Proposal System from "Going Through the Motions" to "Company-wide Improvement" — A Case Study of a Manufacturing Company's Two-Year Transformation

Many companies' proposal systems suffer the same fate: they are launched with great fanfare, complete with suggestion boxes, proposal forms, and quarterly evaluations. However, after a year, they are largely ignored, and by the third year, they are quietly forgotten. Employees are not proactive, reviews are not transparent, and there is no follow-up on implementation. In the end, the system becomes just "a line in the annual report." What is the real issue? Is it that employees are unwilling to participate, or that the system itself drains the enthusiasm for improvement?

This article uses the transformation practice of a car parts manufacturing company (hereinafter referred to as Company A) as a case study to comprehensively reconstruct the process of a proposal system from near failure to becoming an improvement engine, and to distill key points of mechanism design that can be replicated.

1. Case Background: A System That Is "Alive but Not Trusted"

Company A has approximately 1,200 employees and established a proposal system in 2021 with the aim of encouraging company-wide participation in improvement. In the first year, they received over 700 proposals, and the management once thought they had found the key to company-wide improvement. However, the enthusiasm faded much faster than expected: the number of proposals dropped to 240 in 2022 and further to 86 in 2023. Only 47 employees participated throughout the year, with a participation rate of less than 4%, and an average of 0.07 proposals per person—equivalent to a workshop of 100 people producing only six or seven proposals in a year.

What further troubled the management was the quality of the proposals. Among the 86 proposals, less than 30% were truly "improvement-oriented," while the rest were mostly requests like "suggest adding more dishes to the cafeteria" or "suggest re-marking the parking lot." Of the adopted proposals, about 70% had no follow-up within six months—no trial records, no standardization actions, and the improvements quietly disappeared in daily operations. A workshop supervisor privately commented, "This system is just for show; no one cares about our suggestions, so it's better not to submit them."

Company A's situation is not unique. Many companies' proposal systems fail at four critical points: slow feedback, opaque review, misaligned incentives, and lack of closed-loop implementation.

2. Diagnosis: Four Data Points Reveal the Truth of System Failure

At the beginning of 2024, the Quality Director of Company A led a special review of the proposal system, using data to reveal the full scope of the problem:

First, the feedback cycle is too long. Sampling statistics show that the average cycle from submission to a clear conclusion for a proposal is 54 days, with the longest taking 8 months. Employees have to wait nearly two months for a response to their suggestions, and their enthusiasm for improvement is gradually eroded.

Second, the review process is opaque. The review is handled solely by the Quality Department, which neither publishes the review criteria nor explains the reasons for rejection. Frontline employees generally feel that they "don't know who reviews their proposals, how they are reviewed, or why they are rejected," leading to a lack of trust.

Third, the incentive structure is misaligned. The system only includes an annual selection of three "excellent proposal awards," with the first prize being 5,000 yuan. Small, daily improvements are ignored, and only "big enough" proposals are worth submitting—this directly distorts the direction of proposals, leading to a large number of comprehensive, detached "paper proposals."

Fourth, there is no follow-up on implementation. There is a significant gap between a proposal being "adopted" and being "implemented." The review found that only about 30% of adopted proposals were actually implemented, and of those implemented, fewer than half completed updates to work instructions, control plans, or inspection standards. Without solidifying the improvements, problems quickly resurface.

Additionally, there is a set of structural data: among the 86 proposals, about 70% came from office staff, and less than 20% from frontline operators; the three main workshops together had only 9 participants. The richest source of improvement is on the frontline, but the system precisely excludes frontline employees. This data made the management realize that the failure of the proposal system is not a "problem of employee quality," but a problem of mechanism design—the issue lies in the system, not the people.

3. Restructuring: Six Mechanisms to Revitalize the System

Based on the diagnosis, Company A began a systematic restructuring of the proposal system from the second quarter of 2024, focusing on six core mechanisms:

Mechanism One: Graded and Categorized, Aligning Improvements Appropriately. Proposals are divided into three levels based on the scope of improvement and impact: S-level for micro-improvements that can be implemented within the same workstation or team, reviewed and approved on the spot by the team leader; M-level for improvements across processes or teams, reviewed within 5 working days at the workshop level; L-level for major improvements involving cross-departmental coordination or significant investment, managed through a project-based approach. After grading, small improvements no longer get stuck in the long queue for headquarters review, and major improvements are not held back by "small review frameworks."

