This year, our annual search for Britain's Best Factory produced a bumper crop of winners - and one outstanding overall Factory of the Year. In these pages is vibrant proof that the old economy isn't dead but is emerging revitalised from some of the toughest years in recent memory.
As ever, the process of selecting the best began with a questionnaire submitted to Cranfield School of Management. From this a shortlist was drawn up and the team of judges - experienced manufacturing professionals from Cranfield, the DTI, the IEE and Management Today - began visiting each factory to assess its excellence on the ground. They need to see a factory working.
Those that emerged from the process shared some familiar characteristics.
Good people-management practices, for a start. A determination among the factory's management team not to be second-best, for another. And a compelling ability to tune out the static and concentrate on harnessing the factory's resources to its mission, and the needs of its customers. Sexy initiatives don't count if they don't further a factory's strategic purpose.
As ever, new trends emerged. Excellence in supply-chain management, as well as in manufacturing, is increasingly important, as factories such as Krone (UK) Technique and Leyland Trucks amply illustrate. The links between a factory, its suppliers and its customers, can make or break an operation - and poor suppliers let everyone down.
This year's winners were also strong exponents of 'the visible factory'.
They were at varying stages on their journeys, but toolsets such as Japanese Five-S programmes are no longer just a fashionable initiative but have become the bedrock on which manufacturing excellence is built. Muddled-looking factories underperform; clearly labelled and signed ones don't.
From shadowboards to kanban squares to Standard Operating Procedures: clarity of purpose aids performance. For proof, look no further than NEC Technologies, or, again, Krone.
Several winners were management buyouts, most dating from after the inception of these awards in 1992. In each case the management had purchased the factory from a large international firm, often in the face of appalling commercial prospects. Leyland Trucks were in receivership, for example, while Wrafton Laboratories had a factory slated for closure and almost nothing by way of an order book. But being financially stretched can turn out to be an ideal spur to manufacturing excellence, provided that management responds with intelligence, and not just an axe.
Finally, our Factory of the Year. What does excellence in action really look like? Search no further than Elida Faberge's plant in Leeds - one of the best factories of any year.
FACTORY OF THE YEAR
BEST HOUSEHOLD AND GENERAL PRODUCTS AWARD
WINNER: ELIDA FABERGE
Unilever's Elida Faberge plant in Leeds is not only our overall Factory of the Year but also quite simply one of the best factories that the judges have ever seen. Almost any characteristic of manufacturing excellence is present here in abundance, as is a great deal of excellence in supply-chain management. Throw in some world-class achievements in human-resource management, and the combination is deadly - at least to the competition.
The factory's mission is simply stated. 'We're the largest aerosol factory in the world,' says works director Gary Calveley. 'We'll produce 300 million aerosols this year.' But that's not all: while half the Leeds factory produces deodorants in aerosol form, the other half makes deodorants and other personal-care products in a variety of packaging forms: sticks, roll-ons, creams and liquids. More than half the output is exported.
Together, seven of Europe's most difficult-to-please customers - Sainsbury's, Tesco, Boots, Asda/Wal-Mart, Carrefour, Intermarche and Heijns - make up 55% of total sales. The factory is the sole point of contact for Asda/Wal-Mart, which wants to deal with Unilever's sprawling ice-cream-to-detergents empire as a single entity. The firm's Van den Burgh margarine plant in Purfleet, a previous Factory of the Year, performs a similar role for Tesco.
The factory is one of the most complex within Unilever, says Calveley, being tasked with producing a portfolio of 30 brands in some 400 variants and sizes. Last year, Unilever announced its intention to concentrate its product portfolio around 400 global brands, down from 1,200 regional and national brands. Many of the winners are here already; others will arrive. 'Our complexity will reduce, but our volumes will go up,' says Calveley.
What makes the factory so good? The best operative-based total productive maintenance that the judges have ever seen, for one thing: clearly specified procedures, problem-recording charts, perspex-sided maintenance trolleys with colour-coded lubricants and cleaners, glass inserts let into machinery so that belt drives, relays and actuators can be inspected without removing the covers, superb workshops ... the list goes on.
