S for single supplier

The big cat is roaring again. With the introduction of the new S-Type, Jaguar sales are set to soar to hitherto undreamt of levels as it attacks the medium-sized luxury car market for the first time since the 1970s. Underpinning this revitalisation are some of the most efficient production systems in the industry. Jaguar has […]

The big cat is roaring again. With the introduction of the new S-Type, Jaguar sales are set to soar to hitherto undreamt of levels as it attacks the medium-sized luxury car market for the first time since the 1970s.

Underpinning this revitalisation are some of the most efficient production systems in the industry. Jaguar has been a pioneer within the Ford empire in introducing lean manufacturing and for developing strong relationships with suppliers.

The latest example of this is a groundbreaking three-year deal with Haden MacLellan Holdings for HMH to supply all the fasteners nuts, bolts, screws, plastic trim chips and so on on the S-Type. The contract is to provide a complete fastener inventory and supply chain management service direct to the point of assembly, and is thought to be the first of its type for an automotive manufacturer.

The Jaguar contract, worth £7m a year for the next three years, was placed with HMH subsidiary GKS Automotive. GKS’s responsibilities include sourcing all the fasteners not all are made within the HMH group and keeping 1,200 bins on the Jaguar production line topped up 24 hours a day. GKS won the contract in competition with about 10 other companies after two years’ assessment.

As part of the contract, GKS spent £2.25m building a 35,000sq ft distribution centre next to Jaguar’s Castle Bromwich site. Jaguar had just completed a £500m overhaul of the site, fitting it with the assembly line to build the new S-Type.

Jaguar is using a production system in which the assemblers should be able to put their hands on everything they need without leaving their point of work, explains GKS managing director Alan McKendrick. Bins are set up at each location containing trays of the fasteners needed. ‘Jaguar has no fastener stock of its own, other than those in the bins.’

Each bin is filled with bags of fasteners. No bag is more than 10kg in weight, and every one has a bar code, a batch number and a part number. Each bag of fasteners is scanned as it leaves GKS’s distribution centre and again when it arrives on site, the second time by a GKS worker at the Jaguar factory.

GKS employees regularly check how full the trays are in each bin. If any fastener supply is running low, they log which fastener it is by scanning its tray bar code, and download this information to the GKS site. A picking order is then printed in the GKS warehouse and the correct fasteners are loaded onto delivery vehicles for the eight-minute journey between the two factories. Once the replacement fasteners have been scanned in at Jaguar, an invoice is automatically raised. The entire process takes less than three hours.

‘Jaguar doesn’t have to worry about fastener supplies,’ says Mike Thompson, executive director of HMH. ‘They can literally forget about it.’

The S-Type assembly line runs 24 hours a day, so GKS must provide a round-the-clock service. All its staff have radios and mobile phones. GKS has two tractor/trailer delivery trains in constant use, with a third tractor as back-up. In an emergency, a normal van can get fasteners to the factory in three minutes.

Knowing the location of the storage bins is crucial to the smooth supply of fasteners. GKS delivery staff have maps of the Jaguar factory with the location of each of the 1,200 bins shown. If a bin is moved, a form has to be filled in and the information radioed back to the GKS facility. Maps are then updated.

There are about 385 different fasteners in an S-Type, although the exact number can vary from model to model. ‘The powertrain area is the most difficult to service,’ says McKendrick. ‘We’ve got to fill those bins up four or five times a day. About 70 or 80 fasteners are used here and many are critical fasteners, such as chassis bolts.’

GKS buys some fasteners from manufacturers within the HMH group. Others come from 74 Ford/Jaguar quality-approved suppliers worldwide 50% are in the US.

‘The product comes in all states of packaging but from a QS9000 supplier,’ explains McKendrick. ‘It’s booked in, quarantined, tested and put through screen packaging machines. There are zero defects in the product we supply. In one year, we expect to supply around 128 million fasteners.’

In one respect the system is not so lean. Though Jaguar has no stock of fasteners of its own beyond the production line bins, GKS keeps six weeks’ worth of stock in its warehouse. So effectively the supplier is holding stock on behalf of the manufacturer, rather than removing it from the system entirely. But as it takes four weeks for a shipment of fasteners to arrive from the US, GKS must keep enough in case the wrong parts are sent.

The company aims to bring in more UK and European firms to replace its US suppliers. ‘Fasteners are bulk, low-cost products which means transporting them is relatively expensive compared to the unit cost,’ says McKendrick.

In the long term, GKS is working to cut the number of different fasteners in the S-Type by commonising dimensions and finishes. The number used should go down by about 40 to 50, bringing further efficiency gains.