GDR Construction ‘This is not going to be like last time. Then, we were adopting an improvement programme because we were told to. This time it’s our idea and, if it’s successful, it will be us that are telling the rest of the group how to do it.’ (Tyko Mattson, Six Sigma Champion, GDR)
Tyko Mattson was speaking as the newly appointed ‘Champion’ at Geneva Construction and Risk Insurance. He had been charged with ‘steering the Six Sigma programme until it is firmly established as part of our ongoing practice’. The previous improvement initiative that he was referring to dated back many years to when GDR’s parent company, Wichita Mutual Insurance, had insisted on the adoption of total quality management (TQM) in all its businesses. The TQM initiative had never been pronounced a failure and had managed to make some improvements, especially in customers’ perception of the company’s levels of service. However, the initiative had ‘faded out’ during the 1990s and, even though all departments still had to formally report on their improvement projects, their number and impact was now relatively minor.
History: The Geneva Construction Insurance Company was founded in 1922 to provide insurance for building contractors and construction companies, initially in German-speaking Europe and then, because of the emigration of some family members to the USA, in North America. The company had remained relatively small and had specialized in housing construction projects until the early 1950s when it had started to grow, partly because of geographical expansion and partly because it moved into larger (sometimes very large) construction insurance in the industrial, oil, petrochemical and power plant construction areas. In 1983 it had been bought by the Wichita Mutual Group and had absorbed the group’s existing construction insurance businesses. By 2000 it had established itself as one of the leading providers of insurance for construction projects, especially complex, high-risk projects, where contractual and other legal issues, physical exposure and design uncertainty needed ‘customized’ insurance responses. Providing such insurance needed particular knowledge and skills from specialists including construction underwriters, loss adjusters, engineers, international lawyers and specialist risk consultants. Typically, the company would insure losses resulting from contractor failure, related public liability issues, delays in project completion, associated litigation, other litigation (such as ongoing asbestos risks) and negligence issues. The company’s headquarters were in Geneva and housed all major departments including sales and marketing, underwriting, risk analysis, claims and settlement, financial control, general administration, specialist and general legal advice, and business research. There were also 37 local offices around the world, organized into four regional areas: North America, South America, Europe Middle East and Africa, and Asia. These regional offices provided localized help and advice directly to clients and also to the 890 agents that GDR used worldwide. The Previous improvement Initiative When Wichita Mutual had insisted that GDR adopt a TQM initiative it had gone as far as to specify exactly how it should do it and which consultants should be used to help establish the programme.
Tyko Mattson shakes his head as he describes it. ‘I was not with the company at that time but, looking back, it’s amazing that it ever managed to do any good. You can’t impose the structure of an improvement initiative from the top. It has to, at least partially, be shaped by the people who are going to be involved in it. But everything had to be done according to the handbook. The cost of quality was measured for different departments according to the handbook. Everyone had to learn the improvement techniques that were described in the hand- book. Everyone had to be part of a quality circle that was orga
Continuous Improvement – The continuous improvement of the system management and its employees increase the productivity of the whole company leading to stability in sales and profit. Through TQM, employees will be more improved in terms of skills and knowledge regarding their work, and improvement in performance develops their work ethics, improves the quality of products, creates an environment encouraging teamwork, and respect for one’s abilities.
Multifunctional Teams – This is beneficial for the division of labor in a company, in solving conflicts and problems in terms of production, human resources and other aspects. It allows the problems and requirements of each component to be passed on at worker level, throughout the company, leading to a better understanding of the employees on system processes.
Reduction in Variation – This can be achieved by documenting systems, and giving the employees the opportunity to own processes by allowing them to try on doing the process. In this way, the employees can get the feel of doing the job and maintain the standards of the system of the company.
Supplier Integration – Involving suppliers directly with the employees allows two-way communication, and any problems that arise can be solved jointly, by using their knowledge and expertise, and their involvement prevents waste through returned goods for the supplier.
Education and Training – Through education, management and employees are given the tools to achieve all of the mentioned benefits, for education provides for guided innovation from all levels, while training, which is a cost, shows a commitment by management of individual employee self-management, and total quality management.
Credit:ivythesis.typepad.com
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