Page 500 - Operations Strategy

case study 17 • turnround at the Preston Plant 475

out of the crisis

In spite of their trauma, the plant’s management team faced Christmas of 2000 with
increasing optimism. They had just made a profit for the first time for over two years. By
spring of 2001 even HP, at a corporate level, was starting to take notice. It was becoming
obvious that the Preston Plant really had made a major change. More significantly, HP
had asked the plant to bid for a new product. April 2001 was a good month for the plant.
It had chalked up three months of profitability and HP formally gave the new contract
to Preston. Also in April, Rendall reversed its decision to close the plant.

Questions

1 What are the most significant events in the story of how the plant survived because
of its adoption of quality-based principles?
2 The plant’s processes eventually were brought under control. What were the main
benefits of this?
3 SPC is an operational level technique of ensuring quality conformance. How many
of the benefits of bringing the plant under control would you class as strategic?

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