Can the public sector learn from manufacturing and why are so many people looking at this sector for inspiration? Read more: How the public sector has been inspired by Manufacturing
Ailsa Kaye Director of Onsite Insights presented at Farnborough on the topic of ‘What Makes a World Class Organisation’. After surveying our Hosts they identified 10 key characteristics common to World Class companies. See Ailsa’s presentation
On 17 September 2014 Pfizer’s packaging and supply site based in Havant, Hampshire were pleased to host the Rt Hon David Willetts MP and senior managers from other UK organisations to share how they have become specialists in the packaging and supply of temperature sensitive medicines within the Pfizer group. The visit was part of the Onsite Insights visit programme which exists to encourage the sharing of innovation and best practice between companies. Onsite Insights, whose head office is based in nearby Hayling Island organises one day visits to the best companies across the UK.
Ailsa Kaye, who founded Onsite Insights 10 years ago said she “was delighted to welcome David Willetts to this visit at Pfizer, who have been a host on the programme for over five years. It is such a great example of UK manufacturing success and a site transformation story. As we are a local company it is even more significant for us as we are also within Mr Willetts constituency.”
Pfizer Havant packages and supplies life changing medicines to over 120 destinations across the globe and is home to one of the fastest packing lines in the pharmaceutical industry, the site covers 17 acres of land, employs 270 staff and processes in excess of 60 million doses a year. An impressive achievement resulting from a long-term commitment to continuous improvement, and developing a customer focused culture which is agile and responsive.
During the visit attendees had a guided tour of the business with Pfizer providing detailed presentations on their approach to strategy, operational excellence, cold chain distribution and supply chain management.
“Pfizer are clearly an inspirational company, they have created a vision that all employees could buy in to, relate to, and remember,” comments Ailsa Kaye. “We are grateful that such a leading company is willing to share its ideas and inspire others.” Visitors were unanimous in their praise for the site.
Onsite Insights was founded to encourage the sharing of innovation and best practice between UK companies. In the last ten years over 10,000 people have attended visits across the UK. Host companies include both large multi-nationals such as Mars, Toyota, BAE Systems, Jaguar Land Rover, Milliken, Fujifilm and Mitsubishi Electric as well as award-winning SME’s such as Double H Nurseries and Silent Gliss. These companies have one thing in common – a commitment to continuous improvement and a belief that sharing best practice helps themselves and others improve.
Ailsa Kaye, the MD of the national best practice programme Onsite Insights looks at why organisations should look to manufacturers for inspiration.
“The lessons in cost saving and waste reduction taken from Toyota and Ford are now entrenched within organisations of every size and type across the UK. Lean is now a by-word and common phrase used for continuous improvement. So what else can we learn from Manufacturing?
Manufacturers in the UK and globally have faced what is commonly referred to as a burning platform – change or close. International competition and supply chain pressure has meant that unless you can produce your product more cost effectively and to a higher standard than your competitors you may as well shut up shop.
We all need a burning platform – whilst we have great intentions, without this we will fail or at the very least stand still. There are few exceptions to this rule. Take IBM or Vodafone, once recognised as the leaders in their sector, they grew, had little competition and then were hit by changing trends and far superior products.
There are a number of reasons why any organisation (either in the public or private sector) that is committed to growth should look at manufacturers for inspiration. They have identified exceptional problem solving tools that can be applied to any situation. They really do understand what in their process/activity adds value for their customer and what doesn’t. They have exceptional training and communication skills and they are in the most part innovative.
Look at Jaguar Land Rover for instance. The site at Halewood is an incredible example of a business transformation. Faced with closure it looked to implement lean and transform the company culture. It took five years, but the site is now a centre of excellence for the Tata group, with highly engaged and motivated employees.
Another inspiring manufacturer is Mars Drinks, they have openly shared their lean journey with organisations from across the UK for over ten years, as part of the DTI funded Inside UK Enterprise programme and subsequently the Onsite Insights visit programme. They enjoy sharing their experience and regularly visit other companies as they recognise that by sharing they themselves improve through the identification of new opportunities and new ways of working.
