control (SPC) methods. Thinking that SPC was for “the big boys,” CEO Dale Crownover filed the request in the trash can, and General Dynamics pulled the plug on Texas Nameplate as a supplier.

But Crownover reconsidered — and the status quo was not good enough.

Crownover’s first move was to win SPC certification and regain General Dynamics’ business. Though Crownover embraced SPC “reluctantly,” there was a payoff: Overruns decreased by 40%. Encouraged, he launched a total quality management (TQM) initiative and embraced a philosophy of “zero defects.”

“What it led to was learning to do it right the first time. Becoming more efficient became the new goal,” says Crownover. He talked to workers in every department, asking what could be done to stamp out defects.

Results were fast: In just three months, Texas Nameplate sliced its rate of defects in half — from 10% to 5%.

Next, Crownover entered his company in contests — not seeking accolades, but inexpensive advice. For a small application fee (about $500 to $1,500), a panel of business experts reviewed the company, identifying strengths and weaknesses.

The commitment to quality paid off. Annual sales exceeded $4.2 million in 1997, up from about $2 million in 1994. Net profits tripled during the same three-year period.

Performance Pays

Things were going so well that in 1997 Texas Nameplate had a unique problem — extra money.

Crownover’s solution: a gain-sharing plan tied to performance. Any time employees achieve a perfect day (less than 5% total defects), they receive a portion of the day’s billings. The result is a quarterly distribution of about $45,000, which, divided equally among the 66 workers, boosts monthly paychecks by about $225.

The gain-sharing program led to even more progress. Today rejects are less than 1%, customer complaints are less than 1%, and cycle time has been reduced from 28 days to 10 days.

The icing on the cake: Texas Nameplate won the Malcolm Baldrige National Quality Award in 1998 — the smallest company to ever do so.

Beyond the Baldrige

Certified for ISO 9002 (quality standards) in 1996, Crownover aims to be the first in his industry to achieve ISO 14000 (environmental standards).

Toward that goal, Texas Nameplate is developing a process to recycle ferrous, a waste product from its chemical-etching process, and turn it back into ferric chloride, reducing pollution and saving on supplies. Fiscal savings from environmental efforts will be put in employees’ retirement plans.

“Anybody can make a good nameplate. It’s all the things you do in between that make you different,” concludes Crownover.

Peer Contact: Dale Crownover

Writer: TJ Becker