CASE: ROMEO ENGINE PLANT (ABRIDGED)

EPGCSM 06












GROUP NUMBER: 7
GROUP MEMBERS
Satish T M
Sushanta Kumar Bhuyan
Joby A
Simranjit Singh Ratra
V. Sushanth Abhishek

Group 7 Satish T M | Sushanta Kumar Bhuyan | Joby A | Simranjit Singsh Ratra | V. Sushanth Abhishek
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1. What were the main objectives of the Romeo Engine Plants manufacturing strategy?
According to the Mission and Operating Philosophy of the Romeo Engine Plant (REP)
Manufacturing Handbook of August 1989, The Purpose of the Romeo Engine Plant is to produce
the highest quality production engines in the world that meet all of our customers' requirements at a
cost lower than the competition, and to develop teams of employees who are the best engine
builders in the world. Ford seemed to continue to use REP with the same objectives; only to
market their brand instead of REPs.
During 1992, REP produced 400,000 engines in two engine models: a 4.6 liter, 2 valve engine used
in the Lincoln Town Car, Ford Crown Victoria, and Mercury Grand Marquis, and a 4.6 liter, 4
valve engine used in Ford Motor Company's Lincoln Mark VIII luxury car. Sales of these
automobiles for Ford were strong and Ford Motor Company would continually introduce new car
models that would use the Romeo engines; so REP was to be Fords captive supplier. By 1996 REP
expected to produce more than 800,000 engines per year.
2. What specific initiatives did the management of Romeo implement to achieve these
objectives?
REP was continuously striving towards better efficiency and high productivity. In this regard they
were set target of increasing production from 400,000 engines per year in 1992 to reach at least
800,000 engines by 1996. This goal of increasing production output by 100% in 4 years was a
gigantic task; which meant George Pfeil had to rethink the way REP produced engines in the past.
Considering the above goal, the following innovative initiatives were implemented to increase the
efficiency of the plant.
i. Improving the Quality control process with the goal of the costumer getting Zero Defect parts
with minimum variation.
a. The Romeo Quality Process (RQP) was established to ensure Zero defect in the product.
RQP process began long before production began. Engine exchange program was launched
in case of detection of defect in the engine which could not be fixed with minor repair.
b. Operating team members were to undergo 300 hours of training on Mission/Team Concept,
Quality 101, Team problem solving and Productivity 101.
c. Elimination of incoming inspection of material. Supplier was billed for the full loss caused
by the defective parts.

ii. Team Work was harped upon with the goal of nurturing and inculcating the culture of team
work in the workforce. This further allowed for nurturing collective decision making while
granting freedom for innovative action.
a. 13 work teams constituted. Each of the team operated as business unit. Each team had their
own leader, support staffs, including engineering, maintenance and administration. This
allowed for sharing of success & failure together as team. To further avoid hierarchy, all
staff were to wear the same uniform with first name embroidered on the front.

iii. Use of Information Systems was stressed with the goal of Real time information for analysis
and prompt decision making.
a. Machine monitoring system (MMS) was introduced to identify the machine where defective
pieces were made or when machine had stopped. Easy to detect time of breakdown and
cause from the code generated through MMS. This has helped the problem fixing team to
directly identify the reason and start fixing the issue immediately.
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iv. Controlling overhead by giving each BU the collective responsibility to reduce overhead.
a. Teams were responsible for their own expenses and shared the same for transparency and to
improve control on overhead. Team took initiative to negotiate with supplier to reduce the
cost of their indirect material.
b. Monitoring of team wise overhead on weekly basis by Finance department, which was
shared with the team members.

v. Review & Planning mechanism was put into place.
a. Each week Plant manager met various teams on a rotation basis. The objective was not to
identify variance against the target rather how to improve quality & productivity. This led
for creation of healthy competitive environment within the organization.
3. What management control and feedback systems were in-place at Romeo. How did these
management control systems assist with the implementation of Romeos overall
manufacturing strategy?
i. Information Systems: Highly customized, integrated and real time systems.
a. Use of MMS was a key component to achieve high quality standards. MMS provided clear
warnings about machine failure and reasons for the failure, hence reducing the labor
intensive monitoring process for cluster of machines.
b. Removal of bottleneck operations. It was believed that unless bottle neck operations are
removed one cant increase machine efficiency.