But it is not just the large multinationals that offer inspiration, some of the smaller manufacturers offer great examples of how to improve and grow. Double H Nurseries, based in Lymington is a manufacturer with a difference – they grow houseplants for the major supermarkets – M&S, Sainsbury and Tesco. They took lessons from the large automotive companies and applied lean principals into their operation. As a result they have developed highly efficient systems and processes which have reduced cost and waste, allowing them to compete with similar organisations in Europe and worldwide.
Manufacturers have to innovate to survive. New technology, systems and processes affect how they manufacture. 3D printing is revolutionising the industry and manufacturers are already utilising this incredible technology to great effect. BAE Systems at Rochester, for example, have reduced production time of prototype parts from 3 months to three weeks using this technology.
The need to reduce costs should not be seen as a negative, something to bemoan, it should be seen as a positive opportunity to improve. The outcome is a more successful company, one that can withstand competition, maintain its workforce and grow. A side effect of Lean which many CEO’s have seen, is happier workplaces and more satisfied and motivated employees. Every person wants to believe the work they do adds value and individuals do not want to perform tasks that do not add value or are pointless.
So get out and explore the Manufacturing world, find your burning platform, and truly understand what adds value to your customers.
Ailsa Kaye has run the National Best Practice programme Onsite Insights for the last ten years, prior to this she ran the DTI funded Inside UK Enterprise Programme. Onsite Insights has seen over 10,000 visitors in the last ten years and supported thousands of companies both large and small drive improvements within their organisations.
Heavy equipment manufacturing has a specific DNA. It’s made up of equal parts of Okuma, Mazak, Fanuc, Seiki and many more. These are the tools needed for the trade. And in our manufacturing world, the OEM stands as the lone resource ready to rescue the day from downtime. Right? Not quite.
Although the OEMs do a fine job of selling, scheduling service and stocking parts, they sometime seem a bit perplexed when little things go wrong. In other words, when a critical machine goes down, it’s not always a catastrophic failure — it’s sometimes due to an annoying machine nuance, like a simple fault reset sequence or a misaligned tools arm changer.
It’s situations like this that send a maintenance technician to the Internet for help. After searching through equipment-fix blogs, technical forums and advice from guys with a handle like CNCGUY, a half day of production can sometimes be lost. So wouldn’t it be great if someone had the foresight to put all of this equipment knowledge in one place?
Advanced Technology Services, has done just that. Through a new service called TechConnect®, maintenance technicians can connect with machine experts who have access to literally thousands of machine records. And those machine records represent the largest knowledgebase of technical information from the 2,500 maintenance professionals that ATS employs. And they’ve been inputting machine data — including annoying nuances — for over 25 years.
When you do the sums, that’s a lot of records and a lot of years of experience. But what it really means is that when one of those costly machine nuances creates a non-catastrophic downtime event, a tech can simply connect to the database online or on the phone for faster resolution.
One of the keys to the success of the TechConnect® service is the company’s network of subject matter experts. These experts are some of the most knowledgeable technicians in the industry, with literally hundreds of years of combined experience on hundreds of brands and types of factory floor equipment.
Not all the calls coming onto the TechConnect center are extremely technical in nature. Derek Hill, ATS UK Managing Director describes as an example, “a recent call from one of our sites was for an Okuma lathe that was reporting the following alarm: “0865-16 alarm – MCS encoder initialization failed.” The onsite technician was not able to quickly diagnose the issue and placed a call to our TechConnect centre. As this was an Okuma issue, the call was transferred to one of our Okuma experts. During his initial investigation, he learned that a new axis motor had been installed on the machine just prior to the alarm being generated. The expert then asked if the new axis motor included a new encoder. Upon confirming, it was determined that the new motor was shipped without an encoder. The encoder was installed and the problem was solved. This information was all documented and is now a part of our database. Sometimes, all it takes is experience and a fresh set of eyes.”
The company traditionally known for its maintenance service has been providing additional call support to some of the largest companies in the world for many years. Managing the hundreds of incoming requests for support is handled by ATS’s Technical Operation Centres (TOC) globally. TechConnect® providing 24/7 coverage to all its sites. It is fully integrated into these call centres and gives ATS the unique ability not only to link an expert to a problem around the clock with just one call, but also manage, escalate as needed and document each call taken.
