Beyond the glass ceiling

Posted on 16 Nov 2009 by The Manufacturer

Lancashire-based Ultraframe are market leaders in the design and manufacture of conservatory roofing systems, with over one million roofs installed on conservatories throughout the UK to date. A culture of lean operations has been central to the company’s success, says CEO Mike Price.

Ultraframe design and manufacture conservatory systems.

Historically, it has focused primarily on the roofing element of the conservatory, and, as such, is recognised as the company that firstly designed and developed the conservatory roofing system. However, the company is currently diversifying into other related products, using its core competencies to expand the business.

As part of its lean journey, and by improving space utilisation, the company has consolidated back to fewer manufacturing, warehousing, and distribution centres over the last few years and is based in Clitheroe with approximately 250 employees.

Says Ultraframe CEO, Mike Price: “I joined in 2005 as part of a restructure within the UK board – at that time the business was part of a plc with a turnover of £73m and made £5m profit. This had reduced from a peak turnover of £90m in 2003, with a profit of ₤28m. Before the business was floated it became successful very quickly, and was essentially a monopoly as there was no real competition.” With the emergence of competition from 2003 the business started to decline, resulting in changes at board level. The new boards plan was to stabilise the sales and to implement lean to become more profitable. Ultraframe managed to stabilise turnover in 2006/7 — at around £55m — and improved profitability relative to sales by successful lean implementation. Since 2008 the company started to see the effect of the credit crunch reduce the size of the market, as consumers think twice about a “big ticket spend”. Despite its turnover reducing, however, Ultraframe retain a larger share of the market now than it did have in 2006.

Shingo Prize
“We started our lean journey when I arrived in 2005,” says Price. “My background was that I’ve led other award winning companies in the past, e.g. MD at PAC International which won the Best Electronics Factory in 1998 and was head of the Manufacturing Advisory Service in the North West — delivered by The Manufacturing Institute — when it was formed in 2002. I originally came to Ultraframe on a consultancy basis in order to identify a suitable strategy for operational improvement. I was then invited to join the business and lead the implementation of the changes. From 2005-2007 we implemented what we have called the vision programme which is a serious of projects to implement lean, across the whole enterprise.

In 2007, Price decided to put Ultraframe in for the Best Factory Award for benchmarking purposes. The company won the Best Engineering Plant award, which was the first recognition in terms of best practice in manufacturing excellence.

More importantly, it gave Ultraframe good benchmarking feedback and identifying some areas where it could further improve.

Towards the end of 2008 Price were approached and asked whether Ultraframe would be interested in participating in the Shingo Prize, which for Price was: “Another good opportunity to have some even better benchmarking. We’d made some further improvements and we wanted to see where we were at – the Shingo Prize was a good vehicle for that purpose. We entered the process which is quite robust – firstly we entered a 150 page report documenting our lean journey.

The report achieved a level sufficient to warrant an audit, so then a team of UK and USA manufacturers and academics visited us for two days to look for evidence of what we’d said in the report and dig deeper. Following the audit, they scored us against the model criteria and we were delighted to achieve a bronze medallion.”

Says Price: “The first thing in terms of Ultraframe and lean is that we didn’t have a choice. We could not continue to operate in the ways we had previously because the landscape had changed.

When I joined in 2005 the business was in difficulty, and we had to take a “top down” approach to implement lean and generate savings for the business in order to retain a reasonable margin.” “We had a structure that was quite hericarchial, and there were communication issues between the board and the shop floor. Guys on the shop floor initially didn’t really know where the business was at because they were still quite busy and they hadn’t been told the long term implications and the fact that the roofs were having to be sold for a lower price.” In 2006 the company broke even, but it turned a profit of £3.5m in 2007 from lean improvements and rapidly implementing a series of projects which enabled it to improve the profitability of the business. In 2005, Ultraframe created a vision for where the business could get to operationally, with “spaghetti diagrams” showing the product routes through the premises. The first steps in the lean journey were thus to reorganise the factory and relocate the various manufacturing process steps to achieve better flow of products. By the end of 2006 the company took a more enterprise wide view and implemented value streams and value stream managers with “end to end” ownership and also started to look at the whole business and not just manufacturing.

