1991 Ad

Business America, Oct 21, 1991

In 1987, Marlow Industries set out to improve a manufacturing and service operation that did not seem to need fixing. Founded in 1973, the Dallas-based company increased its share of the world market to more than 50 percent for customized thermoelectric (TE) coolers -- small, solid-state electronic devices that heat, cool, or stabilize the temperature of electronic equipment.

But Marlow chose not to sit tight. Instead, it initiated a structured, yet evolving system of continuous improvement through Total Quality Management, setting ever higher performance standards and challenging itself to exceed ever more demanding customer requirements. The company has worked to strengthen all areas of its business, and again to set new targets for improvement and innovation.

Since 1987, employee productivity has increased at an average annual rate of 10 percent, the time between new product design and manufactured product has been trimmed, and the cost of scrap, rework, and other non-conformance errors has been cut nearly in half. For customers, these and other gains have translated into products that exceed performance specifications by wider margins, on-time deliveries, extended warranties, and prices that have remained stable or decreased. Not coincidentally, Marlow Industries' worldwide market share continues to improve, even in Japan where the company has local competition.

Marlow at a Glance

Marlow Industries is fully vertical integrated. The company processes raw materials into thermoelectric semi-conductors, assembles these devices into TE coolers, and integrates the coolers into heat exchangers for commercial and defense applications. Manufacturing operations consist of three materials "minifactgories" and five assembly minifactories organized by market segments. Each is staffed by about 15 employees cross-trained in several jobs and directed by a supervisor, who is empowered to make decisions affectfing all facets of production within his or her minifactory.

Commercial customers include makers of laser diodes, such as those used in fiber-optic communication systems, as well as medical instrumentation manufacturers. Marlow products also are used in heat-seeking missiles, inertial navigation systems, satellites, and other defense and space-related technologies.

Started in 1973 as a five-person operation, Marlow Industries now employs 160 people and has total annual sales of $12 million. Exports account for 15 percent of annual sales.

Although the company earns most of its revenues from sales of TE coolers designed to meet one-of-a-kind customer needs, Marlow Industries has set its sights on applying its Total Quality Management philosophy to enter new markets.

TQM System

Marlow describes its Total Quality Management System as a "top-to-bottom approach to continuous improvement. The emphasis on quality begins with CEO and President Raymond Marlow. As chairman of the TQM Council, which crafts the company's five-year strategic business plan and oversees efforts to accomplish short- and long-term goals, he has daily responsibility for quality-related matters. A senior-executive team headed by the chief operating officer attends to day-to-day management. Marlow's leadership has provided an environment that encourages all employees to participate and to be involved in the continuous improvement process.

Employee involvement is fostered through a flat organizational structure and a variety of participatory mechanisms. Marlow includes worker representatives in weekly TQM Council sessions. Monthly company-wide meetings are held to review company performance, recognize employees for quality contributions, review quality values, and make widespread acknowledgement of teams.

In 1990, 88 percent of all personnel -- as compared with 44 percent in 1988 -- participated on "action teams," which focus on attaining corporate and departmental goals, or on "employee effectiveness teams," which concentrate on preventing potential problems in specific work areas. Each team has a senior-executive mentor, and all teams regularly make formal presentations before the TQM Council.

All workers -- from CEO to hourly employee -- have taken Marlow's voluntary "quality pledge," committing them to the same performance standard: "Do it right today, better tomorrow." Training programs, averaging 32 hours a year per employee, impart the skills needed to achieve the standard. All workers, even temporary employees, receive quality-awareness training, and the entire permanent work force has completed initial courses in statistical problem solving. Three-fifths have undergone the second round of more comprehensive training in the use of quality tools.

An information system consisting of 500 data categories describes all essential elements of company performance -- from customer satisfaction to manufacturing process control to supplier quality -- and helps Marlow Industries set tangible goals and track its progress. Much of the data can be accessed through any of the 80 personal computers connected through a local area network. Systematic data cross-checking fosters reliability and consistency, and regular reviews ensure that the information supports effective management of the company.