Add to this equation the emerging technology of mobile devices such as IPad’s for manufacturing, which ATS have just rolled out to all staff – enables maintenance technicians the ability to review historical information online for each machine on the factory floor. They can also open and close work orders and with the tap of finger. And they can access complete parts inventory information all from the same mobile tablet device.
Another area that this mobile technology is bringing real value to the manufacturing floor is in the ability to connect factory floor technicians directly to the central TechConnect® centre using live audio and video. If a picture is worth a thousand words, a live video connection between the TechConnect® centre and technicians on the factory floor has proven to be worth much more. The TechConnect centre also has the capabilities to connect directly to the machine tool remotely in many cases. The ability for our technicians to connect directly to a machine of the factory floor hundreds of miles away opens up a myriad of possibilities.
The use of mobile technology on the factory floor is still in its infancy. As companies begin to see the value emerging technologies can have on their bottom line and begin to invest more capital in the infrastructure to support them, the sky is the limit.
Hill noted that “as a result of the metrics we are monitoring from our new TechConnect® service we are gaining valuable insight as to what information our technicians need most, on what equipment, when. This information is sent to our technical training department so common issues can be addressed by providing a documented process or, in many cases, a how-to video that can be accessed from our knowledgebase by everyone.
Knowledge and mobility is coming of age on the factory floor. It’s a trend that is saving one half hour per tech per day. And a trend that will no doubt lower the cost of manufacturing in the years to come.
Written by Ailsa Kaye – 9 September 2013
With increases in transport costs, rising wages in China and a more competitive exchange rate, the prognosis is good for the return of manufacturing to the UK, but the question remains whether we have sufficient skilled labour to take advantage of the opportunity.
Despite unemployment levels of around 8% (2.5 million people) in the first half of 2012, apprenticeship places remain unfilled and the level of skilled workers in many manufacturing facilities is still well below that required. There is a particular demand for good quality engineers. Dutton Engineering in Bedfordshire had two apprenticeship positions open for over two years, which they were unable to fill until they pro-actively developed a relationship with a nearby school. Andrew Read the company’s Managing Director, said “We have had to go to extraordinary measures simply to fill these positions, which is remarkable given the current market and scarcity of good, well paid positions.”
Manufacturing production in the UK fell in May 2012 by 1.7% over last year according to the Office of National Statistics, but there are strong indicators that this tide will turn with companies returning to, or expanding production in, the UK. However, the skills shortage could seriously disrupt any potential growth in the sector and growth will only be achieved if companies have the right people in the right jobs.
Maintenance is an area of particular concern. Derek Hill of Advanced Technology Services (“ATS”), a provider of maintenance services to companies such as Caterpillar and Eaton commented, “We have an ageing population, and retiring baby boomers will be leaving en masse over the coming years. Unfortunately many of our younger workers lack the skills for the positions which needs to be rectified, but more importantly we need to work on the perception of manufacturing and in particular engineering and maintenance as a positive and fulfilling career path.”
The ATS approach to addressing the skills shortage for their customers is to create a compelling opportunity for career progression and training. Hill noted that “By transforming perceptions of traditional maintenance roles we are attracting the right people from outside the sector”. In the US and indeed more recently in the UK, ATS have focused on ex-services personnel as they have the mix of competencies, the drive and project management skills which suit the available roles. They have been successful in this approach and with the imminent redundancy of a large number of services personnel in the UK over the coming years, there is potentially a pool of very strong applicants.
The drive to move business back to the UK is not just about labour costs, companies such as BT and Santander have returned their call centres to the UK – because ultimately the customer demanded it. Some claim that the decision to onshore was not because of falling customer standards but because there were now more competitive and cost effective solutions in the UK.
In manufacturing circles, Toyota, the benchmark for world class manufacturing produce their new hybrid engine at the UK plant in Deeside and then ship this back to Japan for installation into the vehicles.
This says production should not only be where it is most cost effective but also where you can guarantee the standard of production or delivery required by your customer.
