Goodbaby International: A World-Class Quality Model

November 2, 2012 by ahmed

Goodbaby products (photo source: flicker kforman)

Goodbaby International is the largest manufacturer and supplier of strollers worldwide and the most popular brand of children’s products in China. Their manufacturing campus in Kunshan is the world’s largest stroller factory.

Goodbaby International won the World Class Award – Global Performance Excellence Awards (GPEA) in 2011.

During the awards dinner Goodbaby’s chairman and CEO Zhenghuan Song offered Dr. H. James Harrington to visit their manufacturing sites and Harrington accepted the invitation.

Harrington wrote an interesting blog post about his visit and how Goodbaby is committed to quality and business excellence.

In less than 20 years Goodbaby became the supplying manufacturer for many leading brands around the world, but how have they done it? Read the article below and learn some lessons from them to improve your organisation.

Ahmed
BPIR.com


In October 2011, I attended the 3rd Business Excellence Global Conference and the 17th Asia Pacific Quality Conference held at the Marina Bay Sands hotel in Singapore. One of the highlights of the conference was the awards banquet held on October 17, where the Global Performance Excellence Awards (GPEA) were presented.

This award reflects the concepts defined in the U.S Malcolm Baldrige Performance Excellence Award and the European Excellence Award. The GPEA awards recognize truly excellent organizations. To compete, an organization must already have won its national highest-level excellence award.

The GPEA is structured in three levels:

  • World Class Award (the highest-level award)
  • Best in Class Award
  • Quest for Excellence Award

This year there were six World Class Award winners, seven Best in Class Award winners, and five Quest for Excellence Award winners.

The following organizations received the World Class Award:

  • Goodbaby International Holdings Ltd., a large manufacturing organization having 16,169 employees with four sites in China and six sites overseas. Its headquarters is located in Lujia Town, Kunshan City, Jiangsu Province, China.
  • Singapore Technologies Engineering Ltd., a large manufacturing organization with 22,000 employees with 20 sites in Singapore and 50 sites overseas. Its headquarters is located in StarHub Centre, Singapore.
  • Shanghai No. 7 Construction Co. Ltd., a large service organization with 1,798 employees, eight sites in China, and two sites overseas. Its headquarters is in Shanghai, China.
  • Global Indian International School, Singapore, Queenstown Campus, a school with 107 educational faculty and staff. Its headquarters is located in Singapore.
  • PUB, Singapore National Water Agency, a nonprofit organization with 3,138 business employees, one site in Singapore, and one site in Malaysia. Its headquarters is located in Singapore.
  • Housing and Development Board, a nonprofit organization with 4,721 business employees and one site in Singapore. Its headquarters is located in Singapore.

You will note that there were no U.S. organizations that qualified for the award, although U.S. organizations are eligible.

At the awards dinner I was fortunate to be seated with many executives from Goodbaby International: Zhenghuan Song, chairman and CEO; Andy Zhu, vice president of quality; and J. Q. Fu, chairman of Goodbaby China. When Song learned that I was coming to China the following week, he extended an offer to visit his company, and I accepted. As an experienced consultant, I can go into almost any organization and find a way I can help it to improve its processes. Even though Goodbaby International did win the highest international excellence award, it didn’t get a perfect score of 1,000 points, so I thought there would be room for improvement.

The company

On the day of the site visit, during our ride to the production facilities, Zhu provided us with some background on Goodbaby International. The organization was founded in 1989 by Zhenghuan Song, and it is the largest and most well-known enterprise that designs, manufactures, and sells children’s products in China. Its products include strollers, bicycles, tricycles, walkers, children car seats, and so on. In terms of stroller sales, the company has maintained the No. 1 position for 17 years in China, 11 years in the United States, and five years in Europe. Goodbaby International is the largest manufacturer and supplier of strollers worldwide and the most popular brand of children’s products in China.

Goodbaby International’s purpose statement is: “Take care of children, serve families, and repay the society.” Its mission statement is: “Revolutionize children’s living environment, improve the quality of life for children.” Its vision statement is: “A world-class, well-respected company.” Its core values are: “Pursuit of excellence, integrity and honesty, customer-focused, teamwork, spirit of innovation, results-oriented, and sense of ownership.”

Goodbaby International has 16,169 employees, of whom 1 percent are staff management, 4.2 percent are quality staff and 4.5 percent are technical and designs staff. The company has an international management and technical team that includes 26 foreigners based in China and five global research-and-development centers that employee 353 engineers. The company has established an OHSAS 18001 system to manage occupational health and safety. The company has 4,465 patents in China, 60 patents overseas, and is rated No. 1 in the durable juvenile-product industry. In 2009 the company was the only one awarded the China’s Standards Innovation and Contribution Award among the same industry manufacturers.

Goodbaby International has a large-scale modern production facility occupying 870,000 sq. meters. They have invested 35 million RMB ($5.6 million ) to build an advanced test center with state-of-the-art equipment that is accredited by the Chinese government based on ISO 17025.

