The Manufacturer Magazine : Promoting best practice in Manufacturing

MK Electric, Lean transformation

Manufacturing in Action, Source : The Manufacturer
Zone : World class manufacturing
Published : May 2008

Scott Irwin, site leader of the Southend site of MK Electric, part of the Honeywell Group, talked to Jayne Flannery about creating a robust and sustainable UK manufacturing operation

MK Electric is a global manufacturer and supplier of circuit protection, wiring devices and cable management products.

It has manufacturing processes in various locations, including Malaysia and India, situated to support those local markets. However, the Southend site, in the south east of England, has emerged as one of its flagship operations and testament to the potential of lean principles to transform a domestic manufacturing enterprise.

Back in 2005, the site won three manufacturing excellence awards from the Cranfield School of Management, competing against the likes of Gilette, Ford and Siemens. The success story has continued from there.

When MK Electric became part of the Honeywell Group in 2005, Scott Irwin, site leader of the Southend site, was tasked with taking continuous improvement forward to the next level. The toolbox he was given consisted of the Honeywell Operating System (HOS). Based on the Toyota Production System and founded on the principles of six sigma, HOS aims to accelerate improvements in performance across a range of indicators including safety, quality, delivery, productivity and inventory. The system stresses standardisation of processes as the basis for continuous improvement. Over the year, Honeywell has supplemented the core system with other elements of lean thinking, in particular value stream mapping (VSM).

“Honeywell have provided a very structured system and methodology for lean implementations,” stated Irwin. “We are two years down the road in the process of implementing a standard lean framework and our goal is to achieve full scale deployment by 2009.”

The rationale was simple. “Our market had become extremely competitive with so many of our competitors moving offshore to gain cost benefits. We, on the other hand, believed there was an advantage to remaining in the UK if we could do two things; invest in automation and invest in lean,” he explained.

“Investment in automation has not just been about labour savings, but about achieving total consistency and repeatability in our processes,” he continued. “Implementing lean and stripping out non-added value activities has slashed our lead times, improved our customer service levels and enabled us to save £250,000 on inventory holdings.”

The business has made a multi-million pound investment in automated assembly, which produces millions of products each year. Forty moulding machines all have three and six axis robotic attachments, with the result that just five people per shift are needed to manage the moulding operations.

The site’s operations are highly complex. It produces over 4,000 distinct SKUs. Irwin explained that Logic Plus is a volume range of plastic products dependent upon the thermoset moulding process and automated assembly. This accounts for 92 per cent of the volume of the business, but just a small percentage of SKUs.

Then there is the decorative side of the business, which provides a variety of metal products with different aesthetic finishes. Although accounting for just eight per cent of volume, this range encompasses more than 3,500 distinct products, some designed specifically to meet a single customer’s requirement.

Design is obviously a key factor in simplifying this type of operation. It takes place at a sister facility seven miles away and the emphasis is on common manufacturing platforms. “Firstly, we stress manufacturability and reducing the number of components to obtain leverage with suppliers. However, giving our customers a common base is also important in other ways.

For example, the wiring and installation of our products will follow the same principles irrespective of the exact model, whereas some competing products require a different approach each time,” he said.

At the point of production, the drive towards lean started with benchmarking and value stream mapping. The first value stream mapping exercise centered on a decorative socket which took 112 hours to wind its way through the production process. Led by a Honeywell lean master, the team managed to reduce this process time by 78 per cent.

“Once the basic parameters had been established, then it depended on training employees to the point where they could take over responsibility for identifying and initiating improvements with the management team acting as coaches and facilitators in the process of change,” he explained.

The HOS training approach emphasises visual signals as the best communication medium and work began with health and safety at work, seen as a key area because it shows Honeywell’s commitment to its workforce. “It has now been over one million working hours since our last lost time accident, whereas in 2000 it was only one hundred thousand hours between accidents.

It illustrates the level of improvement that is possible and we have applied the same tools to our lean approach. Many tools and techniques that have improved our safety record are wholly transferable, such as root cause analysis and mistake proofing processes,” he said.

On some product lines, lead times have been reduced from 14 days to just one, and this has lead to a switch from ‘pushing’ to ‘pulling’ production. “There were two choices and it was obvious which one was superior, because there is no second guessing,” he continued.

Implementation of SMED has led to dramatic improvements in reducing changeover times and great strides have also been made in developing one piece flow. The first totally flexible manufacturing cell is now up and running. It brings together four distinct production lines and can handle almost 400 products in 12 different finishes.

“Our challenge now is to work towards further strengthening our flexibility and agility. We see a very big advantage in being able to offer an enormous portfolio of products, but only if we can be equally competitive in every category,” he said.

Irwin believes that the next few years will reveal the true value of the decision to continue manufacturing in the UK. “Businesses which have decided to off-shore are often forced to sit on high inventory levels to act as a buffer to longer lead times. Meanwhile, their production and logistics costs are rising very quickly. We feel that the possession of a UK manufacturing base is an important differentiator given that 80 per cent of our customers are based here.

Over time, this competitive advantage of UK manufacturing for the UK market can only become more apparent.”

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