The best human-resource management initiatives, for another. 'Every single person on site is paid not according to their trade union's ability to negotiate with me, but according to their achievement of personal objectives,' says Calveley. The evidence is there in abundance. 'Empowered' is a much over-used word, but the scorecard of the benefits that the factory has achieved through unlocking the potential of its workforce is stunning. Yield improvements, productivity improvements, set-up time reductions, continuous improvement, workplace management, environmental benefits: a visit to Leeds would dispel any scepticism about the effect of having a committed workforce.
What has been achieved hasn't been cheap or quick, says Calveley - he hired a team of full-time coaches to bring about some of the initiatives - but the payback has been immense. Unilever isn't a company that throws money about lightly, he adds: when money is spent, a return is expected.
And rewards turn up in unexpected places. The judges have consistently noted a correlation between a plant's manufacturing performance and its safety record. True to form, this factory is the safest Unilever site in Europe, with over two million hours without a recordable incident.
And it's a performance that starts right at the factory gate: the plant's safety induction video, compulsory viewing for every new employee and all visitors, is - again true to form - the best that the judges have ever seen.
BEST ELECTRONICS AND ELECTRICAL FACTORY
SPONSOR: UPS WORLDWIDE LOGISTICS
WINNER: KRONE (UK) TECHNIQUE
Despite its relatively small size - just 300 employees - Cheltenham-based Krone (UK) Technique is widely recognised for manufacturing excellence.
Since it last appeared in these pages in 1997, Krone has sought new and different ways of leveraging its expertise and capabilities. A single office, for example, now contains everybody involved in satisfying the customer: from production controllers to sales personnel.
Acquired last year by GenTek, a US engineering conglomerate, Krone manufactures telecommunications connectors and cable assemblies. That once meant the voice telephony market, explains director Sarah Smith, and that is still important: Krone's telephone systems' connectors are specified by 49 telcos worldwide. Krone has 90% of the UK market, and 25% of output is exported.
In the plastic-injection moulding shop, quick changeover tooling achieves same-colour component changeovers of just seven minutes, while kanban-controlled supplies of plastic pellets are pumped direct to relevant machines through colour-coded piping. Kanbans, again refined in recent months, also control supplies of plated strip-metal to the presses that punch out tiny connector strips. Many companies put in a kanban system and forget it, but that's not Krone's style, says Smith. Equally, the scheduling was done by computer, until experiments showed that a visual planning board in conjunction with kanbans produced better results.
The next stage of the production process is assembly. Seven automatic-assembly machines churn out the bulk of the output: they are 15 years old, but constantly refined and upgraded. So are the operating procedures.
Judges particularly liked the digital photographs placed beside each machine showing its operator wearing the appropriate protective clothing to clean and set it.
Lower-volume products are assembled in cells, whose operators are given virtual autonomy over supply-chain replenishment. The purchasing function negotiates prices and selects suppliers - but over 85% of purchase transactions stem from the cells, usually as 'faxbans' sent from fax machines located in individual cells. Productivity levels are also impressive: thanks to slick engineering and Japanese-style continuous improvement efforts, 20 people now produce 60,000 of a particular connector each week, in contrast to the 37,000 produced by 31 people a few years ago.
These days, telecommunications also means data networks, and Krone's assembly operations have had to accommodate new devices and technologies.
Again directly linked to suppliers and customers, these work at a slower, more painstaking pace, as befits hand-assembled fibre-optic cables and 400-connector cable harnesses.
Slower for now, that is. If Krone's record of achievement is anything to go by, things won't stay that way for long.
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BEST ENGINEERING FACTORY
SPONSOR: BOURTON GROUP
WINNER: LEYLAND TRUCKS
Very few of the vehicles built at the Leyland factory wear a Leyland badge. These days, this appears only on trucks destined for the military market. Instead, Leyland will be assembling DAF, Foden, Kenworth and Peterbilt-badged vehicles - the latter two marques betraying the presence of a new American owner, the Paccar Corporation. The product range of Foden, another acquisition, was incorporated into the Leyland workload last year.
