Explic8 Consultants Aid Company to Avoid Factory Closure and Achieve Record £45.0m Profits

The Ask:

A major coach and bus manufacturer was considering closing one of its manufacturing facilities in the UK due to several factors: loss making site, quality poor, and market contracted by over 20%. Pressure was being applied by the company’s joint investors who perceived that there were inefficiencies and over capacity across all of the operational sites in Europe and this site was earmarked for closure.

Challenges:

  • “Died in the wool” unionised employee base that had historically benefitted from powerful union control and dominance was the first hurdle to overcome
  • The layout was sprawled over a 600k ft2 site comprising several buildings resulting in part built vehicles having to be pushed or towed between buildings and open to the elements
  • Each vehicle was taking up to 20-weeks to build and every one was a loss maker as they were costed on a previous ability to produce 1200 per annum (but designs had changed)
  • Set up to produce both coaches and buses, the site was failing to achieve satisfactory output of either – both in terms of quality and cost with customers becoming frustrated
  • Radical changes were required if this site was to have any chance of justifying staying open

Implication

  • Re-defining how this factory would operate in the future that would persuade the board of shareholders to stave off the threat of closure
  • Buy-in from the workforce that significant changes had to happen and their commitment to different ways of working was critical to survival
  • Major overhaul to the methods and support systems to allow the factory to become a low-cost, high quality producer within the group

Objective

  • Stop the closure
  • Understand the opportunities that could be achieved and capabilities of this site
  • Produce a blueprint for the future that could be taken to the board for consideration
  • Overcome the history of labour relations issues and work with the employees to build a factory for the future
  • Design, trial and build the new facilities
  • Re-launch the site from a new footing, working hand-in-hand with sales and marketing

The Approach:

Reviewed the operations and critiqued against the competition. Reviewed product portfolio and agreed what was needed to differentiate this site from the others and make it “unique”. Defined how the facility could be made into “virtual” flowlines. Defined and designed what was needed to make this happen. Involved the entire workforce to enable this to work – the changes would result in significant losses in manpower. Worked with all the employees to implement the changes.

Toolkit

  1. Business Process Re-engineering
  2. Complete factory redesign
  3. Education, Training and Buy-In from employees
  4. Flowline and Kanban concepts with balanced operations
  5. Change of focus to “Do not pass on defects”
  6. Order tracking process from launch to delivery

Results and Benefits

  • Business redefined into luxury coach assembly and re-engineered
  • Restructured the entire operation within 6-months end-to-end
  • All operations under one roof instead of sprawled across many buildings
  • Intensive “selling” and education programme with all employees
  • Shop-floor involvement in all improvement ideas with multi-function teams
  • Build cycle reduced from 20-weeks to 5-weeks with single piece flow operation
  • 25-stage build down from 90 with lineside Kanbans reducing stock and WIP
  • Operating in ⅓ of the space, with ⅓ of the workforce and Quality RFT focus
  • Moved from loss-making, due to close, to £45M profit in first 12-months