Thriving in some of the toughest industries around, the finalists in the 2002 MT Awards for Manufacturing are a symbol of hope in a troubled sector. Their strategy? Manufacturing excellence ...
To read the headlines - lagging productivity, disappearing jobs, ballooning trade deficit - you'd think that British manufacturing was out for the count. But there's a more cheerful way of looking at the sector's undoubted problems. If the performance of the finalists in the 2002 MT Awards for Manufacturing, run as always with Cranfield School of Management and strongly supported by the DTI, were replicated throughout the country, there would be no manufacturing productivity gap; the UK trade deficit would be pretty much wiped out; and GDP would be boosted by an estimated pounds 60 billion - by coincidence just the amount that the chancellor earlier this year committed to the improvement of British public services.
This is not far-fetched - at least conceptually. Our shortlisted plants may be a self-selected group, but none of them is a special case with resources that other companies don't have or can't engineer access to. None attributes its achievements to a fancy strategy, trendy industry segment, greenfield site, non-unionised workforce or unique automation. Apart from Natures Way Foods at Runcton, a new plant set up at customer behest, every one of this year's finalists was once no better than average. At least one seemed to be bound for the knacker's yard.
Instead, they thrive in some of the toughest industries around, ranging from perishable foods to household goods to automotives to electronics.
Almost all earn part of their living in unforgiving export markets. Two export electronic equipment to China, others compete with huge American concerns - and win - on the latters' home ground. Not one complained to the judges about the exchange rate or government policies or difficult customers. In fact, in many cases they deliberately sought out the 'difficult' customers knowing that they could and would help them to improve.
So what's their secret? Simple. They accept that their destiny is in their own hands and that they stand or fall by their ability to make excellent products as well as, if not better than, their competitors. Their strategy is manufacturing excellence, full stop.
'Simple' is not at all the same as 'easy', of course. This year's overall winner (and 1999's), Schefenacker Vision Systems, has been dedicated to the improvement game for a decade or more. Success is cumulative; it takes five years or more to embed necessary improvements to the point where they become a way of life.
Although that's hard work, there is no mystery about the means of getting there. Housekeeping and improvement tools such as 5S, TPM and kaizen have proved their worth in plants all over the world, and the MT winners show that, used systematically, they work just as well in the UK - maybe even better precisely because the improvement potential is so great. In its different way, each firm has discovered the magic of continuous improvement: just as waste is a vicious circle, so reversing it can become self-reinforcing. By looking at the plant as a whole and focusing on smoothing the flow of work through it, these factories have purged time, effort and inventory from the system. They find they can build to order rather than for stock, using customer demand to pull work through without stopping to attract expense, error or delay. As the summary (far left) shows, the results speak for themselves.
Kick-starting the improvement cycle usually brings instant results. But most interesting and powerful, as we've hinted, are the system-wide effects that appear as firms travel down the improvement route. …