'We're in the mass-customisation business,' says managing director Stuart Heys. 'We'll build 60 trucks today, and unless there's a fleet order going through, every single one of them will be different.' What's more, thanks to a decision to consolidate production from two assembly tracks onto one, those 60 different trucks will be following each other down the same line.
It's a staggering command of complexity. A single truck, points out chief engineer Keith Howard, offers no fewer than 21 different wheelbase choices, eight weight options, five gearboxes, 27 axle ratios, left- or right-hand drive, steel suspension or air suspension, optional ABS, various cab and seating options, 900 paint colours - the list goes on. And on.
How is it achieved? Information technology plays a part, certainly. The standard-issue Oracle system that runs the factory has been carefully augmented by custom-built programs in three areas critical to product variation control, reveals systems manager Brian Metcalfe: order management, assembly management and plant scheduling. But systems alone can't engender the 'can do' attitude so clearly displayed by everyone at the plant. In part, this is developed through necessity, says Heys, a veteran of the company. When DAF went into receivership in 1993, he led the buyout team that ran it for five years before selling to Paccar. 'It gave everybody a sense of common purpose,' says Heys. 'We hadn't always had that before.'
He recalls the DAF collapse. 'The headquarters is obliterated in minutes: you stand or fall on your own.' The obliteration extended to Leyland, too - Howard's engineering team, for example, went overnight from 368 people to 38. 'There's only so much space in the lifeboat. You have to choose your people very carefully,' says Heys.
But the fact that they survived the receivership was largely down to the supplier base - much of which had been openly hostile, thanks to late payment by DAF. 'The one thing we've said is that we'll never, ever pay a supplier late. We paid them early for the first 12 months after the buyout: building supplier confidence was critical.' The move paid off.
At Leyland Trucks, responsive suppliers, slick scheduling systems and a willing attitude have created a world-beating flexible factory.
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BEST PROCESS FACTORY
WINNER: WRAFTON LABORATORIES
Believe it or not, all the Beecham's Powders in the world come from this factory,' says Wrafton Laboratories' production director Alan Richards.
The same is true of dozens of other household medicines. Wrafton, located in the small North Devon market town of Braunton, last year churned out some 721 million tablets, 169 million capsules, 19 million tubes of toothpaste, 21 million suppositories and 8 million bottles of cough syrup.
From unpromising beginnings - the plant was shut by its former owners in 1992 and bought by its management team - Wrafton has become Europe's leading contract manufacturer of over-the-counter medicines.
Such regular staples as Phensic, Settlers, Lemsip, Germolene and Diocalm are produced under contract for pharmaceutical firms Roche, Reckitt & Colman, Warner Lambert and SmithKline Beecham. And from the 24 drug product licences that it has developed or acquired, it churns out own-label medicines for the likes of Sainsbury's, Asda, Tesco and Superdrug.
And business is booming. For one thing, says MD Brian Sherwin, consumers are becoming aware that generic drugs are as effective as the big brands, causing the market to grow at 14% a year. For another, Wrafton's own-label volumes are growing even faster, at 57%, as the business outperforms competitors and wins delivery performance accolades from customers.
How? A tight entrepreneurial focus is part of the formulation. When Sherwin and his colleagues did the management buyout, they bought a building and some equipment, but little by way of an order book. The workforce dropped from 430 to 330 overnight - but output went up, as absenteeism fell away and productivity soared.
The business was sold to consumer group McBride last year, but Sherwin and his team retain a stake. There's a zealous focus on waste elimination: aspects of the business as wide-ranging as packaging supplies and electricity consumption are rigorously reviewed. Inevitably, wringing the maximum volume and variety from the plant's 36 production lines is another key plank of the strategy. A digital and a video camera on the shopfloor record the evidence if something goes wrong. Changeovers are engineered to conserve capacity. Toothpaste-mixing cycles have been reduced from 16 hours to six, and tablet line changeovers from 27 minutes to seven. Engineer Keith Watts shows off a custom-designed changeover trolley, carefully loaded with colour-coded parts, and digital photographs showing how they are fitted.
Over the past seven years, 157 whole new formulations have been added to the product range, and Wrafton's gung-ho management team reckon there's room for many more. 'The export and prescription-only markets are largely untapped,' says Sherwin.
