UK: Category Winner - Small Business.

Lamerholm Fleming,

Stevenage

Sponsor: BNY International

ACTIVITY: accelerometer manufacture

TASK: design and manufacture of combined mechanical and electronic devices

COMPLEXITY: medium

SIZE: 59 employees

OUTSTANDING FEATURES: breadth of production technology, technical expertise in chosen market, flexibility, extent to which manufacturing strategy complements commercial strategy

Michael Kellett, technical director of tiny Stevenage-based Lamerholm Fleming, succinctly summarises the company's strategy for competing globally with giant electronics multinationals. 'We're into niche markets,' he says. 'We don't want to make millions of anything: hundreds, maybe, or thousands - but no more.' Despite approaches from several of its blue-chip customers, the company has cannily stayed out of the market for vehicle airbag actuators, correctly identifying the opportunity as one that would soon swamp the business.

Although seventy-something Peter Kellett formally holds the title of managing director, these days it's deputy managing director Sarah Kellett and her brother, Michael, who make most of the decisions. Growth and profitability, they have found, come more easily when the factory focuses on the technically complex and hard-to-make end of the accelerometer market. Hopes are high for a small battery-powered accelerometer, christened ShockLog, that is designed to accompany freight shipments and monitor the knocks and shocks to which they are subjected in transit.

Whether it's the engine knock sensor that the company makes for Rover, the adaptive damping suspension control for Rolls-Royce, or the banknote thickness sensor for the ATM cash dispenser manufacturer, NCR, (which prevents the machines coughing out the wrong number of banknotes), the strategy is the same. First, identify a problem; then develop a technically-advanced solution, patent the design, and sell the product.

Then make it. When one of Michael Kellett's designs called for drilling a hole through the middle of the piezo crystal at the heart of an accelerometer - producing something roughly the shape and size of a miniature Polo mint - suppliers of the crystals said it couldn't be done. Undaunted, father and son designed a machine to undertake the drilling, which they then built. 'We now field enquiries from people asking exactly how we do it,' adds Sarah Kellett.

The same sort of determination underpins the precise placement of solder flux on the strain gauge component of a banknote sensor: the solder joints are so delicate that humidity and temperature considerations must first be taken into account. Then the flux itself is applied, by hand, through a syringe needle under an 8x magnification microscope. Once assembled, the device needs calibrating: with exquisite care, operatives delicately place each device on a test jig. This not only carries out quality checks on the gauge, but also specifies to the operator, via a computer screen, which three or four tiny chip resistors (out of a possible 70 or so in an adjacent carousel) must be carefully hand-soldered on to tiny pads on the circuit boards in order to bring the device within calibration limits.

For such a small company, the range of production technologies is impressive: printed circuit board assembly, surface mount flow solder equipment, a machine shop, test and calibration equipment - it's all there, exactly as one would find it on the factory floor of a multinational giant but optimised for speed and flexibility rather than low cost and high volume.

Manufacturing excellence is also there in abundance, largely through a number of carefully chosen initiatives which, like the company's production technologies, have been selected for what they would contribute to the organisation. 'We're very reluctant to undertake things just because they are popular, or because someone thinks that we should undertake them,' says Sarah Kellet. 'We always ask ourselves: what's in it for us?' By far the biggest step change, she says, came through achieving Ford's Q1 quality standard, which brought with it a whole language of problem resolution.

'It forces us to track issues back to their real root cause, rather than their apparent root cause,' she explains.

SPONSOR: BNY INTERNATIONAL

BNY International Limited is a subsidiary of the Bank of New York and is the UK's leading and largest provider of asset-based finance. An innovative and flexible approach means that BNY International can release cash tied up not only in a company's sales ledger but also in their inventory, fixed assets and even intangible assets such as licences and trademarks. The company has offices around the country.