CASE: DELTA WIRE USES TRAINING AS A WEAPON

The Delta Wire Corporation was founded in 1978 in Clarksdale, Mississippi. The company manufactures high-car-on specialty steel wire for global markets and at present employs about 100 people. For the past few years, sales increased each year.

A few years ago, however, things did not look as bright for Delta Wire because it was caught in a potentially disastrous bind. With the dollar declining in value, foreign competition was becoming a growing threat to Delta's market position. In addition to the growing foreign competition, industry quality requirements were becoming tougher each year.

Delta official realized that some condition, such as the value of the dollar, were beyond their control. However one area they could improve upon was employee education. The company worked with training programs developed by the state of Mississippi and a local community college to set up its own school. Delta employees were introduced to statistical process control and other quality assurance techniques. Delta reassured its customers that the company was working hard on improving quality and staying competitive. Customers were invited to sit in on the educational sessions. Because of this effort, Delta has been able to weather the storm and continues to sustain a leadership position in the highly competitive steel wire industry.

Delta continued its training and education program. In the 1990s, Delta instituted a basic skills training program that eventually led to a decrease in nonconforming material from 6 percent to 2 percent and a productivity increase from 70,000 to 90,000 pounds per week. In addition, this initiative resulted in a ''best in class" award from Goodyear, its largest customer.

Discussion

1. Delta Wire prides itself on its efforts in the area of employee education. Employee education can pay off in many ways. Discuss some of them. One payoff can be the renewed interest and excitement generated toward the job and the company. Some people theorize that because of a more positive outlook and interest in implementing things learned, the more education received by a worker, the less likely he or she is to miss work days. Suppose the following data represent the number of days of sick leave taken by 20 workers last year along with the number of contact hours of employee education/training they each received in the past year. Use the techniques learned in this chapter to analyze the data. Include both regression and correlation techniques. Discuss the strength of the relationship and any models that are developed.

2. Many companies find that the implementation of total quality management eventually results in improved sales. Companies that fail to adopt quality efforts lose market share in many cases or go out of business. One measure of the effect of a company's quality improvement efforts is customer satisfaction. Suppose Delta Wire hired a research firm to measure customer satisfaction each year. The research firm developed a customer satisfaction scale in which totally satisfied customers can award a score as high as 50 and totally unsatisfied customers can award scores as low as 0. The scores are measured across many different industrial customers and averaged for a yearly mean customer score. Do sales increase with increases in customer satisfaction scores? To study this notion, suppose the average customer satisfaction score each year for Delta Wire is paired with the company's total sales of that year for the last 15 years, and a regression analysis is run on the data. Assume the following MINITAB and Excel outputs are the result. Suppose you were asked by Delta Wire to analyze the data and summarize the results. What would you find?

3. Delta Wire increased productivity from 70,000 to 90,000 pounds per week during a time when it instituted a basic skills training program. Suppose this program was implemented over an 18-month period and that the following data are the number of total cumulative basic skills hours of training and the per week pr productivity figures taken once a month over this time.

Use techniques from this chapter to analyze the data and make a brief report to Delta about the predictability of productivity from cumulative hours of train:

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