“We launched the vision programme which was 12 projects which were interrelated and tackled different areas of the business in parallel,” says Price. “The major benefit is the culture change, and now everybody understands where the business is at, good or bad, and we’re all harmonised in our objectives from the boardroom to the shop floor.” “We’re very open now in the way we communicate with the team, and have gained a lot of trust and respect across the organisation, whereas in the early days it was quite confrontational because the employees on the shop floor didn’t perhaps understand the issues we faced. Now we’ve engaged the whole workforce in lean. So far it’s been mostly driven “top down” by necessity, but what we’re trying to do is to build from the bottom up, and have started taking more of a focused approach now on the shop floor level to build up a fuller understanding of the tools, systems, and principles across the board.” The company is doing NVQs in business improvement techniques and lean office training, in addition to the more radical step change projects. Similarly, it implemented a project called “Lean Classic” in 2006. The Classic product is Ultraframe’s most popular roofing systems, and represents the bulk of our volume, selling over 1m in the UK.

Says Price: “The way that it was manufactured prior to 2006 was very traditional, in that we had 22 skilled roof assemblers who would effectively make the roof on their bench, their way.

The components were cut and profiled on CNC machining centres, but were then fed into an “accumulator” where work in progress would queue for about a day, waiting for a roof fabricator to complete the product. There was a very little standardisation because each roof builder had their own way of doing things.” Over a period of 12 months in 2006 Ultraframe implemented a number of manufacturing cells, with operatives now able to move around different cells and work from standard operating procedures that are pc based. The accumulator work in progress has been taken out completely, and the company has squares marked out on the floor close to the point of use where components are “pulled” from the machining centre into the space.

Essentially, therefore, Ultraframe moved from a traditional one person, one roof environment to a world class cellular manufacturing environment.

Product quality
One of the key objectives of the Lean Classic project was to help Ultraframe increase its productivity. Price benchmarked the company’s productivity against other manufacturers, finding that it averaged 3.2 roofs per person per week.

Says Price: “That was only mediocre, with some of the best in class producing five or six. The objective was therefore to get to that point by implementing lean. As a result of doing the project, we very quickly got to in excess of five roofs per person per week, and we believe we are now best in class at six roofs per person per week.” He continues: “We used to have a work in progress that would take one day that we’ve reduced to a matter of hours.

Previously we had an issue with our machining centre quality supply into the manufacturing area, which had a reject level of 14%. When we implemented lean and took away the stock, this forced us to then focus on improving the machining centres and supply into the cells – we reduced rejects very quickly down to 6%, and now it’s down to virtually zero defects.” In terms of capacity, this increased on a single shift from 49 roofs to 65, which in turn has enabled Ultraframe to improve on time delivery performance. On Time In Full delivery to its customers in now in excess of 98%. Every roof the company makes is bespoke to order because each conservatory is designed for a specific application. Ultraframe draws the roof on its CAD system, and the product will be manufactured and delivered to the customer typically within 3-5 days.

Says Price: “The reason why we’ve had a warehouse in Bedford is because it’s full of PVC stock as a result of overproduction by our suppliers – one of the deadly “seven wastes. What we’ve done is encourage our suppliers to implement shorter batch runs and to reduce order quantities to be more in line with customer requirements. We’ve now made enough progress to remove one of our warehouses from our supply chain. Having said that, there’s still lots more opportunity for further improvement!” The company has always been aware of its traditional core competencies in engineering design, which the success of the business has been built on. However, it is only been very recently that Ultraframe has been recognised as having a core competency in operations. The company is 26 years old, and has been borne from innovation and, says Price: “We’re looking to retain that going forward, so we’ve continuously invested in innovation and the development of our products.” “Next month we’re releasing a new product range which is the next step in the evolution of the roof and its going to be far better than anything else in the market place. It has a number of features which are unique to Ultraframe and will address some of the potential environmental issues associated with having a glass box on your house, which could result in being too hot in the summer, or too cold in the winter. So we’ve overcome those issues by engineering the roof to incorporate a range of shading products into the design, so the roof for the first time is designed to provide shading or to provide heat gain from the sun, as appropriate, to suit the environmental conditions. We have the IPR on the design.” As a business, Ultraframe has core skills which can be used in other applications, but is diversifying into other areas with related products and alternative materials. The company’s current products have an aluminum structure with PVC cladding, which still has a place in the market. However, given that there are other products which customers require Ultraframe is diversifying into alternative material types and composites for both roofs and windows and doors.

Says Price: “We’ll shortly be manufacturing some of those products here in Clitheroe. We are the UK market leader, but the market has clearly reduced in size, so we have developed a three year plan that will get us back to £50m turnover in the next 3 years by introducing new products and markets.

“We’ve recruited an export director, and he is currently fine tuning his plan for growing our export sales. We have been exporting for a number of years, but it has been a little ad hoc in the past. We currently sell to 12 countries in the world, but we’ve never really taken a structured approach to the way we do it – it’s about understanding what product requirements we need for certain markets, and designing in those special needs for those markets. Our highest export sales at the moment are to France and we’ve recently produced some new developments which will further enhance our French product base.”