Last Updated: 31 Aug 2010

Premier Exhaust Systems.

Premier Exhaust Systems stands head and shoulders above every other entrant for this year's awards. The Coventry factory, which is part of Unipart Group, the management-owned automotive components supplier, produces exhaust systems for a variety of vehicles. In all, some 130 different systems are produced, from 500-odd components which are either bought-out or fabricated in-house.

Manufacturing operations are in no sense complex: kit the components (there are approximately 20 components to the average exhaust system), weld, test, paint and ship. Deliveries are despatched to customers in the motor industry 'just in time' every two-and-a-half hours. Indeed, simplicity is the essence of the operation. Quality systems, for example, are nothing if not robust, relying more on go/no-go gauges and fitting rigs than on statistical quality control charts. Managing director Frank Burns is a powerful advocate of 'simple layouts, simple structures'. Beyond that, he advises, 'Become a house-keeping fiend and, above all, introduce teams, teams and more teams'.

Manufacturing tasks are overwhelmingly cell-based. Dedicated (or semi-dedicated) cells occupy most of the factory. Changeovers are in consequence minimal, which helps to ensure reliability of delivery. Burns claims that 'In three years of delivering to Rover, we've never failed to deliver on time'. The trouble with dedicated plant in a batch production factory is that machine utilisation is inescapably low: around 30% of the equipment is idle at any one time. Nevertheless productivity and yield both benefit from the fact that set-ups are almost permanently in place. One of the team leaders, Debbi Clapham, suggests that machine changes are now far less of a problem than material changes: she is worrying about how to re-configure her cell in order to cope.

A lot of machinery has been crammed into the available space. Within each cell the machines are tightly knitted together, which has helped to drive down throughput times. Inventory is now turned over 30 times a year, compared to six times in the first 12 months of operation. The judges were also impressed by the pace of work at Premier, among the highest of any factory visited. The combination of dedicated machines and dedicated personnel has produced, Burns believes, 'The highest sales-per-square-foot in the industry'.

Remarkably, Premier began as an experiment. The aim was to test Unipart's strategy for dealing with the gradual Japanisation of the UK motor industry. Could the company manufacture efficiently enough to prosper as a supplier to the incoming Japanese? Should it remain in manufacturing at all? It was Burns's remit to find out. He was given Coventry Components, a 15-acre site then devoted to engine and gearbox reconditioning but gradually decaying into dereliction, and told to keep a small part of it going to produce exhausts for new Rover and Honda models. If the venture succeeded, Premier would be expanded and become a role model for the rest of the group. Otherwise it faced closure, and all 15 acres would be put up for sale. In the event, although turnover climbed from £6 million to £36 million in three years, the growth was entirely confined within the 50,000 sq.ft A block. The planned expansion into B and C blocks has been abandoned.

Burns's starting point was a visit to Japan. These days Premier has a co-operative agreement with a major Japanese producer, and the Japanese influence on the factory is obvious. But Burns insists that it is no DIY Japanese transplant. Many of its manufacturing practices have been evolved by the managers and workers themselves. If everyone wears a uniform it's not simply because the Japanese do. Employees were asked to nominate the businesses they most associated with excellence, and they recognised the wearing of uniforms as a common characteristic of Marks and Spencer, McDonald's and other market leaders.

The factory is single status. Everyone is salaried, with the same start times, same sick pay, same holidays. Recruitment policy is characteristically simple, favouring attitude rather than engineering skills. 'We deliberately went for green labour,' says Burns. (Although Coventry Components recognised unions, Premier promptly de-recognised them - a move since copied throughout Unipart.) The average age of employees is 25. Labour turnover is virtually non-existent: 'one person this year and one last'. But perhaps the most revealing statistic is one not commonly calculated. Premier has a customer base that is one of the most demanding in Britain. Yet of its 200 employees, only four have a formal quality role.

Activity: Manufacturer of automotive exhaust systems

Task: Just-in-time supply to vehicle assemblers

Complexity: Average

Size: 200 employees

Outstanding Features: Cell manufacturing, people management, output per square foot, pace of work.

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