Continuous Improvement Plan for Latino Engineering: A Business Report

This report provides a comprehensive analysis of the Latino Engineering case study, focusing on the challenges faced by the company after its acquisition by the Investment Group. The report identifies the root causes of the problems, such as equipment, process, employees, and management, using quality tools like the Cause and Effect Diagram and Pareto Diagram. The analysis highlights the importance of organizational culture, customer-centricity, and employee responsibility in achieving continuous improvement. The report then proposes an implementation plan integrating lean management and six sigma principles, including organizational culture changes, respect, and responsibility to address the identified issues and improve product quality, customer service, and overall performance. The PDCA methodology is suggested for continuous improvement, ensuring sustained business operations and profitability.

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Latino Engineering Continuous Improvement Plan
Author’s Name
Institutional Affiliation
Date

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Latino Engineering Continuous Improvement Plan
The paper analyses the case study of Latino Engineering, a company that started from scratch
under the leadership of Dominic Latino. Perhaps the name Latino Engineering was drawn from
its owner Dominic Latino. However, in the case study Dominic Latino, after a long service in the
company decided to sell it to Investment Group that maintained the company’s name even after
the takeover. It is glaringly notable that the company is facing a raft of problems since its
takeover even after it retained some of the company’s previous employees before even the
purchase. As clearly stated in the case study, during the reign of Dominic Latino he
singlehandedly made decisions, but the company was still stable and afloat. In his leadership, the
working relationship with its employees was cordial and perhaps that made workflow quick and
efficient. Ideally, when the working relationship is superb, definitely the employees would work
synergistically to deliver excellent results and that is why the company gained customer loyalty.
Nonetheless, the paper would have to use some quality tools to examine the root causes of the
problems Latino Engineering is experiencing today in the case study. The quality tools to be used
in the identification of the root cause of this problem are accordance with the requirements of the
total quality management. Besides, after quality tools have been used to identify the causes of the
problems in the case study, the paper would also develop an implementation plan that would be
used to eliminate or perhaps minimize the root causes of the challenges the company is facing
today (Salah, Rahim, & Carretero, 2014, P.250). Finally, in accordance with the continuous
improvement plan approaches, PDCA methodology would be used to develop an improvement
plan Latino Engineering would use to streamline its business operations.
Identification of roots causes using quality tools and techniques

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In total quality management there are seven main quality tools that are used to
identify the root causes of problems an organisation can face (Goetsch, & Davis, 2014, P.67).
They include: histogram, Scanner plot, check sheet, the Pareto diagram, control chart, cause,
and effect diagram. All the seven tools can equally be employed to identify the sources of
problem in this case study. But, picking one or two quality tools would still give some root
cause of the problem. This being a problem that can be analyzed qualitatively as opposed to
quantitatively, Pareto Diagram and Cause-effect Diagram are the most appropriate in
establishing the root causes of the challenges of Latino Engineering.
Cause and effect Diagram
This quality tool shows the systematic relationship that exists between the cause and
effect or results. However, the relationship can also be between symptoms, effects or outcomes
and the causes (Magar, & Shinde, 2014, P.365). In essence, this quality tool is easy to apply,
because it helps in digging deep into the root cause. It traces the source of the problem and
relates its effects and outcome. This tool simply uses the approach of reverse engineering, where
the effect or the results at hand are analyzed to understand its causes.
This quality tool follows the procedure below:
Agreeing on defining the effect, this then is used to understand the causes. The effect
must be defined clearly, and analyzed properly so that it leads to the understanding of the cause
(Soković, Jovanović, Krivokapić,. & Vujović, 2009, p.5). On this step, one needs to be
meticulous because any misstep in this stage can make it impossible to identify the actual root
causes.