In 2000, multinationals cut their labour costs by 77% using factories in China instead of the UK. But, as most manufacturers will attest, salaries are only a small factor in the overall cost of production. The increasing cost of raw materials, transportation and the complexity of supply chains are also major considerations.
It has taken harsh lessons in reality to educate companies that when considering offshoring the fully loaded cost, not just the unit cost, has to be identified. Aside from the increasing costs already mentioned there have always been “hidden” costs associated with offshoring that, when considered, paint a slightly different picture.
For instance, it is almost always necessary to engage the services of a local agent to act as an inter-face with the supplier, so there’s an added cost. There are long lead times, and minimum order quantities which necessitate holding more stock, affecting cash flow and increasing the danger of obsolescence of stock. There is the added cost, and inconvenience, of traveling to and from the supplier as is necessary in any customer/supplier relationship. As well as the difficulty in communicating with the supplier due to language and time-zone differences.
As David Kilroy of Insights-Training points out, “I remember one small company in West Sussex which transferred its raw material source to China. They hadn’t fully understood the added costs associated with what appeared to be a very attractive unit cost. Because of long lead times and minimum order quantities they actually had to lease another unit to hold the stock. This, along with tying money up in the stock, not only eroded the unit cost benefits but almost drove them out of business.
He added “Another, larger, company I visited in East Sussex, also had a very painful experience. They received a very large shipment of parts from their offshore supplier. All of which had a quality defect.
The supplier accepted full responsibility and agreed to replace the shipment at no cost. No problem there then, except the supplier said it would take 2-3 months to replace the shipment, leaving the customer with no stock. Transportation costs, distance and other commitments meant they couldn’t, or wouldn’t, commit to drip-feeding the replacement parts, as might be possible with a local supplier, leaving the company unable to fulfil orders for their customers”.
The US has seen a shift to onshoring already with companies such as Caterpillar opting to relocate their new plants in the US. The driving force for this was simply that increased shipping costs, supply chain complexity and inconsistent quality meant that the offshore plants were just not competitive.
There is also the question of protecting products from being copied and the market being flooded with fakes. Anyone who plays golf will tell you how many fake golf clubs (a multi-million pound industry in itself) are out there after many U.S. club manufacturers switched their production to places like China. The double whammy here is some of the copies, having been made to the same specification, are of comparable quality and go unnoticed by the end user, whilst others are of poor quality, damaging the company image and potentially losing future customers. Either way the industry is haemorrhaging millions of pounds. (It’s true but is it relevant?)
Abstract and complex monetary policy tends to hog the spotlight when it comes to ways of boosting employment. Inflation remains muted but it’s difficult to see what more easing can do to really dent unemployment. Some economists rightly argue that focused measures to retool workers in potential growth industries would go much further.
Manufacturing is quite rightly back in the spotlight, but it needs a concerted investment in training, and a ‘make-over’ to ensure that it attracts the right candidates, so that it can once again serve as the catalyst for prosperity. The sector spurs demand for everything from raw materials and intermediate components to software and services of all kinds. Studies and statistics show that manufacturing significantly impacts the widespread creation of jobs-and wealth.
So why is manufacturing facing such a remarkable problem? A confluence of factors is at work. First, there is no doubt that manufacturing has an image problem, especially among younger people. Unfortunately, the old stereotypes of backbreaking labour and grimy working conditions persist. Ask people today what they think of manufacturing, and most will probably describe dirty, dangerous work that requires little thinking or skill and offers minimal opportunity for personal growth or career advancement. This is totally inaccurate.
Today’s manufacturing jobs are “cool” and appealing. Workers are now required to be experts and operate the most sophisticated equipment in the world. They can cut steel with lasers, water jets and plasma cutters and can program robots to paint, package and palletize products. Computer programming and other high-tech skills are needed, which dovetails precisely with what younger people love these days; these jobs can be more fun and ultimately more satisfying than many service-sector jobs.
Reinforcing this mind-set is a general disinterest in the manual arts. Adults now avoid major household repairs, opting to hire a handyman, enlist a relative or contact a property manager. Young people essentially have no role models when it comes to repairing things themselves or taking pride in building something useful. It’s no wonder that so many teens dismiss the idea of a career in manufacturing.
