Quality performance Featured

9:23am EDT January 26, 2005
Quality is as important to manufacturing as profit is to a company's financial health, says Steve Cage, president and CEO of Product Action International Inc.

"If you don't have quality, you're out of the game," he says.

Quality is especially important for Cage, because the success of his quality inspection and engineering firm depends on his staff's ability to produce high-end, accurate results for its A-list of clients, including Ford Motor Co., General Motors, Toyota and DaimlerChrysler.

With more than 3,500 professional inspectors on the job, producing quality results takes a lot of incentives, training, diligence and oversight.

"We have standardized work processes," Cage says. "If you go to a job in Ohio for a client, you have to set it up the same way you would in Indiana or Canada. It cannot be different."

The incentives the company provides keep employees motivated to succeed.

"Quarterly, our inspectors earn quality chips for doing good work," Cage says. "They can turn those chips in for prizes, and they're really nice ones, like televisions and DVD players. So the inspectors are very quality-oriented."

Before each project starts, it is reviewed by a coach in Indianapolis.

"The coach reviews the work standards and makes sure the flow is right and if it's going to work," Cage says. "We are constantly working to reduce the chance of error in our work. We've built a reputation for delivering perfect parts -- or as close to perfect as you can get."

Another way the company ensures quality and provides quality oversight is by having every field employee -- including Cage's management staff -- go through the sorting and inspection process on a site.

"I've done it," Cage says proudly. "It should be done by everybody out there in the field."

But even with such an emphasis on quality and accuracy, Cage says it's important that members of his staff not be afraid to make mistakes.

"I look for folks to pat on the back," he says. "And the supervisors know that if you do find a problem, don't pound on the person's head. Write it down, track it, fix it and support the team. It's all about making what we do for the customers shine."

Sometimes, it is the customers themselves that can stand in the way of producing quality results.

"They (manufacturers) want it done cheap and fast," Cage says. "We want it done right."

Countering this challenge takes constant communication with clients.

"It helps to be around," Cage says. "We provide a lot of data on a regular basis so the customer is seeing the results. And we know we have to do our jobs right and try to improve every year."

So far, the results have been impressive for Cage and Product Action. For more than 24 years, they have been providing timely, cost-effective sorting, inspection, rework, containment and engineering services to some of the nation's largest manufacturers and suppliers.

Starting the engine

It wasn't always about quality.

In the late 1970s and '80s, manufacturers were focused more on speed and numbers of cars produced than quality, Cage recalls.

"Back then, they (manufacturers) were slamming cars together to meet requirements for numbers," he says. "That doesn't work today."

It was during this time that Cage, a college student, was working in an automotive factory at a summer job. He noticed the rush to production and realized there was a real need for detail-oriented quality inspections during the manufacturing process.

"The people doing it (building cars) couldn't see the forest through the trees," says Cage. "I could see there was a huge need."

One thing he saw was the need to reduce waste during the manufacturing process. So Cage, working with his father, a retired metallurgical engineer, found a way to reuse materials rather than simply discard them.

"We were able to put the parts back into the system at much less cost than making them new," Cage says. "We wrote disclosures on the process and were instantly in business."

In those early days, Cage worked on the parts in his garage.

"I bought a Black and Decker Work Mate and worked the parts, then took them to the plant," he says. "I measured them and was nearly 100 percent correct. When you can report that, your word is worth a lot. Can we be perfect all the time? No, but we can strive for it."

Two factors contributed to Product Action's early success -- Cage's solid reputation and pressure from foreign competition. Foreign competition caused auto manufacturers to rethink their processes.

"If the manufacturer found a bad part, it had to be sent back to the supplier," he says. "It could take 30 to 60 days to get replacements. The industry received a lot of pressure from Asian automakers like Mitsubishi, which resulted in the elimination of a lot of car companies. That worked in our favor."

Cage also credits high ethical standards, derived from his father, as a big factor in his success.

"Dad taught me good principles," he says. "Treat people as you want to be treated, and if something goes wrong, fix it at my cost. It's tried, true and simple, but it works."

Once Product Action began contracting with a few of the major car manufacturers, others followed suit.

"I would work one part and then see that that same part was being used in six other plants," Cage says. "I'd ask myself which ones I could get to, and approach the manufacturer."

Cage's turning point came when he landed a large deal with Toyota.

"(That) helped spur our growth," he says. "They're quality, top-notch manufacturers. We assist them in all three of their manufacturing facilities here (in Indianapolis). When we knocked on GM's door with that information on our resume, we picked up notice quick."

Fine-tuning the engine

Managing the business is a balancing act that requires a great deal of attention.

Product Action does sorting and inspection work, but it also handles emergencies, rushing to a manufacturer's aid in order to prevent a line from shutting down or, in some cases, to restore it to operational status.

"We have to manage our resources and projects very carefully," he says. "That is where the money is made or lost. It's easier to lose money if it's not handled properly."

Cage balances the need for employees for both project and emergency work by having 35 locations strategically placed throughout the United States and Canada. Each is staffed with inspectors and managers who can handle customer projects and emergencies.

"We may have two sorters on one job," Cage says. "If an emergency comes up, we can move one person for a short period of time, then bring him or her back when the problem is solved. But it is challenging to manage, to hire the right number of people to deal with something that's not supposed to happen every day."

Cage emphasizes that all 3,500 employees are just that -- employees of the company, not temporary agency hires.

"Temporaries would not work for our system," he says. "Our people need to be able to walk into the facility wearing the right protective clothing, eyeglasses, etc. That is huge. We have to hire and train our own employees so they come in to a facility looking professional."

Product Action also tests each potential employee before he or she is hired to make sure that person can handle work that requires a great deal of concentration.

"We start them with the sorting process and then, after a period of time, we make a change or interrupt them," Cage says. "That can happen frequently in the field."

If the person handles the interruption, it's a good sign that he or she is ready to handle processes in the field.

Cage is also fine-tuning the company's service offering. In addition to sorting and inspection, its engineering services are a growing part of the business, and one that Cage predicts will play a larger role in Product Action's future.

"We are creating systems for the manufacturers to ensure greater quality," Cage says. "There are great suppliers out there, but they usually don't have the bandwidth to do this. Today it's all about initiating systems and processes that prevent mistakes from happening."

Cage says some might question this tactic -- as fewer mistakes occur, fewer manufacturers will need his company's services.

"What we're finding is they may call us less because of an error but they are calling us more for engineering," he says. "That's what is happening. And as we develop those deeper relationships, we'll grow."

Cage's strategies are proving successful. Product Action has been recognized as one of the fastest-growing businesses in the area by both the Indiana University Kelley School of Business Growth and local media.

"We've got smart people here that enjoy what they do," he says. "And we get along as a team. Very few people leave. It's fun. We're working with the largest manufacturers in the world, and we appreciate that. But our heads aren't growing, the business is."

How to reach: Product Action International, (317) 579-2600 or www.productaction.com