MANFIELD COATINGS CO. LTD.: QUALITY MANAGEMENT AS THE WINNING FORMULA

Introduction

Manfield Coatings Company Limited (Manfield) was a niche player in the paint and coatings industry, producing customised industrial coatings for various industrial products such as toys, mobile phones, TV cabinets, washing machines, etc. As a supplier to manufacturers of such products, Manfield had to meet not only stringent safety and quality standards but also customers’ requirements for short production lead-times. To meet such demands, Manfield had developed a quality management structure that delivered its core value of “Prompt and Reliable” supply and service.

In recognition of its commitment to quality, the Company gained ISO 9001 certification in 1997, received the Certificate of Merit in the Hong Kong Industry Department’s Quality Award in 1999, was awarded Q-Mark Licences from the Q- Mark Council from 2000 onwards, and was awarded the Certificate of Merit in the Hong Kong Management Association’s Quality Award, the 2000 version of ISO9001 and the Encouragement Award of China National Quality Award in 2003. But Mr. Yuen Shu-Wah, Manfield’s founder and Managing Director, was not resting on his laurels. In 2003, Manfield submitted an application for ISO14001, and approval was pending.

Manfield Coatings: Stressing Quality from Day One1

Yuen was a chemical engineer by training. Before establishing his own company, he worked for a UK paint company, where he learned to become an expert in paint. By the early 1980s,

Yuen saw that there was demand in Hong Kong for high-quality paint that could support local production. And at one point, he convinced his employer to build a plant in Hong Kong. However, the UK firm eventually changed its mind. So, in 1982 Yuen quit and started Manfield Industrial Company, the non-limited forerunner of Manfield Coatings Co. Ltd., with just HK$200,000 (US$25,000) and five people (including Yuen himself). The limited company was incorporated in 1986.

Manfield’s first customers were in the toy-manufacturing industry. With Yuen’s expertise, Manfield was able to meet the customers’ colour and quality specifications, and the relevant safety standards, exactly (customers in the toy industry generally followed the European EN71 or the American ASTM standards regarding the heavy-metal content of its products).

Yuen commented, “While we have to be competitive, price-wise, we never really compete on price.” Even when its paint was used on inexpensive products, Manfield was still adamant about quality. Given such tenacity regarding quality, Manfield soon established a reputation for quality and professional service, and its customer base also expanded to include manufacturers of electronics and kitchenware, which set very high standards.

Under Yuen’s leadership, the Company continued to expand.  However, during the heydays of the Hong Kong economy in the mid-1980s, Yuen experienced great difficulty in hiring staff. As he recalled, “For almost a year we had an ad running in the Hong Kong newspapers, seeking non-experienced labourers to be trained as colour-matchers. Only 10 responded, of whom only four reported for duty. All of those four left within a few days to take other jobs!”

In 1986, a factory was opened across the Chinese border in Shenzhen, with only semi- processing capabilities and a limited capacity. It took time to gradually train up the workforce, expand the capacity and capability, and instil a quality culture in the Shenzhen facility.

Nonetheless, when most of Yuen’s customers also moved their manufacturing plants in early to mid-1990s, Manfield was well established to serve them. By 1995, the combined workforce of Manfield in Hong Kong and its production arm in Shenzhen reached 480, and its annual turnover was in excess of HK$150 million (US$19.2 million). That year, Yuen was awarded the Hong Kong Young Industrialist Award.

Also Read - Quality Management Assignment Help

Embarking on the Road to Quality Management

While most of Manfield’s customers were in Hong Kong or Mainland China, the Company’s products were sold all over the world. As competition among manufacturers became keener, their demand to their suppliers, in turn, got higher as well.

As Yuen recounted, “In the old days, customers would be satisfied with a five-to-seven-day order lead time; soon they started asking for shorter lead-times.” By the mid-1990s, Manfield was able to achieve an order-to- delivery lead-time of three days, but customers were still demanding even shorter lead-times.

In 1996, Yuen attended the Chiang Foundation Manufacturing Leadership Training Programme held at the University of Southern California in the United States. At the time, Yuen realised that Manfield was having similar problems to those that Chrysler (one of the biggest car manufacturers in the US) once had, e.g., a lack of co-ordination between functional departments and an inability to respond quickly to challenges.

