Last Updated: 31 Aug 2010

Courtaulds Coatings

Activity: Paint manufacture

Task: Small-batch manufacture of high-performance coatings in a wide variety of packaging formats

Complexity: Medium

Size: 230 employees

Outstanding Features: Flexibility, continuous improvement, close-coupled manufacturing and business strategies

The recent, impressive progress made by Courtaulds' coatings plant based at Gateshead suggests that this factory will soon be an extremely effective force in the markets that it serves. Operations director Terry Scaife has a telling way of conveying just how much has been achieved: a slide show of photographs of the factory's production processes taken a few short years ago which clearly demonstrates the deficiencies in working practices that existed then, and thereby highlights the extent to which they have improved. Scaife wouldn't deny that the scenes they portray justify such epithets as 'dark, Dickensian and primitive'.

The factory manufactures paint, although 'surface coatings' is the preferred terminology. It is also one which more fully describes the complexity of the task. 'The paint is just a means of applying the required characteristics to the substrate,' explains Scaife. And 'required characteristics', it turns out, include a lot more than just colour. Under its well-known International Paints brand, the factory produces hi-tech protective coatings for structural steelwork, such as may be found on bridges and refineries and oil rigs. It makes antifouling and protective-cum-decorative finishes for the marine and yacht markets. Some of the ingredients that go into these products have to kill shellfish and plant life on contact; others have to withstand midwinter Atlantic storms.

'There's a whole range of complex chemistries involved,' Scaife emphasises.

Characteristics such as performance, drying time, the interval between applying one coat and another, also the application environment (temperatures in Korea extend from -12 deg C in the winter to 40 deg C in the summer), have helped to create a product range of over 1,500 different coatings. Factors such as price point, pack size and the language on the label complicate matters further.

Customers can be found in all shapes, sizes and locations. The weekend sailor, for example, expects to be able to pick up a 2.5 litre tin of antifouling at his local chandlery. A £40 million multi-millionaire's yacht could require £250,000 worth of paint during a refit. A supertanker may be painted between charters, or while loading or unloading at oil ports around the world.

Such diverse requirements call for good logistics and for a high degree of manufacturing flexibility. A switch to team-based manufacture brought a real improvement in flexibility, according to Scaife, and this has been further encouraged by a recent revision of the employee grading structure to reward multi-skilling. Frequent product changeovers, with smaller manufacturing batches, mean that deliveries of raw materials to the factory floor must be precisely timed. 'We're now hitting 97% delivered within a two-hour time slot,' says Scaife.

The need for flexibility extends to the warehouse, although over 85% of the factory's 550 different raw materials - bought from over 200 suppliers - are now available on guaranteed lead times of five days or less. The factory receives some 40 deliveries each day, yet the introduction of improved warehouse management techniques has seen inventory levels cut by 50% in just a year. Perpetual inventory cycle counting, the use of stock locations and pre-labelling by suppliers have all helped to raise warehouse productivity while further improving availability. At the finished goods end of the production process, although flexible manufacturing helps to limit stock levels, the variety of products, packagings and customers ensures that it cannot eliminate them. Therefore a 'bright tin' store normally holds thousands of unlabelled tins of paint and varnish, ready to be withdrawn from stock, labelled in the appropriate language and dispatched to any corner of the globe.

As a result of these changes and encouraging results, the factory's morale is obviously high. The work of its continuous improvement teams is very much in evidence. Much has been accomplished since 1992, when benchmarking first established the need for change. And an ongoing £6 million investment programme should help to ensure that there is a lot more to come.

Most Improved Factory Award - Sponsor: KPMG

KPMG advises manufacturing businesses on accounting, corporate finance, transaction services, tax, information risk management and consultancy issues. The consultants' experience ranges from strategic planning through to shopfloor implementation. Their supply chain, IT business strategy and performance improvement projects embrace both suppliers and distribution companies. KPMG is the largest auditor of The Times 1000 companies in the UK.

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