Liverpool wouldn't be most companies' first choice for a manufacturing location. But Dairy Crest's plant at Kirkby is a jewel in the corporate crown, churning out not just 50,000 tonnes a year of dairy spreads such as St Ivel Gold, Utterly Butterly and Vitalite, but also 20% of the pounds 1.3 billion group's profits.
The plant is 'well invested', as the Dairy Crest annual report puts it. But the secret of its recent achievements - and the reason for confidence in its future - is the fruitful combination of investment and the Merseyside workforce.
Such an outcome would have seemed unlikely at several stages in the plant's up-and-down history. Originally planned for the motor industry, it began life in 1957 making cheese, salad dressing and margarine for Kraft. For a decade it prospered, at one time employing 1,900. But in 1983 Kraft transferred cheese and dressings to the Continent, making 900 people redundant and leaving only margarine at Kirkby. 'It was the worst day in my life,' recalls one 26-year plant veteran, who is now a team leader.
Margarine turned out to be a nice little earner, however, and when Unigate acquired the plant in 1998 it promptly launched a pounds 20 million investment programme to accommodate its St Ivel spread brands on the new automated lines. But Unigate, too, suffered a change of fortunes, and last year, no longer deemed core, the St Ivel business was bought for pounds 87 million by present parent Dairy Crest. Not to put too fine a point on it, Dairy Crest got a bargain.
It wasn't just the investment. By 1999, says factory manager Stephen Booth, it had become clear that automation alone wasn't enough. The processes weren't under control, quality was variable and the incentives in the traditional overtime-based pay system were pulling management and workforce in different directions.
'We wanted to move to a more salaried approach where employees had an interest in doing more than just turning up and collecting the money,' explains Booth. So managers sat down with the unions (yes, it's a unionised site) and thrashed out a system of annualised hours that, after much painful experiment, has become the underpinning of a very different, improvement-based culture.
It wasn't easy, requiring substantial changes on both sides. But the benefits of all the hard work are now feeding through as the full potential of the earlier investment is realised: since 2001, plant efficiency is up by nearly 50%, wastage levels have plunged, and service levels have hit 99.5%. Another bonus: an important new value-engineering project that has just come on stream (on time and on budget) has a much higher specification as a direct result of the involvement of process operators and engineers on the project teams. 'They know best what works and what doesn't, even if they didn't tell us in the past,' says one manager. 'This just puts the decisions back where they belong.'
Both managers and workforce are aware that they are on to something at Kirkby - a hard-won system that benefits the factory, the business and employees themselves. Pay is good and holidays excellent. The testimony is an almost undetectable labour turnover rate of 0.5%. They also know that with only half the site in use, there is massive potential for expansion.
'The motivation for getting better? We could get more people off the dole and into good manufacturing jobs with a future,' says the team leader. Much more of this and Dairy Crest could give manufacturing on Merseyside a good name.