Yuen knew that Manfield needed to be “big and efficient”. He also learned how United Parcel Services handled 11 million packages, offered a 24-hour worldwide delivery guarantee and provided customers with information about the real-time status of each delivery. He realised that “big and efficient” was achievable, though it required good planning, determination and commitment. Upon his return, Yuen immediately discussed this with his senior management, and the decision was made to embark upon the road to quality management.

The first goal was to become ISO 9001-certified. Soon afterwards, outside consultants were hired to provide training and to set up a quality management system. This, fortunately, was backed by Manfield’s continual investment in and use of management information systems. Nevertheless, “unless the mindset improves, we can never make real achievements,” said Yuen.

Thus, significant emphasis was placed on training. For one thing, managerial staff members were expected to effectively carry out managerial duties such as planning, organisation, human resources allocation, command and control [see Exhibit 1 for the complete training programme for managerial staff].

For another, training and education for all employees had to be comprehensive, i.e., not only did it have to include job-specific and related training, it also had to communicate Manfield’s value system and way of thinking. Later in 1997, Manfield was audited and successfully certified for ISO 9001 (version 1994). The same year, the motto “Prompt and Reliable” was made the centrepiece of Manfield’s service strategy.

In real terms, Manfield made significant progress in enhancing productivity. To Manfield, productivity enhancement was achieved by leveraging cost controls very effectively in order to maximise value creation. To its customers, the greatest value was speed. Previously, a one-day order-to-delivery lead-time was nearly unattainable.

In the second half of 1997, Manfield successfully fulfilled 222 one-day orders, compared to only three in the first half of the year. For two-day orders, the number fulfilled rose from 79 in March 1997 to 459 in December 1997.

The average monthly rate for delayed deliveries fell from 15.15 per cent in 1996 to just 1.68 per cent in 1997. These achievements did come with some degree of trade- offs in production costs. Such trade-offs, however, were carefully evaluated and were done without compromising the value to customers or employees’ salaries and benefits.

Also Read - Operation Management Assignment Help

Quality Management at Manfield Coatings

In the ensuing years, Yuen continually pitched the Company against audits and examinations through award applications. According to Yuen, this achieved two purposes: first, it helped them see areas of weaknesses where they did not normally see; second, it created a further drive for all staff to improve their performance and attain their targets. In the process, the quality management system at Manfield took shape. (The major milestones in Manfield’s road to quality management are listed in Exhibit 3.)

Leadership

Yuen understood well that the drive for quality had to come from the top. He expected and encouraged his managers to be innovative, whilst carefully assessing the associated risks.3 To facilitate discussions among managers, a breakfast room was set aside for managers only. However, to foster an open environment, there was only one common lunch room for all levels of staff. Various types of training (management, quality, etc.) were also provided to managers in a purpose-built training room.

Human Resources

Staff members were an indispensable part of the quality system. To ensure that they understood their roles and responsibilities well, specific job specifications and job descriptions were provided. The progress of individual skills and abilities was monitored by skill tables. Training programmes for employees were mostly customised, and were provided or facilitated by internal staff through lectures, group discussions and presentations.

There was also no annual budget for training – if there was a genuine need for a certain type of training, it would be arranged and provided. In the Shenzhen factory, there was also a large meeting hall that could accommodate up to 1,000 people, thus enabling a monthly training session for the entire workforce.

Also Read - Human Resource Management Assignment Help

Information and Analysis

Manfield implemented an information system with over 100 terminals of various functions. As Yuen put it, there was a lot of data to handle, ranging from formulas to inventory, and from unique customer requirements such as test reports, labelling, etc., to automatic prompts and alerts. The Company had to have an effective information system to handle and process data efficiently and to minimise human error.

In addition, production data were collected on a regular basis to generate key performance indices (including customer satisfaction indices and productivity indices) [see Exhibit 5]. These indices were reviewed and scrutinised regularly and were tabulated alongside details of the previous 12 months’ performance for benchmarking purposes.

Continuous Improvement

Continuous improvement was another important part of Manfield’s quality management system. Each year, the Annual Company Quality Objectives designated improvement projects for Company-wide involvement. At departmental level, significant issues or areas of weakness were identified and targeted as objectives for departmental improvement.

