© Colin Herron & Chris Hicks University of Newcastle upon Tyne The application of lean manufacturing as a repositioning strategy. Colin Herron, One NorthEast Chris Hicks, University of Newcastle upon Tyne Business School

© Colin Herron & Chris Hicks University of Newcastle upon Tyne Air Bag Co. Changed from American to French ownership in The new group manufactured similar products. Cost were high, quality and moral were poor and the company was threatened with closure. The North East Productivity Alliance (NEPA) supported the Company implement lean manufacturing, which together with a change in management resulted in survival with the company becoming an exemplar within the Group.

© Colin Herron & Chris Hicks University of Newcastle upon Tyne North East Productivity Alliance Funded by One NorthEast, the Regional Development Agency for the North East of England. Objective is to disseminate lean manufacturing practices to improve the competitiveness of companies in the region. The methodologies used were developed in conjunction with Nissan and the Industry Forum. Companies were selected using i) Productivity Needs Analysis, which analysed competitive position; ii) Manufacturing Needs Analysis that assessed processes and current problems to identify appropriate tools and metrics that could be used to achieve improvements.

© Colin Herron & Chris Hicks University of Newcastle upon Tyne Technology Transfer The ‘Master Class’ was used as a mechanism for technology transfer. Change agents were identified and received structured training. Staff at all levels (particularly operators) received training leading to NVQ qualifications.

© Colin Herron & Chris Hicks University of Newcastle upon Tyne Selected Lean Tool Phase 1: Workplace management ‘Genba Kanri’ –5Ss: Seiri, Seiton, Seiso, Seiketsu, Shitsuke, –Standard operations –Skill control –Kaizen –Visual Management Phase 2: –Just-in-time –Deming’s plan, do, check, act cycle –Single Minute Exchange of dies –Production led maintenance –Workplace measurement techniques More advanced methods: Failure Modes and Effects Analysis (FMEA); Poke-Yoke; Value Stream Mapping.

© Colin Herron & Chris Hicks University of Newcastle upon Tyne Case Study: Air Bag Co. Before intervention the Company was threatened with closure. Labour turnover was 30%. Efficiency of production line was 70% c.f. 85% target. A young and enthusiastic management team addressing these issues. Productivity Analysis included a workshop for management. The outcome was a 12 month plan, which focused upon 4 Master Classes and the training of the change agents. Each Master Class was of 15 days duration and included: i) setting objectives; diagnosis of problems; 5 days of ‘hands on’ to make improvements. In parallel the workforce were trained to NVQ level 2 and the MD went on a two-week fact finding visit to Japan.

© Colin Herron & Chris Hicks University of Newcastle upon Tyne Outcomes 80% of the workforce received NVQ 2 qualifications. Absenteeism reduced by 17%. Productivity (parts per person) increased by 30.5% Parts no right first time reduced by 21%. Stock turn ration improved by 4%. Internal schedule achievement improved from 80% to 100%.

© Colin Herron & Chris Hicks University of Newcastle upon Tyne Conclusions NEPA has so far involved 43 companies and 74 Master Classes. A new Plant manager with knowledge lean manufacturing, together with a dynamic HR manager put together a small management team that had a clear strategy. This driving force utilised NEPA to support change within their agenda. Air Bag Co. previously threatened with closure dramatically improved its performance and developed ‘best manufacturing practices’. It was considered an exemplar by the Group and technology is now being transferred to plants in Spain and Tunisia.