Partnerships for quality: a Philippine experience

摘要

Ebara Benguet, Incorporated (EB I) is a joint venture company between Japanese and Filipino investors, established in March 1991. The Company produces stainless steel castings and casted components for pumps and pump systems for local and foreign markets. Just a few years from start of operations, its relationship with the militant union deteriorated amidst a worsening business situation. Labor-management relations became more confrontational, characterized by mutual distrust and suspicion. Negotiations for a collective bargaining contract were protracted, eventually culminating in a crippling strike in mid-1997. As the Asian financial crisis worsened in the late '90s and the market for its products shrank, the Company found itself in a life-threatening situation. Hemorrhaging by yearly losses in the millions (almost Php 80 million in 1998; 1 USD = 45Php), Ebara's problems stemmed from high rates of product rejections, exacerbated by intermittent disputes and wrangling between a radical union and a harassed management, among others. Quality was amiss, not only in the products but more so with the work relationships, and in a highly competitive global market, this made the situation more critical, with business viability put on the line. At the turn of the decade, EBI, Phil. was at the brink of either closure or plant relocation to China. How to arrest its rapid deterioration and infuse some hope in the company's bleak future - were among the initial questions and challenges tossed by the President to an external consultancy group, in early 1999. Partnerships for Quality, Productivity and Profitability (PQP{sup}2) was the intervention program recommended and carried out. PQP{sup}2 focused first on fostering internal and external partnerships: between management and workers, and between the company and its suppliers, buyers, investors and other stakeholders. Major activities included: Phase I-Series of dialogues between the consultants, management and representatives from labor; Phase II-Strategic Planning for Quality and the organization of the Quality Steering Committee; Phase III -Promotion of PQP{sub}2 company-wide, with training on problem-solving techniques, teamwork, principled CBA negotiations, etc. plus activation of the Quality Improvement Teams; Phase W-Evaluation of the company situation utilizing agreed parameters. Three major parameters utilized to measure change were (a) production volume; (b) rejection rate by weight and (c) profit-and-loss statement. Recent developments as documented in company reports, showed that production volume for 1999 which was 288 metric tons (MT) had increased to 347 MT by year 2000 and is expected to double by end of 2001. Rejection by weight was 11% in 1998, but had decreased to 8.4% in 1999 and to 6.4% by end of 2000. From an actual loss of Php 79.6 million in 1999, this was significantly reduced to Php 11.3 million by the end of year 2000. The first quarter of year 2001 showed a turn-around as the bottom line already registered positive. Although other factors could have contributed to the business turn-around, what directly precipitated the improvement process were the PQP{sup}2 activities. Time will tell if the strategy of "partnerships for quality" will lead to sustainable recovery, although at this point, EBI looks poised to rejoin the ranks of world-class competitors in its business.