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After defining the effect, and thoroughly analyzing it, the TQM consultant would then
have to determine some main groups of the problems (Magar, & Shinde, 2014, P.365). The
categories can be people, process, management or generally the environment. The categories or
classes of the problem are then connected to the backbone to assist in understanding the effect.
Ideally, the cause and effect diagram is like this one below here:
Application of Cause and Diagram to the Latino Case Study
Equipment
Using this tool, it is apparent that Latino engineering requires engineering equipment to
carry out its business activities. However, going by the reports of customers, they have
complained that the company is using faulty equipment. Therefore, without any doubt,
equipment is one of the root causes as far as this case study is concerned. Businesses are required
to use the right equipment to carry out their roles excellently, but in this case in point it is crystal
clear that some defective equipment was used.

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Process
Apparently, the wrong equipment impacted the process of servicing vehicles in the right
way to the satisfaction of customers. Therefore, the process can also be considered to one of the
root causes, because if the process is right, definitely the use of wrong or faulty engineering
equipment would not have happened. The process is said to be right, effective or efficient if it
uses the material or equipment to perform some task. Thus, if Investment Group followed the
right process obviously customers would not have raised complaints indicated in the case study.
Employees
Also, since employees are the ones that carry out the processes, then they can also be
categorized as a root cause of the problem (Soković, Jovanović, Krivokapić,. & Vujović, 2009,
p.5). They allowed the use of faulty equipment or material to carry out their roles and as an
employee one must be able to ascertain if the equipment they are using is effective or right
before proceeding with the process. Thus, the poor quality the customers are reporting is because
the employees at Latino Engineering stopped following the right process, like the former owner
of the company Dominic Latino.
Management
It essential to note that Investment Group is the one managing Latino Engineering, and
before them the management of the company was effective and that is why there were no any
complaints from customer. In the case study it is reported that Dominic Latino could make here
decisions independently and that did not affect the quality of their products or services
(Pettersen, 2014, P. 209). However, with the new management at the company, cases of poor
quality are being reported and also the service team at the company is not attentive to the

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customer needs. All the complaints about poor quality, incompetent service team reflect the kind
of leadership at the company. In summary, poor quality, poor customer care services and drop in
returns at the company can be attributed to the following root causes: equipment, process,
employees and management.
In the use of this cause and effect, it is evident that one cause leads to another problem. If
these causes are represented in a diagram they would then be able to form a diagram like the one
shown above. Thus, cause and effect diagram is effective in identifying the root causes that are
leading to a certain results or effect.
Pareto diagram
This quality tool is like a bar chart, and it is equally instrumental in identifying a root
causes in any problem as in the case study of Latino Engineering so that a strategy for
improvement can be developed (Magar, & Shinde, 2014, P.365). Ideally, using this tool
categories are also required depending on the data collected. First, what a QTM consultant
should do identifying an area with most complaints and establishing the nature of the complaints.
Identifying the frequency of complaints would then help in drawing a Pareto diagram like the
one below. Using the example of the Pareto diagram below, then one can conclude that
documentation is the root cause of a problem
An example of Pareto Diagram

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Product quality- Considering the case study of Latino Engineering there are complaints
that the product quality has dropped unlike during the time of Dominic Latino (Soković,
Jovanović, Krivokapić,. & Vujović, 2009, p.5). In the case study, it is indicated that the designs
are bad and also the engineering equipment used is faulty. It is notable that during the time of
Dominic Latino the customers liked his products due to better designs and quality, hence poor
quality is indeed a root cause of the problem in this case study.
Packaging- There has been cases of wrong products being shipped to the customers. In
all honesty, from the perspective of customers, a company that is unable to deliver the right
product to satisfy their needs, is not caring and is not committed to meeting their needs. As a
result, customers can shift their loyalty to cares about their needs.
Poor service delivery- Since Dominic Latino quit the company and the new management
of the Investment Group took over, customers have started raising complaints about service
delivery. They are complaining about the service team at the company not keen to listen to their
needs. Service team at any organization should observe customer care relations, and the failure
of this team at the company indeed is a root cause to the problem Latino Engineering is
grappling with.

