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VTL Group, Going global

Manufacturing in Action, Source : The Manufacturer
Zone : Operations and maintenance
Published : October 2007

Bruno Jouan, managing director of VTL Group, talked to Jayne Flannery about the company’s growth as a global player, which allows it to supply automotive OEMs across three continents

Dynamic is a description that does scant justice to VTL Group. From existing as a single company spun off from Valeo in 2001, the Group has grown both organically and through acquisition into a diversified organisation, supplying a portfolio of products that includes synchroniser rings and selector forks for manual transmissions, and precision machined parts for turbochargers and industrial applications. The customer base is major automotive OEMs such as Cummins, Toyota, Renault-Nissan, Getrag-Ford and Magna Powertrain.

The acquisition last year of Taylor and Whiteley, a precision engineering company with outstanding precision machining capabilities, marked a major breakthrough. With the original market for synchroniser rings stable, but mature, the acquisition has enabled VTL to acquire high level expertise in the related turbocharger market, where there is significant potential for future growth.

“We spent much of last year integrating the company, which we have now rebranded as TWL, into the Group,” explained Bruno Jouan, managing director. “We have also split it into two divisions – TWL Precision and TWL Engineering. The first division concentrates on medium to large volume repeat business, whilst the engineering side of the business has a totally different set of drivers, with an emphasis on prototype development and small to medium sized batch work using the latest technology in three and five axis machining.”

In 2006, the VTL Group invested more than £1.8 million across its various businesses to support new product launches and to increase efficiencies. Another £1.5 million was spent in the first part of this year. “We are obsessed with continuous improvement and cost reduction. A constant focus within the business is reducing the non-value added operations,” he stated. For VTL, this means automation and the ongoing application of lean methodologies.

He cites the example of VTL’s three horizontal forges. “Until the beginning of the year, our three presses needed an operator in constant attendance. Now we have introduced electronic devices and detectors that enable those horizontal forges to run unattended. The process is now so robust that we do not need a person there at all unless there is a specific trigger.” Another project has automated inspection process using laser technology. So far, approximately 25 per cent of the former labour content of the production process has been saved.

Small, but incremental improvements to take out non-value added operations have enabled VTL to hone its cost base to the absolute minimum - but without sacrificing the service proposition. “We succeed in the marketplace on a combination of quality, service and response time. I believe that if everything was made in India or China tomorrow it would be more cost effective, but you cannot sell on cost alone. Factors that make us competitive include our capacity to react immediately to customer requirements, provide short response times, impeccable quality and delivery record, and our very high level of engineering skill,” he stated.

Another tool implemented as part of their improvement program was WinMan ERP. This has provided a stable platform on which key business decisions can be made speedily, confidently and securely. It has also enabled control of consignment-based stock, achieving a significant reduction in administration costs, and full support for by-product reprocessing of costly raw materials. In addition, WinMan’s support of lean and agile methodologies and proven automotive understanding further sustains VTL’s continuous drive to reduce waste, and to retain a competitive edge in a fiercely competitive marketplace.

Automotive OEMs have led the way in capitalising on the benefits of globalisation. Wherever they are based, they require consistency of service and quality. That is why Jouan is convinced that VTL must become a global engineering business.

In a $3.4 million investment, a wholly owned subsidiary – TWL Precision Inc – will soon start production of components for turbochargers from a 20,000 sq ft state of the art facility in South Carolina. It will start with components for turbochargers, but Jouan believes that its capability in other precision machined components will rapidly draw in new customers, whilst an existing relationship with Cummins will kick-start the venture.

Simultaneous to this development, VTL is also launching a 50/50 joint venture in Dharwad, Karnataka with an Indian partner. “There is abundant availability of qualified labour and a reliable energy supply. Our partner has invaluable local knowledge and strongly recommended this region.”

He believes that the enterprise would have been much more complex to tackle alone, and that an Indian partner has enabled VTL to fast-track the process. When the new plant goes live next year, it will manufacture synchroniser rings, selector forks and machined components for turbochargers ready to supply both local and export markets.

“Someone out there will always be able to make a component cheaper, but the overall package needs to be about a local presence, service and quality. We want to take the risk out of the equation for our customers, and our new facilities overseas will give the benefit of lower cost, but not at the price of our ability to react quickly to customer requirements or provide first class quality and services.”

VTL is already sourcing from low cost countries such as India and Turkey, in addition to European suppliers. The company has deliberately opted for a strategy of maintaining a broad supplier base. However, Jouan again stresses that low cost alone is not enough: “There is no saving at all if your service and quality requirements are not also fully met. We have spent a great deal of effort in designing the criteria for our supplier selection process - do they have the right technology in place, for example - and then in actively managing those relationships. We want long term relationships and we work very hard to ensure that our suppliers understand exactly what we want,” he said.

He believes that VTL is now poised for continued growth over the next few years. Turnover currently stands at £35 million, with plans to reach £50 million by 2009, and £100 million by 2012.

“We are already planning to add other capabilities and complimentary activities to the Group. Growth through acquisition is a major part of our strategy, but we also recognise the need to grow at a reasonable and controlled pace as robust profit and cash flow generation are vital to fund our development,” he stated. Much of the last year has been devoted to integrating and restructuring the Taylor and Whiteley business. Next year, with two new overseas manufacturing facilities fully operational, the sky will be the limit for VTL’s global ambitions.

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