BEST SMALL FACTORY
SPONSOR: INVESTORS IN PEOPLE
WINNER: HAMILTON ACORN
Nothing in his business is in any way associated with a 'pile it high and sell them cheap' philosophy, stresses Dennis Marrison, managing director of Norfolk-based Hamilton Acorn. The Hamilton brand, established in 1811, is regarded as the doyen of paintbrushes. The Acorn brand, dating from 1746, is a premium DIY brush found on the shelves of Do It All, but priced above the cheap-and-cheerful slap-it-on brands.
Whereas many of the company's competitors use manually intensive manufacturing technologies that have changed little in a hundred or so years, Hamilton Acorn has invested in developing manufacturing innovations. For example, thanks to its patented wedge, the bristles don't fall out. And thanks to its patented way of applying resin, the brush-heads stand to cure for just 20 minutes; competitors' brushes must stand for 24 hours.
Highly automated high-tech assembly cells produce 65% of Hamilton Acorn's output. But it wasn't always that way, concedes production director Howard Waghorn. 'Our competitors encourage the belief that paintbrush manufacture is a black art: it isn't,' he says. Although automation and low-inventory manufacturing techniques are awkward to apply in an industry that combines wood with 70 kinds of pig bristle imported from China, the challenge isn't an impossible one.
More than 370 staff worked in the factory when Waghorn arrived in 1990; the number is now 150, and output is substantially higher. Typical of the change has been the elimination of a manual bristle-sorting and cleaning operation. In its place is an automated four-minute mixing, sorting and vacuuming cycle. So, goodbye 12 people wearing Mackintoshes - hello Sharon, briskly loading and unloading bristles as they enter and leave the automated process.
Equally effective has been a process of product rationalisation, intended to minimise inventory levels while boosting manufacturing efficiencies.
Many brushes have the same head; only the handle and methods of attachment vary. So the Jewson own-brand has the same head as the pricier Hamilton brand, although the latter's wooden handle and optimised balance are unmistakable.
As the manufacture of the brush heads is the most demanding and cost-intensive part of the process, it's a policy that plays to the strengths of the automated production cells, costing around pounds 200,000 each, in which Waghorn has invested. Their speed is controllable by the operators - thanks to an individually based incentive scheme, operators have every encouragement to increase the speed to the maximum with which they feel comfortable.
They also have an incentive to keep the machines clean, well-maintained and optimally set: each disruption to production hits the pay packet.
Such schemes have fallen out of favour in recent years, and Waghorn is happy to concede that a group-based scheme is on the way, but the intention is to spread the sense of commitment to output levels, not dilute it.
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MOST IMPROVED FACTORY
SPONSOR: ENGLISH PARTNERSHIPS
WINNER: GUINNESS PACKAGING
Guinness Packaging's canning and bottling plant in Runcorn was a welcome surprise in several respects. Creating dynamic enthusiasm for change and continuous improvement among a mature workforce at a 30-year-old site isn't easy. Nor is achieving world-class levels of up-time and throughput on high-speed canning and bottling lines.
But Guinness Packaging - also highly commended in the Best Household and General Industry category - met these tough challenges with ease.
The plant's mission is simple. It doesn't brew the beer itself but puts it in bottles and cans that are exported to 150 countries. Its commercial objective is to realise the lowest possible operating costs by squeezing more volume from existing equipment.
Under the structure of parent company Diageo, the sales and marketing divisions that are the plant's internal customers are quite at liberty to turn to third parties if the Runcorn factory's costs are uncompetitive, points out general manager Ian Phillis. Instead, the flow of business is in the other direction, with the plant now serving other breweries such as Scottish Courage, Greene King, Wolverhampton & Dudley, Carlsberg Tetley and Caledonian. What's more, it also cans and bottles Scottish Courage's range of supermarket own-label brands for the likes of Tesco, Sainsbury's, Asda and Somerfield. Endorsements don't come much stronger.
How is this efficiency achieved? Much of the answer lies on the factory floor, where operatives such as John Knox and Tony Gavin describe the impact of various improvement projects. 'We're not just used as arms and legs any more, but as brains,' says Knox as he relates how engineering changes to a filling head cut waste by 13% while increasing line speed from 450 to 700 cans a minute.