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Management- However there is no direct complaint about the current management of
Latino Engineering, but from the concept of the buck stops with the top leadership, it is perfectly
right to assert that the entire failure witnessed at Latino Engineering is due poor management.
The management needs also to be looked into, to understand their leadership and failures to
maintain excellent product quality at the company. Being a minor problem, the management root
cause can be categorized as others, because if broken down it can be learnt that the top leadership
may not be the cause of the company’s problems as outlined in the case study (Kerzner, 2013,
P.65).
In summary, using the Pareto Diagram to identify the root causes, product quality could
be the main cause the company is failing. Also, poor packaging, poor customer care relations and
management are some of the root causes. Nevertheless, using both the cause and effect diagram
and Pareto Diagram, it is evident that the root causes are almost similar if they are both analyzed
in details. Thus, it is effective to use more than one quality tools in order to ascertain root causes
from different perspectives, to establish the right approach to solving a problem as in this case in
point (Meredith .& Mantel, 2014, p.8). Nevertheless, after identifying the root causes, as a TQM
consultant the next step is coming up with an implementation plan that can help eliminate or
reduce the root causes.
IMPLEMENTATION PLAN TO ELIMINATE THE ROOT CAUSES
To develop an implementation plan, lean management and six sigma have to be
integrated to solve eliminate some of the root causes at Latino Engineering so that the company
can go back to its profit-making era. Besides, the origin of lean management is reported to be
from Toyota in Japan and later many firms in the USA have implemented it objectively to

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eliminate things that can prevent them expanding and making profits (Groves, Knopman, Syme,
Kalra, & Mao,2017, P.9).
Implement Organisational culture change
Lean management and six sigma are today have advanced in the management system and
that is why they are applied to eliminate some problems in an organization (Arnheiter, &
Maleyeff, 2005, p.9). Both Lean management and six sigma recommend change of organization
culture. Investment Group need to change its organisational culture, from that culture where
employees are reckless and not customer-centered to one that is customer-centered, keen on
details and synergistic (Lam,O'Donnell, &Robertson, 2015, P.211). Ideally, lean management
recommends eliminating things that are derailing an organization, and through a new
organisational culture Latino would be able to solve a problem of non-responsive service team
that has completely derailed the company’s customer care relations. Organisational culture
would inculcate some values that would drive Latino Engineering forward.
Respect Responsibility
According to TQM, six sigma it is the responsibility of everyone to ensure that the
quality of goods and services is excellent at an organisation (Goetsch, & Davis, 2014.p.8). As an
employee, it is important that one needs to understand that they have an obligation to the
organization. As mentioned earlier, Latino Engineering needs to change its organisational
culture; it is through this culture that every employee would nurture the ownership culture
(Fryer, Antony, & Douglas, 2015, P.6). When employees feel that they own a company they feel
indebted to serve it. Therefore, the management needs to ensure that every employee in their
capacity needs to ensure that the Latino Engineering offers its customers high quality product or

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services. As a result, the company would have to change its leadership at the service team, and
some of the employees in the department should be retrained on customer care management
(Groves, et, al, 2017, 89). Also, those employees that fail to take their responsibilities as required
by the company should be sacked.
Sacking and hiring
According to lean management, a firm should do away with waste and in this case study
it is apparent that some mechanical engineers are becoming burden and unprofessional and that
is why they could just use faulty engineering equipment (Andersson, Eriksson, & Torstensson,
2006, p.283). Also, in the use of cause and effect diagram quality tool, it was observed that
customers complained about receiving wrong products from the ones they orders. In such a
situation, the company would have to sack the individuals who packaged the wrong products and
delivered to the customers (Singh, 2015, p.87). In essence, the company is correcting weaknesses
and it is necessary to have some individuals sacked and competent ones hired.
Creation of Communication Department
Another significant element associated with six sigma is its focus on customers (Salah,
S., Rahim, & Carretero., 2010, P. 250). In TQM, customers are the primary stakeholders, and
Latino Engineering must make some radical changes which must be communicated to customers
(Pettersen, 2009, P.128). First the company should reassure its customers that they are regretting
its past failures and they are determined to satisfy their needs. Also, the company should
embrace organization communication by creating a PR department, to help the company
management frame its agenda and strategies and communicate to its publics. Also, through the
PR department, the company should run adverts on radio, newspaper and other media reassuring