Quality Improvement Groups were established to tackle these tasks. Emphasis was also placed on self-initiated improvement schemes, including Quality Circles and an Employee Good Suggestion Box. Quality achievements were reported, recognised and rewarded during special sessions or at Annual Staff Meetings held at the Company’s meeting hall.

Process Management

In order to meet customers’ ever-tightening delivery schedules, smaller production lot sizes and quality demands, Manfield made efforts to manage and control the process flow more effectively. This began with clear process description and definition. For instance, design processes were clearly defined with input requirements, sample trials and adjustments, and product confirmation.

Similarly, key production and delivery processes were tied to explicit performance requirements and were depicted clearly with flow charts. The key performance indices were then closely monitored and tracked by each responsible department. To help encourage and reinforce this quality-focused mindset, a Company-wide bonus scheme tied to the performance targets was also put in place.

A Tripartite Joint Venture

Manfield had been attempting to make more efficient use of its production capabilities in Shenzhen by partnering with overseas partners that had the necessary technology but that did not have a facility in Mainland China. During an award presentation ceremony and exhibition in 1999, a fellow awardee introduced its German partner Weilburger Coatings to Manfield. Weilburger, in turn, introduced its Japanese partner Cashew Chemical Company, which was looking for a facility in China.

While Manfield was looking for overseas partners that could provide technology, Weilburger and Cashew were looking for a partner in China that had the same commitment to quality. In June 2000, the joint-venture company, named Weilburger Manfield Limited, was established, with all three companies as the joint-venture partners.

A self-registered company in Hong Kong and a separate trading entity under the management of Manfield, Weilburger Manfield Limited was responsible for sales of the joint-venture products manufactured by Manfield under licence from Weilburger and Cashew. The company successfully passed 16 customer quality audits in 2002.

This included a stringent two-day audit conducted by Motorola. By achieving a higher audit score than a major competitor, Manfield’s paint sales to the mobile phone industry increased sharply and the turnover of the joint-venture company showed remarkable growth.

Manfield Coatings: 2002/03

By 2002, Manfield’s turnover was more than double what it had been 10 years previously . From 1998 to 2003, the rate of delayed deliveries fell from 0.5 per cent to less than 0.1 per cent; the rate of complaints fell from 0.98 per cent to less than 0.63 per cent, and productivity in the production department rose from 143.27 kg per person per day to 182.37 kg. Manfield’s overall wellbeing was encapsulated in the Hong Kong Management Association’s Quality Award 2003 summary report.4

Manfield enjoyed a dominant paint supplier position in the traditional core business of metal toy stoving enamel and pad printing inks…. Supported by various schemes and training, the participation rate and adoption rate of the good suggestion scheme is very high. This reflects that employees are highly involved in the improvement process leading to continuous improvement of the company.

On-time delivery, one of the most important performance indicators valued by customers, is better than benchmarked and is highly appreciated by customers. In addition, the company strategy of joint venture and technology transfer to move rapidly into new market has yielded high business growth and brought new source of profit. These combined factors enable the continuous increase in turnover and profit by the company despite the harsh and difficult business environment world-wide.

EXHIBIT 1    TRAINING PROGRAMME FOR MANAGERIAL STAFF IN 1997

1.    Quality, 5S, Communication, TQM
2.    Management, Encouragement, Time Management, Interpersonal Relations
3.    Chain of Command, Crossing Territory, Management of Daily Operations, 36-Hour Management Course
4.    How to be an outstanding officer?
5.    Inter-departmental reliance
6.    Establishing Company Mission Statement, Declaration of Company Culture; How to be a good trainer
7.    Seven Habits of Highly Effective People

EXHIBIT 2 NUMBER OF SHORT ORDER FULFILLMENT AND OVERALL ORDER OVERDUE RATES

EXHIBIT 3    MAJOR QUALITY MANAGEMENT MILESTONES

1997: Establish the motto “prompt and reliable” and trial attempts; drastically reduced the overdue delivery rate; sharply increased “one-day orders”; certified for ISO 9001:1994
1998: Established Company mission statement and culture statement; awarded certificates of merit in quality and in productivity
1999:    Awarded certificates of merit in quality and productivity
2000: Awarded Productivity Award; awarded Q-Mark; Hong Kong Laboratory Accreditation Scheme accredited heavy-metal-content testing laboratory; founded the joint-venture company Weilburger Manfield Limited
2001/02: Training of personnel and setting up work system to ensure conformance to quality standards of Weilburger Coatings’ and Cashew Chemical Company’s licensed products
2003: Awarded Quality Award by Hong Kong Management Association and China Association for Quality; certified for ISO 9001:2000

