Sponsor - LK Global Manufacturing Systems (UK).
'I have seen the future - and it works,' enthused an awe-struck observer of post-revolution Russia. On visiting this year's Factory of the Year, United Distillers' bottling plant at Leven, Fife, the reaction of the judges was comparable. The Leven factory is a shining example of just what can be achieved by a management and workforce determined to succeed.
In a unionised plant dating from the early 1970s, female operatives undertake maintenance activities and change lines over from one product to another - employing Japanese-style, quick-changeover techniques and line-side automated tool stores to do so. In the maintenance department, a fitter happily points to the success of a 'Values and Standards' programme that rooted out former colleagues whom he openly describes as 'belligerent and obstinate'. Now, he says, 'The people that are left are those that have the right attitude.'
Team leaders are expected to achieve savings of at least £20,000 annually.
One of them proudly demonstrates how her team has systematically tackled inefficiencies and niggling maintenance problems to raise the line speed from 55 bottles per minute to 70 bottles per minute. The line in question was thus able to take advantage of an export opportunity that cracked open the Korean market, boosting the volume of Dimple whisky from annual sales of 600,000 cases to 2.1 million cases. On an adjacent line, a colleague displays with equal pride one of the most impressive demonstrations of a Japanese-style Five S housekeeping programme that any of the judges can recall seeing. It comes as little surprise to learn that the factory's approach to measuring the effectiveness of the third S - Shine - is a distinctly hands-on audit by someone wearing white gloves.
'We're trying to align a 1970s factory with a year-2000 marketplace,' explains John Spiers, director of production. Spiers and his team are under no illusions about their mission. Overall volumes in the whisky market served by the plant have been stable for a quarter of a century: profit growth hinges on squeezing out costs and making each asset work harder. Not so long ago, Spiers observes, the company had seven whisky bottling plants; today it has four.
In the past six years, the Leven factory's payroll has shed 400 jobs through a combination of automation and re-engineering.
Even today the process of rationalisation is far from complete. Yet output has never been higher: the factory should achieve over eight million cases this year, Spiers reckons, 'which will be a record'. In the drive to squeeze more from its existing resources it has just eliminated two more bottling lines, shifting the output onto the remaining 19. To the classic Four Ms of the manufacturing manager - machines, materials, manpower and methods - 'we've added a fifth M: Move', says Spiers. 'If a line doesn't add value, we move it out.'
In addition to the Dimple brand, the Leven factory bottles a number of other well-known blends and malts, among them Dewar's White Label, Old Parr, Haig Gold Label and Black & White. The task is a surprisingly complex one: a single blend of Dewar's might contain as many as 27 malts and five grains drawn from all over Scotland. Each is emptied from the wooden cask in which it has lain for, in some cases, 25 years, and then poured down sluices to begin a blending process that combines the traditional with the modern: electronic mimic boards control each batch's progress through from initial disgorging to the giant oak blending vats in which it rests before being bottled. Once it reaches the bottling line, each stage is controlled by superbly detailed process control documentation - yet another instance of the factory's understated excellence.
But it is in the way that the Leven plant deals with some of the obvious difficulties associated with its task that most clearly displays its dedication to excellence. With over 1,200 discrete end-products, packaging complexities abound - and empty bottles and boxes take up room. An inventory reduction programme has seen the 66 days of packaging stock that the factory held in 1992 cut to 13, with a further improvement to 10 days targeted for next year. Yet the problem hasn't simply been dumped on suppliers: Spiers proudly shows off an automated carton-erecting line, and it's clear that a great deal of thought has gone into a programme of packaging rationalisation.
What's more, whisky production is both seasonally variable and subject to sudden peaks in demand as evidenced by the boom in sales in Korea. In another example of how the factory turns adversity into advantage, Spiers reveals that the overtime bill has fallen from £1.5 million per year to virtually nil by adopting an evening swing shift. The contracts of people on this shift call for them to put in 19 hours per week, with a commitment to another 19 hours if required - without any additional overtime premiums. Pension benefits are based on the contracted 19 hours, not the actual hours worked.
Management's experience has been that the swing shift's productivity performance is 10% higher than the factory average; its employees also demonstrate greater job flexibility. Started as an experiment with a handful of people a few years ago, the swing shift now employs 125 - 35 of whom are temporary employees, which further enhances the factory's flexibility.
'We've had to prove ourselves,' says operative Nancy Gilmour, who - like every member of the swing shift - was initially on a temporary contract. She might not realise it, but it's an attitude that sums up the whole factory.
Activity: Whisky bottling
Task: Achieving a high level of customer service while simultaneously operating at levels of the highest quality and lowest cost
SIZE: 750 employees
OUTSTANDING FEATURES: Process control, employee involvement, continuous improvement, productivity improvement, material flow, Total Productive Maintenance.