The turnround of Leyland Trucks

As a way to make a living in this country, manufacturing is decidedly tough – especially after the events of September 11. But it can be done, as a new text book tracing the troubles and transformation of Leyland Trucks explains.

The company went from a music hall joke to the most efficient manufacturer of its type in less than a decade. It did so by adopting a business philosophy that it calls Team Enterprise.

Author John J Oliver, a former chief executive of Leyland Trucks and founder of Team Enterprise Solutions, says the principles are not exclusive to truck-making or heavy engineering.

They have successfully been applied at a bakery, a furniture maker, a college of further education and numerous other organisations.

Team Enterprise moves beyond the Japanese-inspired lean manufacturing techniques to extract the maximum contribution from everyone in the business, from the factory floor to the board room. Oliver apologises for the management-speak cliche, but says the philosophy is best defined as ’empowered people working towards mutually beneficial objectives’.

Operating costs reduction

The changes began in 1989 – and became a matter of life and death when the UK truck market collapsed the following year. Within two years, Team Enterprise produced cost savings of £10m a year through a 24% reduction in operating costs. Within 30 months, break-even halved and warranty costs fell by 35%.

Oliver’s book devotes chapters to the various disciplines of an organisation, drawing on his experiences at Leyland and overlaying them with broad applications for a wider audience. As such, it is a book to dip into for ideas and inspiration rather than to be read in the evening with a single malt to hand.

Professor Garel Rhys, director of the Centre for Automotive Industry Research at Cardiff Business School, notes in a foreword: ‘This book is a manual for those wishing to attain the level of performance that gives them a real chance of surviving the rising tide of competition.Its authority comes from the fact that it describes a success story.’

Indeed, what happened at Leyland Trucks is one of the least appreciated stories of the motor industry in the UK in recent years.

Efficiency honour

The efficiency of the Lancashire plant was recognised last year when it collected the best engineering factory category in the Management Today/Cranfield School of Management UK Factory of the Year Awards.

The book is a micro-account of how Leyland Trucks achieved the honour. However, the macro history of Leyland – not addressed in the book – is less impressive. At the end of the 1960s, state-owned Leyland employed 14,000 people in factories across England and Scotland to manufacture more than 200,000 trucks and buses a year.

Products, quality and efficiency may have been suspect, but it was one of the giants of the international industry.

Today, the company employs a thousand people at Leyland to make just over 13,000 trucks this year. Buses and the famous Leyland name plate have gone. So has product engineering.

These days Leyland makes Dafs and Fodens for their mutual parent company Paccar, the US-owned heavy truck maker. What remains is a single factory producing – very efficiently – someone else’s products.