EXHIBIT 4    FINANCIAL HIGHLIGHTS

EXHIBIT 5    SELECTED STATISTICS

Factors Contributing to the Notable Effectiveness of Manfield Coatings' Quality Management System

Manfield Coatings Company Limited's (Manfield) quality management success is due to strategic decisions, strong leadership, a dedicated workforce, and a comprehensive quality improvement approach. Several key factors have helped Manfield's quality management system succeed, but an ISO9001 certificate does not guarantee quality.

(a) Critical Factors for Success in Manfield Coatings' Quality Management System:

Leadership and Vision: Mr. Yuen Shu-Wah, founder and Managing Director, is crucial. He promoted quality from the company's start with his dedication to excellence. His visionary leadership emphasised continuous improvement and training and development, laying the groundwork for the quality management system.

Employee Involvement and Empowerment: Manfield understood that quality requires the whole workforce, not just one department. By empowering and involving employees, the company engaged at all levels. This approach encouraged employees to participate in improvement initiatives, share ideas, and grow the company (Pambreni et al., 2019). Employees felt responsible for the quality of their products and services.

Comprehensive Training Programmes: Manfield made training a cornerstone of their quality management approach. Comprehensive and rigorous training was provided to employees. These programmes taught technical skills and the company's values and quality philosophy. Manfield aligned all employees with quality goals by investing in workforce development.

Information and Analysis: Manfield's quality management success depended on an effective information system (Chen et al., 2020). This system efficiently managed formulas, inventory, and customer needs. This system provided real-time, accurate information to reduce human error and aid organisational decision-making.

Process Management and Improvement: Manfield knew that well-managed processes ensure quality. Process management and improvement were key to the company. Visual flow charts, key performance indicators, and clear process descriptions facilitated process management (Ulewicz & Nový, 2019). This strategy streamlined operations, increased efficiency, and ensured high-quality product delivery.

Continuous Improvement: Manfield made continuous improvement a daily priority. Quality improvement groups, quality circles, and an employee suggestion box allowed employees to share their ideas and improve. This practise kept the company flexible and responsive to customer needs and industry trends.

(b) ISO9001 Certification and Assurance of Quality:

An ISO9001 certificate shows an organization's commitment to quality management. It is important to note that this certification does not guarantee quality. The ISO9001 standard helps companies establish processes, monitor performance, and satisfy customers (Abbas, 2020). The system's effectiveness depends on its integration into the company's culture and operations.

ISO9001 certification means a company meets strict document control, process monitoring, and customer feedback requirements (Ong et al., 2020). This certification reassures customers, partners, and stakeholders that the company has standardised quality management.

True quality assurance goes beyond certification. It requires multifaceted, holistic approach. Leadership buy-in, employee buy-in to quality improvement, a culture of continuous improvement, a focus on customer satisfaction, and a burning desire to exceed customer expectations all contribute to a company's dedication to quality standards (Tambare et al., 2021).

Companies that follow the ISO9001 standards must demonstrate their commitment to quality through demonstrable processes and tangible results. The certification is worthwhile if it leads to observable gains in efficiency and patron approval.

Manfield Coatings has achieved greatness in quality management well beyond the requirements of ISO9001. The company's success in this industry can be directly attributed to the leaders' unwavering commitment to quality. In addition, staff members have demonstrated impressive zeal in contributing to the company's success. The business is always trying new things to make its operations better. In addition, the company's top priority is the happiness and satisfaction of its customers.

Manfield's commitment to quality is evident in the company's insistence on never missing a deadline or delivering anything less than 100% satisfaction. Manfield stands out from the competition not just because of the certification, but also because of the company's committed leadership, empowered employees, streamlined process management, and earnest commitment to going above and beyond for its customers.

Also Read - Management Assignment Help

Impact of Quality Focus on Manfield Coatings' Niche Positioning

(a) Advantages of effective quality management

The company has distinguished itself in the paint and coatings market thanks in large part to its dedication to quality management. Keeping quality standards at an all-time high has helped set the company apart and fuel its growth.