Mechanism Two: 7-Day Feedback Commitment. The system explicitly commits to providing a clear conclusion—acceptance, postponement, or rejection—within 7 working days for any proposal, with rejections requiring a written explanation. This rule, though simple, is the most critical step in rebuilding trust. Employees first realized that "their suggestions are really taken seriously," and their willingness to participate increased.

Mechanism Three: Incentive Restructuring, Immediate Small Rewards. After an S-level proposal is adopted and implemented, immediate small rewards are given and points are accumulated; points are cumulated monthly and can be exchanged for physical goods or linked to skill levels and annual excellence awards. M-level and L-level proposals are rewarded based on a certain percentage of the calculated benefits, with no upper limit. At the same time, "number of proposals" was removed from performance metrics, replaced by "team participation rate" and "effective improvement rate," to prevent padding the numbers.

Mechanism Four: Transparent Kanban, Full Visibility. Proposal kanbans are set up in workshops, with the five stages of each proposal—"submission → review → trial → implementation → standardization"—publicly displayed. Employees can see the progress of their own proposals and the changes brought by others' proposals. Peer demonstration is more effective than any motivational speech.

Mechanism Five: Mandatory Standardization. Within 30 days of implementation, proposals must complete standardization actions—updating work instructions, control plans, or inspection standards—otherwise, they do not count towards the benefit calculation. This rule ensures that "improvement" and "standardization" are inseparable, preventing the loss of improvement results.

Mechanism Six: Leadership Demonstration. The General Manager participates in proposal presentation meetings every quarter, the Quality Director reviews proposal data at monthly management meetings, and workshop supervisors inspect proposal kanbans weekly. Management actions demonstrate that "improvement is not just the Quality Department's responsibility, but a company-wide effort."

4. Results and Review: Data Speaks

The effects of the restructuring began to show in the first quarter. In 2024, the number of effective proposals increased to 960, and in 2025, it reached 1,860, with 620 employees participating, raising the participation rate from 4% to 52%; the proportion of improvement-oriented proposals increased from less than 30% to 78%; the median feedback cycle shortened from 54 days to 3.2 days; and the proposal standardization rate increased from about 30% to 92%. The direct financial benefits confirmed by the finance department in 2025 were approximately 4.6 million yuan (including reduced scrap, improved efficiency, and energy savings), while the total annual investment—awards, review manpower, and presentation meeting costs—was about 550,000 yuan, resulting in an input-output ratio of approximately 1:8.4.

A typical detail in the transformation is the case of an experienced employee in the assembly workshop who proposed an S-level improvement to address the issue of missed torque wrench operations—adding a sensor to the tooling to automatically alarm and lock the next process when a missed operation occurs. The proposal was approved on the same day and implemented within three days, reducing the missed operation defect rate from 1.8% to 0.2%, saving about 120,000 yuan in rework and scrap costs annually. This employee later became a key figure in workshop improvements, leading the team to submit over 40 proposals in a year. The improvement culture is nurtured by such "visible changes."

The review also documented a negative lesson: in the third quarter of 2024, a branch factory, in an attempt to boost participation rates, once included "one proposal per person per month" in the team performance metrics, resulting in a surge in proposals, but half of them were padding. The company immediately halted this practice and switched to only evaluating participation rates and effective improvement rates, and the data returned to normal the following month. Once metrics are evaluated, they become distorted; the proposal system must be wary of the "quantity stick."

5. One-Sentence Summary

The root cause of the failure of the proposal system is never that employees are unwilling to suggest improvements, but that the mechanism design gradually erodes their enthusiasm for improvement. The six mechanisms—grading, fast feedback, immediate incentives, transparent kanban, mandatory standardization—are all essential.

The essence of the proposal system is not to collect suggestions, but to operate an improvement assembly line where "suggestions are taken seriously, improvements are standardized, and results are visible."

Knowledge code: 5.1.2

Version: v20260810

Author: Quality Think Tank Quality Think Tank is dedicated to providing systematic professional knowledge, methodologies, and practical tools for quality management practitioners, helping companies continuously enhance their quality capabilities.