Gavin describes how more detailed fault recording and analysis enabled his team to pinpoint problems for engineers, resulting in a steady elimination of downtime while raising pressure on throughput. This reversed the conventional thinking in the industry that faster lines are inherently more troublesome.
'This line was designed to run at 700 cans a minute,' says Phillis, pointing at a blur of whirling action. 'We're achieving 1,300 cans a minute.'
Thanks to such initiatives, the plant has increased capacity from 800,000 hectolitres in 1990 to two million today, with a target for the future of 2.8 million hectolitres - and mainly by using the existing asset base more efficiently. Just as important is the plant's ability to innovate: 'Runcorn,' Phillis points out, 'is the home of the widget.' Widgeted Guinness?
Designed to be drunk ice-cold, straight from the bottle? Phillis thrusts a bottle forward. 'Cheers!'
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BEST ELECTRONICS AND ELECTRICAL FACTORY
HIGHLY COMMENDED: NEC TECHNOLOGIES (UK)
Japanese electronics giant NEC's mobile phone factory in Telford has a curious mission. Its 680 employees, five surface mount lines and collection of assembly cells are not tasked with the mass production of mobile phones at all. Instead, explains director and general manager Rob Shore, the factory's objective is to achieve the fastest possible time to market.
Once a mobile phone is in production, and the processes de-bugged and fine-tuned, manufacture is moved elsewhere - to a UK or European outsourcing subcontractor, or to an NEC sister factory in China. Indeed, says Shore, a phone may be produced at volume for only a matter of months before being succeeded by a newer model. So, as mobile phone factories go, 'we're not that highly automated: our investment has been in the people, not the technology.' As a result, know-how, understanding and improved processes are as important for the plant as the phones it makes.
Some operations are more labour-intensive than is the norm, but, as observing a shift-change makes clear, the factory's workforce can be readily switched from one task to another. The kanban-based cells, too, are flexible: their focus is on learning how to produce phones in the slickest way possible, and they are built to produce not just one phone but generations of them.
A great deal of experimentation is involved as products and processes are fine-tuned, explains operations manager Adam Polisena. Four operatives have just returned from two weeks working on a Japanese assembly line, learning how to produce the latest model. 'The whole point of what we do here is to product-validate the process, so that the drop in yield when we outsource it is very low,' he says. Just as the factory's operatives go to Japan, subcontractors' engineers and operatives visit Telford regularly.
Despite the ramp-to-market mission, state-of-the-art mass-production improvement methods, such as Five-S techniques, haven't been overlooked - simply adapted as required. The issue of parts from the stores, for example, combines kanban techniques with an innovative supermarket-style checkout system. 'Visual factory' approaches are much in evidence, with clearly delineated floor areas, signage and shadowboards for cleaning and maintenance equipment, and 'care points' are clearly identified.
And operatives' flexibility extends to working hours. When seasonal peaks stretch the factory's resources beyond its normal five-day, three-shift capacity, says Polisena, employees work two additional 12-hour weekend shifts in turn, one weekend in three.
BEST ENGINEERING FACTORY
HIGHLY COMMENDED: RYOBI ALUMINIUM CASTING (UK)
When Ryobi Aluminium Casting last appeared in these pages in 1994, the factory in Carrickfergus had been in production for two years and had 45 employees. Its sole customer, Ford, had asked the Japanese multinational - the largest independent die-casting operation in the world, with factories in Japan, the US and China - to establish a beachhead in Europe. The car-maker was unable otherwise to obtain the quality and cost-effectiveness of the large and complex aluminium castings that were increasingly required to replace heavy steel with lighter aluminium.
The solution: Ryobi's die-casting technologies and techniques. Some processes are patented, such as a vacuum system that evacuates the air ahead of molten metal, moving at 45 metres a second through the complex interior channels of a two-metre-square die that weighs 17 tonnes. Others are not: for example, all Ryobi factories apply a Japanese-sourced flux in a particular way, because it produces better castings. Competitors could, but don't.