Goodbaby International has established a continuous improvement culture through Six Sigma, TPM, 5S, information boards, QC groups, visual monitoring management, and one-piece flow systems. This has resulted in a 50-percent increase in efficiency. The company systematically encourages all employees to focus on continuous improvement, improve whole process activities, and to sustain a high level of innovation related to their products and processes.

The tour
We started our visit by touring the production area. The first thing that I noticed was that it was spotless, and everyone wore clean uniforms. Each department had its own color combination. It was obvious that everyone was participating in the 5S activities.

The second thing that was obvious was that management was using visual displays to keep everyone informed and interested. There was no way that you could miss the large information boards that were placed in every natural work team’s area. Of course, everything was in Chinese, and the only thing I could understand was the pictures of the workers with smiles on their faces. I noted that there were about 25 pictures on one board, and there were three drawings of a sad face.

Zhu explained that the pictures were of people in the department who were functioning at the zero defect level. The picture of the sad face with the names under them were people who were not working at the zero defect level. He went on to explain that each day, the quality level of every employee is evaluated and posted on the information board. He explained that the salary of each employee was also posted there, and that 25 percent of each employee’s salary is based on the quality of his work. We later learned that each employee’s salary was also based on the number of different operations she was trained on and able to perform. Zhu pointed out that increased productivity at the individual operator’s level was not important because the production lines were balanced, and there was little or no stock between operations. It was essential that they were able to meet the standard, but increases over and above standard would only mean that the individual would be out of work until the next part comes to them.

When we questioned if posting everyone’s salary was a good thing to do, he replied that they do not hide anything from their employees. Everyone knows the problems they are having with the production schedule and the way the organization is performing. The information board also had posted on it the organization’s mission, objectives, vision, and quality policy statements.

Zhu explained that the pictures were of people in the department who were functioning at the zero defect level. The picture of the sad face with the names under them were people who were not working at the zero defect level. He went on to explain that each day, the quality level of every employee is evaluated and posted on the information board. He explained that the salary of each employee was also posted there, and that 25 percent of each employee’s salary is based on the quality of his work. We later learned that each employee’s salary was also based on the number of different operations she was trained on and able to perform. Zhu pointed out that increased productivity at the individual operator’s level was not important because the production lines were balanced, and there was little or no stock between operations. It was essential that they were able to meet the standard, but increases over and above standard would only mean that the individual would be out of work until the next part comes to them.

When we questioned if posting everyone’s salary was a good thing to do, he replied that they do not hide anything from their employees. Everyone knows the problems they are having with the production schedule and the way the organization is performing. The information board also had posted on it the organization’s mission, objectives, vision, and quality policy statements.

As we walked through the production departments, we noted that there was not a lot of sophisticated robotics equipment used; there were just a lot of well-trained people working in harmony like a large concert orchestra with no sour notes. The production line was designed so that workers were assembling units at a comfortable pace. The equipment and parts that they needed were in arm’s reach, and there was no stock sitting around. Clever inspection approaches were used throughout the line. For example, after the wheels were put on the strollers, they rolled down the incline ramp to the next part of the production process, where they came to a gentle stop against a platform that had two white lines on it. If the front wheels of the strollers came to rest between the two white lines, the wheel alignment was good. At the end of the line there was a group of inspectors performing a comprehensive and detailed test of all the stroller functions.

I stopped at one information board because there were two pictures of parts and equipment posted on it. When I inquired what these were, Zhu explained that they were things that were found not to be in the place that they should be. When that occurs, they take pictures of them and post them. This helps everyone to keep practicing 5S.

I could have stayed the whole day just enjoying the smooth rhythm of the production operations, but I had taken a fall three weeks earlier and was in a lot of pain standing on my feet for more than 30 minutes, so we left the production area by car and headed for Zhu’s office.

Song joined us to discuss the tour and Goodbaby International’s activities. The following are the highlights of this discussion:

  • A great deal of effort and money has been invested by Goodbaby International to establish an effective knowledge management (KMS) system. To meet customers’ requirements and expectations, the company conducts special investigations, focus groups, market research, customer visits, and exhibitions. The results of these activities are filtered and entered into the KMS to better understand the voice of the customer. Goodbaby is also using quality function deployment to stimulate innovation in its design areas. It also conducts yearly employee-opinion surveys, and the results of these along with the corrective action taken become part of the KMS.
  • To improve customer satisfaction and loyalty, Goodbaby International has established a close working relationship with its customers through customer relations management (CRM) systems. Goodbaby group also established a “Goodbaby Child Mothering” website, call center, Goodbaby Club, retail outlet, and All-China Women’s Federation activity. The website not only provides shopping guidance, mothering knowledge, and interactive communications, but also invites 1,300 experts to provide guidance on bringing up children. From 2007 to 2009, the customer satisfaction of the national market in China increased from 78.1 percent to 82.1 percent, the international market grew from 75.8 percent to 82.4 percent, the U.S. market share grew from 32 percent to 41.7 percent, and in Europe from 11 percent to 13 percent.
  • Goodbaby International was certified to ISO 9001 in 1999. Over the years it has maintained this certification. It also obtained ISO 17025 and ISO/TS 16949, which spanned various aspects of its quality management system, including environmental management, product development and design, and compliance of test and calibration laboratories.
  • The company adopted the national standard of Criteria for Performance Excellence (GB/T 19580) in 2006. Goodbaby was recognized by the China National Intellectual Property Department as a national model enterprise for intellectual property, and the China Quality Association named the company the outstanding enterprise of total quality management during China’s 30th anniversary of national quality implementation project.

