Articles on Quality

Oregon Business Magazine Article

The following is an article which appeared in the September 1996 edition of Oregon Business. 

M A N A G E M E N T 
by Shirleen Holt

THE QUALITY QUOTIENT

Gresham's Indepak produced nearly 100 million plastic parts without a single return.  So what else is new? 

Bob Russell had been general manager at Indepak for only a month when he noticed something startling.  The company, which molds plastic for packaging, wasn't seeing any returned parts.  This can't be, Russell thought, even the top manufacturers have a margin of error.  He started tallyng the number of pieces produced daily at the Gresham plant.  Then he multiplied those by weeks.  Then months.  He came up with 70,000,000.  Gaining on 100 million parts and not a single return. 

"I started realizing we were onto something pretty big." 

He jubilantly announced his finding to the crews working on the chugging machinery.  They were mildly surprised. 

"This company is so unique and yet it doesn't understand how unique it is," marvels Russell, who spent 26 years as a management consultant helping companies try to reach performance levels that the low-key Indepak seems to come by naturally.   

PROBLEM:  Dave Aho wanted a company that was built to last,
        but challenges to his commitment to excellence were constant.

SOLUTION:  He lived his values, never cut corners,
nurtured his employees, and was patient --
very patient -- about making profits. 

A look into the company's culture, however, reveals why it has grown to $8 million in sales with no advertising.  Well before TQM became a business mantra, Indepak was built on the old-fashioned notion of quality for quality's sake -- and on the idea that profits are a consequence, not a goal.

"The values were lived out by the owners before they were ever put on paper," Russell says. 

The ethic of excellence is so much a part of the company that employees are nonplussed when asked about it, as if asked to describe how they get their right arm to move. 

The company has no quality control department, each worker has developed a laser-like eye for flaws.  Substandard parts are automatically plucked from the line, no matter how small the imperfection.  Pieces packed in a cardboard box found to be dented are repacked in a smooth box.  Even a crooked mailing label is cause for a do-over. 

Owners Dave and Jan Aho credit Indepak employees for the company's quality record.  "If I disappeared it would be OK," Dave says.  "The company would make it."

And woe to the employee who declares a flawed part "good enough."

"I wouldn't let anybody put something in a box that's 'good enough'," says Cheryl Blanc, a machine operator who has worked for Indepak for six years.  Blanc and co-worker Jean Sorlien admit they can't go shopping without inspecting others' plastic packaging.  Is the hinging right?  Are the edges even?

"Some of the quality," Blanc confides, "is not good."

Sorlien agrees.  She can examine a competitor's work and offer a diagnosis in the supermarket aisle.  "Gosh," she clucks, "you should have your mold cleaned out."

Manufacturer's struggling to get their line workers to just show up on time no doubt wonder how Indepak achieves such commitment. 

It starts with president Dave Aho, an understated executive who would prefer being just about anywhere else than on the pages of a magazine. 

Aho and his wife, Jan, bought the company in 1967 from a man who ran it from his garage.  From the beginning Aho wanted a principled business that emphasized quality over profits, even if that meant that he wouldn't take home a paycheck for a while.  He didn't for the first few years, violating a tenet of business gurus everywhere: pay yourself first. 

"That's bunk," he says quietly.  "If that's the way you look at it you will start chiseling and cutting corners to make profits.  By serving your customers you will get profits.  It's a consequence of doing good."   

So he worked harder, his days stretching to 20 hours while the couple lived on Jan Aho's income from a state job.  He worked so hard he "couldn't chew."  He brought a sleeping bag to the shop so he could catnap before starting in again. 

As the business grew, Aho hired the best employees he could find, eyeing them for their potential as much much as for their skills.  He spent top dollar on good equipment, setting up a machine shop so the company could make its own tools.  The goal was vertical integration, a fancy term for something Aho figured just made good sense.  By controlling the quality of the machinery, Indepak had greater control over the quality of the finished product.  The company didn't promise what it it couldn't deliver; it didn't cut corners to cram in more production, and it refused to bump a smaller client in favor of a larger one. 

Aho also gave his employees the freedom to grow, allowing them to reach beyond their expertise.  "He's a perfectionist, but he allows the individual to be less than perfect," says Darryl Burkholder, a developmental engineer who has been with the company for 12 years. 