As automotive companies now move to replace aluminium with still-lighter magnesium, achieving a 40% weight reduction, such expertise is increasingly important. So too is the ability to master new skills such as cold-chamber casting and laminar-flow techniques, which were not around in 1994. Then, as now, the Ryobi factory makes the difficult appear effortless as flawless castings emerge from the nine 1,650-to 2,500-tonne die-casting machines that form the plant's centrepiece.
Managing director John Hughes is proud of what he and his management team have achieved. Employee numbers have grown by 100, and the customer base now embraces not just Ford but Visteon, Saab, Isuzu, General Motors and Jaguar, producing transmission and clutch cases and sump and valve bodies.
The investment programme is still under way, with plans for more new casting machines, some to produce two-litre V6 'open deck' engine blocks - a first for the plant. It's only the start, as more vehicle manufacturers get out of the process and hand the work to a business where die-casting is a core competence - which, increasingly, means Ryobi.
'More products, more customers, more variants. It's a permanent race to instal capacity ahead of the orders,' Hughes says.
BEST SMALL FACTORY
HIGHLY COMMENDED: CUSTOM INTERCONNECT
This is a wysiwyg business - 'What you see is what you get,' insists David Stokes, part-time chairman of the Whitchurch, Hampshire-based Custom Interconnect and full-time academic at Kingston Business School. At first glance, what you see is two industrial units so stuffed with high-tech equipment that they border on Japanese levels of space utilisation. But peer closer and Japanese-style micro-engineering excellence also emerges.
Custom Interconnect is a small electronics subcontractor. With just 43 employees - including Stokes, co-founder Nick Edwards, MD John Boston and commercial director Carolyn Gambles - fluidity in roles is expected: everybody has two, if not three, jobs. And the pattern extends to the manufacturing operation, which - part laboratory, part factory - excels at deploying a clutch of niche skills that others abandon in frustration.
Products border on the unproducable - at least reliably, at volume and at a profit. Take the tiny strain-gauge probes that it manufactures for metrology specialist Renishaw: every device, 1in by 0.5in, contains 50 separate tiny components, each painstakingly placed and bonded. Clean room and semi-clean room conditions are obligatory; so too are skilled operatives adept at working with microscopes.
A secret of the business's success, explains Stokes, is knowing when to use automation - and when not to. Another lies in redesigning products to aid manufacture: the service is provided free, in exchange for a fixed-term guaranteed contract for making the finished product. Other products include GPS-enabled emergency locator beacons for yachts, and electronic gunsights for American police force pistols.
Despite its size, says Boston, Custom Interconnect has world-class ambitions: it recently took the entire workforce on a coach to see Renishaw's lauded factory in operation. Such benchmarking visits pay for themselves quickly: about to spend pounds 1,000 on a video camera to let operators check the other end of a 25-foot furnace, he chanced to spot a company using a pounds 5 mirror to do the same job. A kaizen continuous improvement programme yielded a saving of pounds 26,000 with the first identified improvement.
But not everything runs smoothly. Across Europe, minnows like Custom Interconnect have found it difficult to source the components to manufacture their products, explains Gambles. 'In a single week, the lead time for one component went from 10 days to 16 weeks, then to 51 weeks.'
The solution: scouring the globe for supplies using e-procurement portals and search engines. 'We've moved from buying from the British distributors we used to deal with to worldwide sourcing,' she says. 'Our buyers are on the internet all day, and coming in outside normal hours to talk to suppliers in Japan and Australia.'
And, so far, they've kept going.
MOST IMPROVED FACTORY
HIGHLY COMMENDED: FEDERAL-MOGUL FRICTION PRODUCTS
If Federal-Mogul sounds unfamiliar, the name Ferodo won't. The Ferodo brand has been stamped on the brake pads, lining and shoes that leave the company's Chapel-en-le-Frith factory near Buxton since 1897. And Ferodo is still on the box today, as a visit to Halford's confirms. But the name above the factory gate is Federal-Mogul, the fast-growing US automotive components conglomerate that acquired the business in March 1998.