Improved Reputation and Trust: Manfield Coatings' unwavering commitment to quality has earned the company widespread respect and credibility in the coatings industry. Customers have faith in the business because it regularly satisfies their stringent quality requirements. Trust is built, customer loyalty is maintained, and positive word of mouth is spread when promises are consistently met. As a result, the company naturally attracts new customers due to the reliability and consistency of its products and services.

Differentiation: Manfield Coatings' unwavering commitment to quality makes it stand out in a highly competitive market (Ulewicz & Nový, 2019). Consistently exceeding customer expectations is one way in which the company sets itself apart from rivals that place more emphasis on price or turnaround time than on product quality. This differentiation gives Manfield Coatings a competitive edge and allows it to charge premium prices. Customers are willing to pay more for the company's consistent high quality.

Stronger Customer Relationships: Quality management helps Manfield Coatings produces products that meet customer needs. This meets customer expectations and builds long-term relationships. Customers trust the company, resulting in repeat business and long-term partnerships. By consistently delivering products that meet customer needs, the company builds trust and value.

Increased Operational Efficiency: Quality demands meticulously defined processes and rigorous monitoring (Lee et al., 2019). Thus, operational efficiency improves significantly. Reducing defects, rework, and delays saves time and resources. This results in significant cost savings and productivity gains. Company operations are streamlined, improving resource allocation.

Risk Mitigation: Effective quality management includes comprehensive risk assessment and mitigation. By proactively addressing quality-related risks, Manfield Coatings reduces the risk of costly disruptions or customer dissatisfaction. This proactive approach protects the company's reputation and finances. A mature and successful quality management system anticipates and mitigates quality risks.

(b) Influence on Company's Growth and Associated Costs

Effective quality management boosts Manfield Coatings' growth. The company's niche positioning, based on quality, supports growth, innovation, and long-term success. It's important to note that quality standards require costs.

Market Expansion: Manfield's quality products attract new customers looking for reliable suppliers. The company's ability to exceed customer expectations opens new markets and industries (Ong et al., 2020). This expansion boosts revenue and diversifies.

Customer Base Growth: Recurring revenue increases with customer growth. Satisfied customers return for repeat orders, generating revenue (Abbas, 2020). Happy customers also spread the word, boosting organic growth.

Innovation and Research: Quality-focused companies strive to improve their products (Pambreni et al., 2019). This drive drives R&D, resulting in innovative products that meet changing customer needs. The product portfolio expansion opens up new market segments.

Premium Pricing: Manfield's quality management lets it charge premium prices. Customers will pay more for reliable, high-quality solutions. This pricing strategy boosts profits and quality improvement.

Costs of Quality: While quality management has many benefits, it is important to recognise the costs of maintaining these standards. Training, quality control, advanced technology, process improvements, and ISO certifications are among these costs. Customer loyalty, market differentiation, and operational efficiency are long-term returns on these costs.

Reliable Projection for Profit in 2023 Based on Historical Data and Rationale

Forecasting Manfield Coatings' 2023 profit using Exhibit 4 data requires a thorough analysis of past trends and key financial indicators. Careful analysis of the company's financial performance over the past decade can inform a reliable projection.

Utilizing Historical Growth Rates

Leveraging historical growth rates can help project 2023 profit. The average growth rate of net profit over the past years can be extrapolated to estimate 2023 profit. It assumes that historical growth rates will continue in the future. It ignores market, competitive, and organisational changes that could affect the company's profitability.

Historical growth rates are easy to project, but they don't account for potential disruptions or changes that could affect future profit. Market, technology, regulation, and competitive changes can break historical growth patterns.

Incorporating Macroeconomic Factors

Financial estimates can be improved by considering macroeconomic aspects that may affect results (Tambare et al., 2021). Economic growth, inflation, industry developments, and technological advances can affect a company's bottom line. Consider external influences while projecting 2023 earnings to get a more accurate estimate.

If the construction and infrastructure industries grow rapidly, Manfield Coatings may see more demand and profitability. When the economy is bad, fewer people may buy high-quality paint and coatings, which is terrible for business.