Goodbaby’s continuous improvement program during the past three years has improved as noted in the following statistics:

  • Outgoing product audit pass rate from 97.64 percent to 98.96 percent
  • Customer complaints have dropped 30 percent
  • First-time pass rate improved from 95.6 percent to 99.2 percent
  • Customer satisfaction increased from 75.8 percent to 82.4 percent
  • On-time delivery of spare parts improved from 94.5 percent to 98.7 percent

Goodbaby International products are sold in China and countries around the world under the Goodbaby International brand name and by the following third parties:

  • gb
  • Goodbaby
  • Happy Dino
  • Geoby
  • Goodbaby EU

Shortly after we arrived at Zhu’s office, a U.S. customer purchasing agent stopped by to see him. This provided us with an excellent opportunity to obtain first-hand input from the end-user about Goodbaby International products. As we discussed the product lines, the purchasing agent began to sound more like a salesman for Goodbaby International than its customer. It was obvious that he was pleased with the company’s products, including their products. He praised Goodbaby on its innovative designs and ability to meet delivery schedules.

We left Zhu’s office to tour the laboratory facilities. An electric wheelchair was waiting for me upon our arrival at the laboratory. It was a product manufactured at a factory Goodbaby group owned. As I used it, I realized what an outstanding product it was. I had used an electric cart at Costco and Safeway to move around in these stores; they were big and hard to maneuver. This one was controlled by a joystick and was lightweight. It was fantastic; you could turn on a dime. Zhenghuan Song, the CEO, offered to let me take it and use it while I was in China. I declined because I decided I would get used to using it and would miss it too much when I returned to the United States.

As impressed as we were with the production facilities, the laboratory facilities were even more impressive. There were rows and rows of children’s car seats and strollers being pounded, dropped, and stressed to evaluate just how much they could take before they broke. In another part of the laboratory the plastic and fibers used in production were subjected to chemical tests to be sure they met specifications. The test and evaluation equipment that was used was as good as any you would find in Europe or the United States.

In another part of the laboratory there was a crash test unit where baby car seats were tested to measure the stress that an infant would be subjected to if the car was in a crash. The lab used different-sized dummies, from a toddler to a large child, to evaluate the stress based upon the different sizes and weights of the children. These tests were done on all new designs and repeated periodically during the production phases to be sure that there had not been a negative change due to changes in the production process and incoming materials. During the impact a series of microsecond pictures were taken, and hundreds of sensors were used to study the stresses put on the child when they were properly strapped into the car seat.

After touring the laboratory facilities we went to lunch and then to Goodbaby International’s showroom and conference center. As we toured the showroom, Song introduced us to the different product lines and models in each line. I didn’t realize there were so many things to move little children around in and to keep them entertained. We saw strollers, car seats, bouncy chairs, walkers, small electric cars, and even a model 300 SL Mercedes that was electrically powered by its own batteries and came equipped its own working radio. It was red and the exact model of the 300 SL roadster that I had when I was first married.

One of the outstanding features of the showroom was a model store that was set up to refine how the stores throughout China should be organized. They used this layout to experiment with different promotional activities and product layouts to define the best way to present the products and make shopping easier for their customers.

Song personally demonstrated the different strollers and their individual features. One had a seat that rotated around so the child could look forward or backward at his parents. Another folded up with the touch of a button.

The future

In 2010 Goodbaby International announced that all prams they will design in the future will follow the cradle-to-cradle concept. Cradle-to-cradle design is a holistic, economic, industrial, and social framework that seeks to create systems that are not just efficient but essentially waste free. The company will also examine the rest of its business with a team of external cradle-to-cradle experts.

Song had invited all of his management team to come to the conference area, and following our tour of the showroom, I gave a short lecture on “Total Improvement Management.” We then went outside for a group picture. Once again, Song suggested I take the electric wheelchair to help me get around at the conference. He even volunteered to provide a car to move the wheelchair from my hotel to the conference. This is a man who earns million dollars a year and manages a number of major companies. He took the time to spend the full day with this small group of quality professionals who came to visit one of his factories. It was obvious he was extremely proud of his people and his products. He made the quality of his product his personal responsibility, and he sets a role model that few CEOs in any part of the world can match. This kind and unassuming man is the heart of the quality movement at Goodbaby International. Song, working with Zhu, has made Goodbaby International stand out as a benchmark for other organizations around the world.

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