For site director Henri Ramczyk and his management team of Ferodo veterans, the change of ownership brings challenges as well as opportunities. The varying fortunes of the British motor industry have taught them that the price of survival is a relentless focus on cost control, productivity, quality and innovation. Today's output levels - 23 million brake pads and 19 million linings for the likes of Ford, Bosch, TRW, Unipart and Halfords - are testimony to their success in meeting that challenge. Yet within the group they are just another friction products factory, fighting for orders with a Czech sister plant that is newly equipped and pays lower wages. For all the location's history, displayed in a museum on the site, its 1920s buildings and dated equipment must be compensated for by a willingness to go the extra mile to satisfy customers.
It seems to be succeeding: the unit produces 49% of the 'original equipment' brake linings for the European vehicle assembly market, as well as 100% of the 100,000 pads per week fitted to the Ford Focus, irrespective of whether the vehicle is made in Europe or the US. The wake-up call, says Ramczyk, was an audit conducted by a German customer in 1990, who said: 'The factory is a lumbering dinosaur, asleep in the hills of northern England.'
Management launched a revolution. A hierarchical organisation was replaced by a flat structure. Team-based incentives supplanted piecework and union/management relationships were abandoned in favour of a less adversarial, more open relationship. High levels of work-in-progress and long lead times were tackled by kanban-based scheduling, and with kanban rules that have been revised over the years. An operation buffered by 12 kanbans of inventory when the rules were set up is now buffered by just two.
The result? Turnover-per-employee, pounds 26,000 in 1992, reached pounds 84,000 this year. And a history of inadequate and reducing profitability has been replaced by consistent year-on-year improvements. It's not perfection, but progress suggests the factory has as rich a future as it has a past.
JUDGES' SPECIAL AWARD
WINNER: CASTROL (UK)
Behind the scenes at most process-based blending and mixing operations lurks a dire right-first-time record. The quality of the product that reaches the customer might be impeccable, but often at the expense of rectification and re-work loops.
Not at the Stanlow Works of Castrol, now part of oil group BP. Its blending operation achieves a remarkable 99% right-first-time performance, thanks to a combination of information technology, empowered operatives and sensible disciplines. This earns the plant our annual Judges' Special Award, recognising world-class levels of achievement in particular areas of a factory's overall performance.
The Stanlow site dates from 1947. Ten years ago its future was in doubt, rescued only by a series of painful initiatives. A lean three-tier structure replaced a top-heavy nine-level organisation, slashing employees from 280 to 100. Empowerment is now the norm at Stanlow, says Chris Kenny, head of manufacturing. 'We've just no room for checkers, supervisors and other non-value adding personnel.'
The market has changed, too. Modern engines and industrial applications consume much less oil than those of yesteryear, says Kenny: instead of 3,000 mile oil-drain intervals, 10,000 and 20,000 mile intervals on car engines are now common. And with lower overall volume has come a proliferation of products, each designed for a specific purpose: Stanlow has to produce over 3,000 unique products from some 275 master grades of oil blended from a mix of 50 base oils and 223 additives.
This diversity is greater than that achieved by any of the other 56 Castrol plants worldwide, adds Kenny - but that brings its own challenges, especially in the blending area itself, which must keep a diversity of downstream operations supplied with blended oil. High-speed 150 bottles-a-minute filling lines for one- and five-litre garage forecourt and supermarket oils; bulk tanker delivery for industrial users; and 205-litre drums for workshop use - none must stop.
Today's 99% right-first-time level compares with just 60% five years ago. Pinning the improvement on any action is difficult, says Kenny, but the key initiatives are clear enough. Simple categorisation based on recent history, for example: easy-to-make oils go straight through to blending, while more difficult variants are first mixed on a sample basis to spot potential glitches. Improvements to the control system helped too, ensuring that the quantities blended were exactly those called for, slashing over - and under-feeds to a tenth of their previous monthly incidence.
Laboratory-based testing was replaced by online viscometry carried out by the operatives themselves. Samples that used to take three hours to analyse now take 30 minutes, significantly reducing the cycle time as well as improving capacity through freeing up blending vessels sooner.
There's still a lot to do and, in places, Stanlow shows its age. But with performances like these, coupled to a 35% reduction in production costs per tonne over the past three years, the plant has a future as well as a past.