Burkholder himself grew into his position from the early days as a production operator.  As did Nick Veach, who now works in electronics.  Now both men feel an urge -- a responsibility -- to see the company succeed.  That includes helping new workers rally for the quality cause.  If they fail to, "it's harder on them than it is on us," Veach says.  "We have all the support we need where they may feel like an outsider."

Indepak got its business without advertising, a practice that Aho has resisted until recently.  "Better to let someone else talk about how good you are," he says.  Word spread slowly, but enough to ensure an average 10% to 20% annual growth.  The company's confidential roster of clients grew, too, ranging from toy companies to computer hardware manufacturers. 

Although relatively small, Indepak has gained a solid reputation in the industry, "I consider them one of the top quality manufacturers on the West Coast, possibly the United States," says Al Weymiller, a sales rep for Southern California-based Spartech Plastics, and a 38-year industry veteran.  "They're in the top 2% and that might be a little low." 

The company's reputation is what convinced Russell to give up his Lake Oswego consulting business to work for Aho.  Unlike his reserved boss, Russell freely boasts about Indepak's success, particularly its streak of error-free production.    By the spring of 1996, the number was 98,000,000 parts and counting.  So many parts that if they were placed end to end they'd stretch from Portland to Singapore, home of the company's most remote customer, Russell says. 

Russell's enthusiasm had spread to other employees, who were now so intent on reaching their goal that they got nervous over a false alarm (a customer has misordered). 

Russell was preparing to celebrate the 100 million milestone when he got the news.  A shipment came back.  This time it was a legitimate return.    Indepak had sent the wrong part. 

Though disappointed, the employee's are philosophical.    They'll reach the 100 million mark, no problem.  Besides, it's not about the destination, but the quality of the journey. 

The following is an article which appeared in the Business section of the Gresham Outlook newspaper. 

Packing a big wallop

Plastic packaging business, which started in a garage quietly celebrates 30th year.

by Michele Meyers
of the Outlook staff

It all began more than 30 years ago when engineer Dave Aho, who was working for Jantzen, Inc. marveled over a broken-down machine that once molded bra cups for ladies swimsuits. That primitive machine gave Aho the vision for a process of molding plastic that has since evolved into an 80 employee Gresham business. 

Corbett residents Aho and his wife, Jan, own Indepak, which molds plastic for packaging.  The couple reflected on the company's success Monday before its 30th anniversary employee celebration.  "We've had a lot of good employees,"   Jan Aho said.  "We couldn't have gotten here without them." 

Dave Aho's interest in the machine at Jantzen led him to buy Indepak in 1967 from a man who was running the company out of his garage using similar equipment.   "We struggled along for a while," he said, adding that they were living off Jan Aho's income from a job with the state.  "It was 10 years before the business was really making us a living," he said.

The company has since grown by leaps and bounds and has a solid reputation in the plastic packaging industry.  It designs its own machinery and has outgrown several facilities, including the current site at Northeast 194th Street and San Rafael, which is slated for an expansion.

Indepak makes packaging materials for products ranging from Seiko watches to Intel computer chips.  Currently, the company is focusing on clients with high-tech engineered products.  The client works with Indepak engineers to design the appropriate plastic packaging.  Indepak creates a trial mold before the packaging is mass-produced.

About 1 million plastic parts are produced weekly at Indepak.  In 1996, the company produced 98.8 million parts without a single return by a client.  That year, the company also set a record of 803 days without an employee absence from a job-related injury or illness.

In it's history, the company has never advertised its services.  Its reputation has been built solely on "word of mouth" and strong ethics, according to General Manager Bob Russell.  "What has amazed me in the time I've been here is that I've never heard a supplier, customer or employee question the integrity of the owner," he said.  "For (Aho), profit is not a right; it's a consequence."

All of the company's scrap plastic and metal is recycled.  In addition, water that is used to cool molds is treated and recycled.  Heat removed from the water is also reused to heat one of the factory buildings.  Steve Brose, facilities and equipment manager, who has been with Indepak for 14 years, said the Ahos run their business just as they run their lives.  "Their strong values carry over into the workplace," he said.  "I think everyone here thinks the world of them."  Brose, a Gresham resident, added that Dave Aho has been careful to pick talented employees with strong character.

A theme emerged among Indepak employees describing what leads the company to success - its family atmosphere.  "The owner treats his employees as human beings," said set-up technician Tom Hays, who has worked for the company for nine years.  "He's ethical.  You know he's gotten here the right way."   Machine operator Sharon Linquist added, "(Aho) treats us like a family."