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customers that the company is committed to meeting their needs, as it has been since its
inception. In addition, to the advert the company should apologize to customers that were
affected by poor quality, and use of faulty engineering equipment.
Monitoring and evaluation
As recommended by both lean management and six sigma monitoring and evaluation
should be used to achieve perfection at the company (Bendell, 2006, P. 258). The control stage is
important in undertaking any project and therefore the company’s management would now have
to augment its monitoring and performance evaluation. Also, the management would directly
have to inspect the engineering equipment, so as to avoid the use defective ones. In a nutshell, if
Investment Group implements the above listed recommendations it would be possible to
eliminate the root causes as explained using the Pareto diagram and cause and effect diagram
(Bernhardt, 2013, P.269).
Continuous Improvement (CI) Plan
PDCA is a model for CI with four stages and these stages are repetitive in nature. PDCA
is also called Deming circle (Morgan, & Stewart, 2017, P. 304).

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In TQM, PDCA stand for plan, do, check and act.
Plan- it deals with the analysis of what requires for improvement with absolute
consideration of some areas that require some changes. Ideally, plan stage seeks to promote
decision making by the management on what is required to change (Kerzner, 2013, P.45) .
According to TQM, the project management has a role to play in running the processes being
carried out Chadha, 2017, P.40). Therefore, the management of Latino Engineering would use
the plan phase to make decisions on how to improve its product quality, improve its service team
and ensure that faulty engineering equipment is not used. Generally, Latino Engineering would
use the plan phase to identify its current and future problems to develop a roadmap for solving
them (Hibi et al, 2005. P.7).
Do- the Do-phase is about implementing changes that were suggested on the plan phase
(Ren. & Fan, 2015, 269). Decision making is done on the plan phase, and therefore the DO-
phase helps in implementing some solutions as recommended on the plan phase (Magar, &
Shinde, 2014, P.370). Basically, this phase is critical because it is then that decides what exactly
the organization should do as far the decisions made earlier are concerned.
Check-on this phase the management and supervisors would have to find out if the
solutions implemented on the DO-phase are being adhered to (Magar, & Shinde, 2014, P.370).
Of essence again in this stage is that the management would have to analyze the processes at
Latino and where they identify some weaknesses they can still plan (Charvat, 2003, P.65).
Hence, the check phase can still be carried out with the plan stage.
Act- this stage is about result evaluation and in this Latino Engineering would have to
evaluate the performance of its Service Team, find out if there are any complaints about quality

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and engineering equipment (Magar, & Shinde, 2014, P.370). After the evaluation, the company’s
management would still go back to the plan stage to make decisions to correct the mistakes
identified before they cause more damage to the company.
In conclusion, the case study of Latino Engineering is a project that is on the precipice of
collapse unless some changes are implemented. Through the use of Pareto diagram and cause
and effect diagram, it has been possible to identify some root causes, whose solutions have been
provided on the implementation plan. Furthermore, the continuous improvement plan, which
uses PDCA-cycle, would help the company improve its activities as soon as possible to avoid the
problems outlined in the case study.

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Appendix
Cause and effect diagram
https://www.scribd.com/doc/12759805/Total-Quality-Management-Quality-Circle
Sample of Pareto Diagram

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https://www.isixsigma.com/tools-templates/pareto/pareto-chart-bar-chart-histogram-and-
pareto-principle-8020-rule/