ii. Organisation Structure: Romeo assigned work teams to production areas that corresponded
to a major engine component or assembly operations. Deploying teams responsible for
manufacturing, engineering, Quality Control, Production systems and supplier relationships
with no labourers.
a. Removal of barriers to flexible work removed by having only 11 labours and 2 skilled trade
classification.
b. Team Organization helped eliminate multiple layers of supervision, empowering everyone
in the team to make decisions, and learn from the mistakes. The team were designed to
include people who need work together and learn from each other. Each team working as a
separate business unit with autonomous team manager and support staff. Automation of
process resulting in fewer people required to supervise machine operations.

iii. Life Education Centre for Trainings: Education and training initiative offering courses from
high school equivalency to graduate technical and management skills.

iv. The Checkbook System: Authorisation given to each team on their expenditure budget for
indirect material like supplies, tool, scrap and maintenance material. Authorisation
calculated based on the number of parts produced each day.
a. Teams attempted to lower the cost by directly negotiating with the suppliers
b. Weekly meetings held and overhead report also prepared

v. Product Development Structure: Adopted a do-it-differently philosophy by thinkproblem
solve-ensure quality methodology. Flexible work assignments, Encouraging initiative,
creativity and prudent risk taking by production staff and mangers.
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vi. Periodic Quality Survey: Bench marking Romeo engines against those used by competitors
to attain best-in-class quality.
a. Scrap system of Quality problem are logged in to a complaint form and action plan were
prepared within 24 hours. Teams performed pareto analysis on the defect causes and
concentrated attaching top three causes. Plans shall specify the defect, the solution and steps
to prevent recurrence. The computer automatically removed items from inventory and from
this information made daily, weekly and monthly scrap reports.
b. No rework approach. Defective engines during the manufacturing process were scrapped.
Laid down target levels for product and process characteristics adapting a Zero defects
philosophy. Engine Exchange Program wherein if an engine is identified to be defective by
the Dealers or assembly plants and the same cannot be fixed by minor repair, such engines
are exchanged with new ones and the complaint ones are brought to the factory for
evaluation. Complaint form and Action plan; Quality problems originating from outside the
plants called for action plans of less than 24 hours.
4. Evaluate the strengths and weaknesses of the Romeo Engine Plants Total Quality
Management (TQM) implementation. What, if any, improvements would you suggest?
REP (Romeo Engine Plant) had established the RQP Romeo Quality Process, their own TQM set
up to ensure the customer expectations of the product are understood, deployed and controlled in
the manufacturing and assembly process. REP had achieved high standard of quality by 1993
amongst other producers or plants of Powertrain engines for Ford.
RQP Strengths RQP Weaknesses / Suggestions
- Experienced Cross functional teams ensuring
the end to end processes are connected.
- Clear target levels established, penalties for
underperformers.
- Process selection were consistent with nature
of process and sources of variations
- Control plan implementation was rigorous
24 hours response for any complaint in-
house, supplier or to assembly. Critical
issues had stringent SLAs.
- The emphasis on education and training to
the team on quality.
- Work Team Organization, Use of MMS
were also key components of the RQP to
achieve high quality standards.
- Lack of reward system (at least not
mentioned in the case study) for team
exceeding set quality targets as much as
penalty levied on those introducing a defect.
Suggestion: Just like the no rework and
engine exchange penalty programs, reward
programs can be introduced for the teams
achieving zero defect or minimal defects.
This could have helped everyone go extra mile
to achieve quality.
- Despite numbers shown, there is a lot of
scope to improve by adopting stringent
measures based on RCA of 150 defects.
REP should strive for six sigma which
means 3 - 4 defective parts per million.
Suggestion: A mechanism to measure the
continuous improvement of the quality
consistently to be put into place.