To be fair, the government has made steps to address this with campaigns such as ‘See Inside Manufacturing’ and ‘Make It in Great Britain’ but much more needs to be done to ensure we capitalise on the opportunity presented and ensure the multinationals see the UK as the most viable option in terms of quality, cost and delivery for their manufacturing plants.
Written by Ailsa Kaye, Onsite Insights
Cultural values are often the domain of human resource professionals and large corporations, but Derek Hill of Advanced Technology Services takes a look at his own company’s corporate values and discusses how they have used the values to drive continuous improvement throughout the organisation and provided great value for their growing customer base.
“In today’s environment a company can not survive on just a strong brand, success is built on actions, authenticity and the ability to deliver value for your customer. I strongly believe that we shouldn’t just give lip service to our company values, creating a strong company culture enables an organisation to create a common identity, one which supports and drives growth internally and externally. Customers want to buy more than a brand name, they want to know they are dealing with an ethical and reliable company, and also one that is going to continually strive to improve.
ATS works alongside some of the world’s largest manufacturers so our employees have to adapt to working in a wide range of organisations and environments. As employees are located onsite within customer factories it important for us to have a strong identity and a company culture that employees can relate too. Continuous improvement is top of the agenda in all manufacturing environments, challenging what you do and how you do is part of day to day life – so it was important for us to develop a set of values that focussed on this as an overriding objective.
As an organisation we identified eight values, they are: Live Safety; Delight Customers; Develop People; Enhance Processes; Drive Innovation; Nurture Relationships; Demonstrate Leadership; and Deliver Results.
Values can be interpreted and can change over time, so to ensure our management team were aligned we recently spent some time looking at each value and what they meant to us as individuals and as a company. Take for example Live Safety, this is our most important value, not simply because we work with heavy machinery and in potentially dangerous environments, but because as a business it is the right thing to do. Poor health and safety costs money, but more than that it can cost lives. To us Live Safety means that all employees consider their own and others health and safety as a priority 24/7, which is as much about what you do within working hours as well as outside of it. It is also about accountability and aiming for a zero incidents within the workplace. We focus on identifying potential hazards and have an incentive and recognition scheme in place so people are encouraged to pick up on any potential health and safety issue. We also make sure Safety is at the top of the agenda in every training, performance review and meeting within the business
We also talk about Delighting our Customers, what this means to us is encouraging all employees to exceed our customers expectations on a daily basis, being ready and supportive, and always asking “What else can I do?”. This is a tough challenge as maintenance teams are generally called on when their are problems or failures in production. Keeping a positive outlook and being responsive to changing customer demands is what makes our teams so successful.
Developing People is not only a cultural value it is key to our survival and growth. There is a major shortage of skilled maintenance technicians not just in the UK but internationally. To attract and retain great employees we need to ensure that they are valued, inspired and motivated. To do this we have to ensure every individual is valued, supported and has a training and progression plan that is suitable for them personally.
Challenging all of our employees to continually question what they are doing and look for improvements is how we drive innovation and this encourages us to look for new tools and techniques to improve what we are doing and how we are doing it.
Nurturing relationships is an important cornerstone of our company as our employees are faced with challenges daily and our ability to communicate both internally and with our customers is critical. To encourage this we focus on building trust with others and being empathetic to all the people we work with.
Demonstrating leadership is about being authentic, working in a way that engenders respect and loyalty. It is about every individual working in a way that is best practice. It is about engaging with others and living, breathing and doing what we say we are going to.
Finally but not least our focus on Delivering Results ensures we focus on making a quantifiable difference every day as individuals and as a company. I really do believe that every person that goes to work wants to make a difference and by promoting and celebrating success we encourage everyone to improve.
We have quite strong growth ambitions, but we want to ensure we are always seen as an authentic business, one that people want to work with and for. The focus on values is not a tough choice it is critical to create a common purpose and ensure we all perform ethically, wherever we are working. It also provides a structure within which continuous improvement is achieved.
Cultural values may be clichéd but they are still a formidable tool for companies, particularly those that are growing fast (or want to grow fast) to create an environment in which people want to work, they provide structure and a way to focus growth and drive improvements. “