UK: The Rolls-Royce model. (4 of 4)

UK: The Rolls-Royce model. (4 of 4) - Cutting lead times and reducing inventory have been major priorities across all facilities. In the past two years the whole production cycle has been put under the magnifying glass and reorganised using Manufacturing

Last Updated: 31 Aug 2010

Cutting lead times and reducing inventory have been major priorities across all facilities. In the past two years the whole production cycle has been put under the magnifying glass and reorganised using Manufacturing Systems Engineering (MSE). Keir is a passionate enthusiast of MSE, which he describes as "the commonsense approach to setting out a flow of the processes required". He rants about the 1960s and the wholesale importation of management techniques that were nothing but gimmicks dressed up in jargon. Equally ruthless is his attitude towards external consultants, who were summarily dispatched from Rolls-Royce two years ago. "Consultants ask you what the time is and forget to give you your watch back," he declares.

Keir does, however, accept just-in-time (JIT). And MSE, which involves organising the workplace into cells of people working on a project or part of a project (a technique pioneered by Volvo in the '50s and '60s), has produced spectacular results. Instead of organising the shopfloor as a production line, where each process is carried on in isolation to the next by dedicated workers, members of a cell are trained to do each other's jobs. Bottlenecks are reduced and the schedule is driven by demand rather than pushed from the back of the line.

On top of the JIT benefits, the cell concept is also a morale booster. Workers are less likely to get bored because they do a variety of tasks and the cell encourages a team spirit and gives the workers greater responsibilities. So far 50 cells have been introduced across Rolls-Royce's nine sites. Eventually there will be about 200, half of which will be in place by the end of this year.

The process of introducing cells requires a change of philosophy within the workforce that is not always easy to achieve, especially in a traditional engineering company like Rolls, where things have been done in a certain way for decades past. Wandering around Rolls-Royce, there is still plenty of evidence of traditional attitudes. Hierarchies, for one, are strictly maintained; this is not a place where everyone is on first name terms - senior management is addressed in respectful undertones with more than a hint of tugging forelocks. There are three lots of dining rooms at bigger sites for different levels of management and workers; and traditional barriers between "male" jobs and "female" jobs remain intact (with girly calendars or muscle-man pin ups in appropriate areas).

Frank Massey, assembly and test manager for civil engines in Derby, reacts to the word "cell", much like Jim Keir does to jargon and gimmicks. In his plant, engines from the small Tay to the giant RB211-524 G and H are finally assembled and tested before being dispatched to the customer.

The huge, clean, gleaming factory with bright, shiny engines lined up in their various stages of completion has a certain glamour about it. Each engine is tailor-made for a specific customer and the assembly process requires highly skilled workers. Asked if any of the 1,500 job losses will come from here, Massey scoffs. "These are highly sought-after men," he declares with pride.

Cells have not been introduced here. But the flow of work has been changed and the number of shifts increased from two to three. In addition assembly manuals are being improved. These measures have resulted in dramatic time savings. An engine that took 30 to 40 days to build can now be completed in just 19, explains Massey.

Suppliers too have not escaped the Rolls treatment. Procurement has been centralised and divided into five commodity groups. "There used to be too many people making too many contracts with the same suppliers," says Keir. "And whoever shouted loudest got there first." Rolls is also determined to pass some of the risks of currency fluctuations and R and D up the supply chain. It is looking to source more abroad, particularly in dollars, to cover itself when the pound is strong.

Rolls has covered a lot of ground in the past few years. But as Lord Tombs and Robins are all too aware, the competition is not standing still and increasing efficiency is a never ending process. Longer term there are plans for more diversification. In recent years Rolls has reversed its civil/military engines ratio to 60/40 in favour of civil and Lord Tombs expects civil to rise to 70%. As for the group as a whole, the acquisition of Northern Engineering Industries in 1988 increased non-aerospace interests to about 35% of total, a split which Robins wants to see at 50/50. On how this is to be achieved, however, he will only say that "acquisitions are neither ruled in nor ruled out".

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