No plant ever needs to be abandoned because of its people. The problem is basically poor management and poor processes, explains Luk Van Wassenhove, INSEAD Henry Ford Chaired Professor of Manufacturing and Professor of Operations Management.
That perhaps is the moral of this story of an ugly, misfit factory, completely transformed into a beautifully working business. But this transformation didnt happen overnight or with the wave of a wand.
Ford selected the Halewood plant (commonly known as one of the worst car factories - not only in the UK, but also in the world) in 1997 to build Jaguars new volume model, the X-400. In May 2001, Halewood celebrated its rebirth when the first X-Type came off the production line.
In two cases, Professor Van Wassenhove, Kumar Neeraj and Ramina Samii (both INSEAD researchers) describe the process the plant went through to reach this fairy-tale-like ending.
In Case A, Professor Van Wassenhove and Kumar Neeraj look at the changes Ford Halewood made to develop a new production system - Jaguar Cars Limited knew it had a lot of work ahead when it selected Halewood for the production of its new model X-400 (also known as the Baby Jaguar). The firm had to transform the plants supply chain operation to reflect performance levels befitting the Jaguar brand. To ensure success, it had to carry out new product development, logistics network and process design and facilities and production processes design all at the same time.
In transforming the system, Jaguar took advantage of the X-400s modular construction to reduce the number of suppliers and to simplify the assembly and logistics processes. The car company applied the concept of modularization on the logistics processes as well. The interfaces between different processes were clearly defined, so they could be outsourced to a third party logistics service provider.
Furthermore, to achieve quality and productivity objectives, Jaguar refurbished the facilities at Halewood and converted them into a series of standardized cells. They used a "Centres of Excellence" approach to implement lean manufacturing principles in these cells. Finally, to bridge the culture gap, lift employee morale and build an environment of trust and mutual respect, Jaguar started a program called "the Halewood difference."
Continuing the study of how Jaguar handled the workers and their cultures in the plants transformation, Case B deals with management changes and human issues at the factory. It tells the story of how Operations Manager David Hudson, Halewoods knight in shining armor and mastermind behind the transformation, changed the mindset of the 3,000-strong workforce and created a new spirit based on mutual respect and trust with the objective of producing Jaguar quality from day one.
There are no bad plants, just bad management, says Hudson. He and his team used this theory, along with their remarkable leadership and managerial capabilities to pursue a systematic approach to managing and delivering culture changes. They also made effective use of a new product development tool, the gateway mechanism, to drive the whole process.
Cases A and B fit together very well because the hard strategic supply chain design issues of Case A and the softer people issues of Case B were both key to the transformation of the plant. They are like yin and yang, like two sides to the same coin, says Professor Van Wassenhove. Many cases or courses emphasize one while forgetting about the other. Put differently, it does not help to have happy and motivated people in a lousy process and, conversely, a fantastic process won't lead you very far if the people are not motivated and capable of operating in it.
Managers who are faced with massive reorganization, or who have the task of changing management in an existing plant with older workers and strong unions, should be particularly interested in these case studies.