UK: Factories to emulate.

UK: Factories to emulate. - The winners of the Management Today/Cranfield School of Management Best Factory Awards provide ample evidence that Britain's manufacturers are once again a force to be reckoned with.

by Malcolm Wheatley and Colin New.
Last Updated: 31 Aug 2010

The winners of the Management Today/Cranfield School of Management Best Factory Awards provide ample evidence that Britain's manufacturers are once again a force to be reckoned with.

With a strong pound and recession-bound continental European economies redoubling the pressure on British factories, the effectiveness of British manufacturing industry matters as rarely before. Once dogged by a reputation for shoddy quality and confrontational industrial relations, British factory floors now regularly host the sort of admiring tours that were formerly the sole province of Japanese factories. As the winners of this year's Management Today/Cranfield School of Management Best Factory Awards make clear, these days it is British factories that amply repay careful study.

In part, this is due to those very same Japanese influences. It's a rare factory - certainly among our winners - that betrays no Japanese influences.

Five S housekeeping programmes, Total Productive Maintenance, quick changeover techniques, continuous improvement initiatives: these are now arguably part of the culture of British manufacturing.

And the outcome is not without a certain irony. As one of this year's entrants observed, continental European managers now visit his factory, look with disbelief at the all-too-visible evidence of the aforementioned cultural transformation - and shake their heads, muttering the German, French or Italian equivalents of 'It'll never work at home'. This year, as reported in the press, Cranfield researchers employed data accumulated during five years of the Best Factory evaluation process to carry out the first detailed comparison of British factories with their German equivalents.

They found that the British factories were comfortably ahead on a number of key measures, including absenteeism, ex-stock delivery performance, yield loss and changeover efficiency.

But just how deeply has UK Ltd's manufacturing renaissance taken hold?

While our winners are superb exemplars of manufacturing excellence, the judges - seasoned production professionals from Cranfield School of Management, Management Today, the DTI and the CBI - are forced to conclude that Britain's best factories may be outstripping the progress made by UK manufacturing industry as a whole.

The performance gap between Britain's best factories and its worst ones is stark. Among this year's 210 entrants, the average factory achieved on-time production of made-to-order goods 90.4% of the time, while the worst 10% managed it on only 76.5% of occasions. The top 10% of entrants achieved it 99.2% of the time - a creditable performance, but far short of the almost 100% record revealed by one of this year's winners, car seat manufacturer Bertrand Faure. Every 34 minutes, its Oxfordshire factory despatches 54 cars' worth of front and rear car seats to Honda's Swindon assembly plant: for each minute's delay should the seats not arrive on time, the penalty charge is £10,000.

When delivering orders ex-stock, the top 10% of factories managed to hit a success rate of 100%, against the average factory's performance of 93%. In contrast, the worst 10% managed to deliver ex-stock on time on just 81% of occasions - a performance so close to the success with which they could make-to-order as to suggest that the inventory stocks that they carry do little to help them. This is doubly unfortunate, given that the worst 10% of factories managed to turn their stocks over 2.7 times each year, as opposed to the performance of 12.7 achieved by the average factory, and even further from the stock turn of 24.3 achieved by the best 10%.

One of the best ways of achieving a higher rate of inventory turn is to manufacture Just in Time, producing in smaller batches but more frequently.

The top 10% of factories had brought their average component set-up time down to eight minutes, and their average assembly set-up time to two minutes.

But the worst 10% managed to take 180 minutes between component set-ups and 60 minutes between assembly set-ups. The fact that the numbers are so neatly divisible by 60 reveals that these managements have yet to shake off the habit of thinking of set-ups in terms of units of an hour.

And what of a factory's people? The worst factories among this year's entrants gave just one day of training to existing employees, and three days to new recruits - a performance way below the best factories, who reported respective totals of 40 days and 10 days. Among the factories celebrated in this issue, convenience food manufacturer R F Brookes is not alone in linking its strong commercial performance - sales have grown at a steady 18% per year since 1980, and sales-per-employee are 21% higher than five years ago - to a strong focus on its people's skills.

As is to be expected, our Factory of the Year - United Distillers' whisky bottling plant at Leven, Fife - exemplifies all these virtues and more: a whole panoply of well thought-through initiatives collectively bring about a commercial performance almost as warming as the well-known whiskies it produces.

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