Industry and Market Analysis

Understanding the market and industry is essential for good predictions. Market circumstances, competitors, and disruptions must be examined. The company's bottom line may be affected by factors such as market share, client preferences, changes in regulation, and cutting-edge technological developments (Pambreni et al., 2019). Knowing where the company stands in the market allows for more precise forecasting.

Scenario Analysis: Considering Multiple Outcomes

Given forecasting's uncertainties, scenario analysis can improve projections. This method creates scenarios based on assumptions. One scenario may assume historical growth rates, while another may use more conservative estimates due to market volatility (Lee et al., 2019). By considering multiple scenarios, the projection can account for different risk and uncertainty levels.

Incorporating Expert Insights

Industry experts, financial analysts, and internal stakeholders provide qualitative insights to quantitative analysis (Hassan & Jaaron, 2021). These experts can offer unique perspectives on industry trends, competitive forces, and company dynamics that quantitative analysis may miss. By including expert judgement in projections, potential influencing factors can be better understood.

Balancing Historical Data with Future Uncertainties

Historical data can provide valuable insights, but past performance does not always predict future results. The projection method should balance historical trends and potential deviations (Taleb et al., 2021). The approach incorporates diverse scenarios and expert insights to accommodate uncertainties and variations.

Conclusion

Using historical data to project Manfield Coatings' profit for 2023 requires quantitative and qualitative analysis. Historical growth rates, macroeconomic factors, industry and market analyses, scenario analysis, and expert perspectives can improve projection reliability. This method acknowledges uncertainties while attempting to predict the company's profitability trajectory. It acknowledges that historical trends provide a foundation, but a comprehensive analysis of external and internal factors is needed to project the business environment's complexity.

Read Our Sample Papers

References

Abbas, J. (2020). Impact of total quality management on corporate sustainability through the mediating effect of knowledge management. Journal of Cleaner Production, 244, 118806. https://doi.org/10.1016/j.jclepro.2019.118806
Chen, R., Lee, Y. D., & Wang, C. H. (2020). Total quality management and sustainable competitive advantage: serial mediation of transformational leadership and executive ability. Total Quality Management & Business Excellence, 31(5-6), 451-468. https://doi.org/10.1080/14783363.2018.1476132 
Hassan, A. S., & Jaaron, A. A. (2021). Total quality management for enhancing organizational performance: The mediating role of green manufacturing practices. Journal of Cleaner Production, 308, 127366. https://doi.org/10.1016/j.jclepro.2021.127366 
Lee, S. M., Lee, D., & Kim, Y. S. (2019). The quality management ecosystem for predictive maintenance in the Industry 4.0 era. International Journal of Quality Innovation, 5, 1-11. https://doi.org/10.1186/s40887-019-0029-5 
Ong, F., Purwanto, A., Supono, J., Hasna, S., Novitasari, D., & Asbari, M. (2020). Does Quality Management System ISO 9001: 2015 Influence Company Performance? Anwers from Indonesian Tourism Industries. Test Engineering & Management, 83, 24808-24817. https://www.researchgate.net/profile/Masduki-Asbari/publication/342975441_Does_Quality_Management_System_ISO_90012015_Influence_Company_Performance_
Answers_from_Indonesian_Tourism_Industries/links/5f0fbf9892851c1eff1556ba/Does-Quality-Management-System-ISO-90012015-Influence-Company-Performance-Answers-from-Indonesian-Tourism-Industries.pdf 
Pambreni, Y., Khatibi, A., Azam, S., & Tham, J. J. M. S. L. (2019). The influence of total quality management toward organization performance. Management Science Letters, 9(9), 1397-1406. http://dx.doi.org/10.5267/j.msl.2019.5.011 
Taleb, I., Serhani, M. A., Bouhaddioui, C., & Dssouli, R. (2021). Big data quality framework: a holistic approach to continuous quality management. Journal of Big Data, 8(1), 1-41. https://doi.org/10.1186/s40537-021-00468-0 
Tambare, P., Meshram, C., Lee, C. C., Ramteke, R. J., & Imoize, A. L. (2021). Performance measurement system and quality management in data-driven Industry 4.0: A review. Sensors, 22(1), 224. https://doi.org/10.3390/s22010224 
Ulewicz, R., & Nový, F. (2019). Quality management systems in special processes. Transportation Research Procedia, 40, 113-118. https://doi.org/10.1016/j.trpro.2019.07.019