Lifting productivity

Jungheinrich, German owner of UK fork-lift truck maker Boss, recently `did a BMW’, by complaining about the productivity gap between its UK and European sites. But the UK subsidiary is well on the way to closing the gap, reports Brian Davis

Shock waves reverberated through fork-lift truck maker Boss recently when Hans-Peter Schmohl, chairman of German parent company Jungheinrich, threatened to cut investment or pull out of the Leighton Buzzard factory unless UK productivity matched its plants in continental Europe. The timing was odd because Boss was midway through a productivity programme, which its UK management says is showing results.

Chief executive Gerald Winter, who joined Boss in 1996, says the comments `didn’t help’, but adds: `Mr Schmohl recognised improvements had been made, and shares our management team’s confidence that we will catch up with the productivity targets set by the German factory by the end of the year.’

Jungheinrich bought the former Lancer Boss company from receivership five years ago, and has heavily reorganised it. Compared to Jungheinrich, Europe’s second-largest truck maker, Boss was a small-volume, traditionally run outfit producing only 2,000 customised heavy trucks and smaller diesel or gas-powered counter-balanced lift trucks a year. Heavy customised trucks are still produced but Jungheinrich’s priority is for Boss to produce up to 7,000-10,000 1.6-5 tonne standardised trucks a year.

More than £10m was invested from 1995 to 1997 and a new factory was built around the existing plant. Winter says: `The old Lancer Boss truck was not competitive. So we renovated the range and we’re introducing the new C range 4-5 tonne truck this spring. Today no product is more than two years old.’

Production has grown from 2,000 to just over 5,000. But in 1998, recognising that the relationship between workforce and management needed improving, consultants from Bourton Group were asked to supervise a programme to boost production among the 300 workers in the high-volume manufacturing plant.

David Higham, head of logistics, says: `We were faced with a significant problem, getting the components here in the right quality, at the right time and the right cost. Everything is a question of achieving better quality, delivery and cost. It was a steep learning curve for everybody, including the 1,600 suppliers – which have been cut to below 300.’

Winter favoured benchmarking the company against the automotive industry, with a team-based style aiming for continuous improvement. `This required a complete culture change. The old company had had a very authoritarian approach to management. We thought people would love to be empowered but found they were scared of taking responsibility. So the process has taken far longer than expected and has meant training everybody.’

Higham says: `In the past there was a lot of rework, which has to be avoided at all costs.’ So time was spent evaluating suppliers and setting new standards for quality, design, IT, and suppliers’ attitudes to continuous improvement. `Some suppliers didn’t make it, while others responded well. We applied the same rules to internal suppliers.’ A shopfloor bonus scheme was set up.

Bourton consultant Martin Green leads a three-strong team to improve productivity. `Our aim is to ensure that a truck comes off the line every 45 minutes,’ he says. `The company had just-in-time delivery and Kanban systems, but there was no prioritisation or structure, and the processes weren’t robust enough for high-volume production. Boss is now far leaner and more flexible.’

New software is being introduced and training programmes are under way. An old manufacturing resource planning system is being replaced with an SAP enterprise resource planning system, due on stream this summer. Twenty Computervision CAD seats were introduced in 1996, with links to sister companies, to replace archaic drawing boards.

The trucks have been redesigned for leaner and faster production, better repeatability and robustness. As in the automotive industry, there is a move towards common platforms and a modular approach to component supply.

However, Winter admits dissatisfaction with Boss performance last year: `We reached only 50% of the productivity in continental European plants last year. In recent months we have been running at 75% and have a clear goal to achieve 100% by the end of the year. We have given people the right tools, the right training and the right management.’ The unions signed a flexibility agreement for working hours last week.

Winter believes the UK plant will not be much affected by downturns in the UK economy, because 85% of Boss’s output is sold in mainland Europe.