Outsourcing has become a thing of the past at CAB Automotive which, since the recession, has brought in-house many of its previously outsourced jobs. Tim Brown finds out from the management team how the increase in product diversity has brought new business as well as new challenges.
It is no secret that manufacturing as a whole underwent some very difficult times over the course of 2008 and 2009. But while a full range of sectors felt the brunt of the economic downturn, none felt it harder than the automotive industry. In fact car makers were one of the first to feel the pinch, not only from a speedy dip in sales, but also from the impact the economic crisis had on their often onerously long supply chains.
While some manufacturers shed work, a number of OEM car manufacturers went as far as to cease production altogether over the 2008 Christmas period. In early 2009, CAB Automotive found itself on the receiving end of recessionary whiplash and, with work only crawling along, the company made a fortuitous and surprisingly opportune decision about its future direction.
“I don’t think we realised the significance of what we were doing at the time. But we made a conscious effort to in-source work that we were currently buying-in,” says managing director John Faulkner. “We started off with whatever equipment we could find, hit the commercial auction sites and started to look for equipment that would support what other people were making for us. There wasn’t a strategy about what came first, it was more about what I could find.”
While the company began to increase its production capacity, the CAB team knew all too well that working with automotive clients requires the most stringent and exacting standards. As Mr Faulkner quite rightly points out: “You can never go to a customer and say: ‘I’m going to start doing fabrication work next year, do you want to give me an order?’ They will want to see what you’re capable of.”
As a result, CAB concentrated first on the work contracts already being in progress. After completing accreditation requirements with existing customers it was able to remove much of its outsourcing expenditure and bring many of its processes under one roof. The company has also continued its accreditation process and last year achieved the Jaguar Land Rover quality accreditation JLRQ as well as ISO14001 and TS 16949.
Defending the position with a new arsenal
A state-of-the-art paint plant was the most recent large capital equipment investment made by CAB Automotive. The company paid a fraction of the price for the equipment because the previous owner had gone into administration. However, the equipment needed to be moved quickly and the company’s own technicians were tasked with the job of relocating the automated painting and drying machinery over the course of a single weekend.
Fundamentally CAB Automotive was established as a seat-maker for the Land Rover Defender, which was essentially an assembly job. Now close to 90% of that seat is made on-site. The company boasts a weld shop, foam shop, paint shop, material cutting shop, sewing shop and an assembly line. Offering fully sequenced supply, for the Defender seats the company receives about two and a half hours notice for requirement for a seat to arrive which includes delivery time of about 45 minutes.
After commencing work with its existing supplier base, potential new clients were then able to be brought into the factory and be shown the new variety of capability as well as the high quality output. The strategy turned out to be extremely successful and the company emerged from the recession, not with a reduced capacity hangover, but instead a whole lot of new products to sell.
“We exhibited at the Automotive Interiors Expo in Stuttgart which was a turning point for us and we came away with 33 solid enquiries from German OEMs,” says Falkner. “Of course all those German companies have plants in this country and it is the head office that is responsible for buying. We didn’t know at the time just how powerful that was going to be. Now we have a very healthy number of quotes out to tender and if only a portion of those are successful we will continue to fuel solid growth.”
Last year CAB turned over of £19m. By March this year it had already secured a substantial improvement on that sum. “We’re now trying to diversify our customer base and product offering as much as possible and are feeling more and more confident,” says Faulkner. “We’re on a growth path but the risk is the size of the growth and making sure that it’s sustainable from a funding point of view.”
Onwards and upwards
The CAB Automotive site is actually a former Lear site which was taken over by a company called RDS Automotive. CAB Automotive was formed in 2005 when RDS faltered following the collapse of MG Rover.
It wasn’t long into the company’s life when the Land Rover Defender underwent an interior facelift and CAB won a design and manufacturing contract for work to go into the 2007 Defender. Off the back of that original contract win, the company now counts itself as either a first or second tier supplier to some of the biggest names in automotive including: Jaguar Land Rover, Aston Martin; Toyota; Fisker; and Honda.
A core reason for CAB’s growth achievements has been the company’s commitment to improvement. This work has brought attention to detail in operations and facilities. “We’ve made some pretty remarkable progress in the past couple of years,” says Faulkner. “We make no excuses but the inside of our facility actually looks a little bit like the OEMs and that is what they expect to see; they expect the processes and the visuals to be an extension of their own factories. And that is what we have given them.”
But while factory aesthetics are considered both conducive to productive work and a good selling point to existing and potential clients, product quality improvements do remain at the heart of all upgrade ambitions.
“You can’t build anything unless you are producing parts that of a guaranteed quality,” says Faulkner. “In the OEMs factories, cars will be taken into an audit bay and a guy will climb all over it and score the car on every little defect that he can find. That score then requires a response from either the supplier or internally. The score is then categorised against who is responsible for the defect. In the early period of CAB Automotive, we were scoring around 40 points per car for the seating alone. We have now reduced that down to half a point per car even though we now provide more components.”
Faulkner says such achievements have been managed through the hard work of each and every operative and staff member over the last five years. Quality is now the company’s number one priority in everything it does, he claims.
Beyond product to process
Building on its desire for improved quality and capability, this year CAB Automotive is undertaking its largest ever lean training exercise. For the best part of the next seven months, a total of 42 people from within the company will undertake the lean training at their recently remodelled lean training facility.
Full-time representatives from an external training company (Lead) will be based at the facility and each day six different people will be taken out of the team and given some off the job training. Throughout the course, the participants will be encouraged to come up with a project/s that they can use as a tool for implementing some of the lean tools and techniques which they will have learned.
“I see that as a really big step in the right direction,” says CAB Automotive general manager Barry Cole. “It is a big commitment to put 42 people through this level of training, which will equate to 11 full days off the job per person. The people chosen to undertake the first round are most of the management team, the staff team, the first layer of the shop floor team in terms of the process leaders and lead techs, and some operators.”
Cole says the company is aiming to train those people it considers will affect the most change in a short space of time. However, he also explains that the company has longer term plans to continue the next round of training at shop floor level.
Fresh faces and ideas
CAB Auto’s move towards diversification also allowed fresh employment into the business, particularly into areas where the company had no previous skills or experience. By following its tried and tested method of using agency workers and providing them with a potential route to fulltime employment, the company was able to search out potential employees with exactly the right skills sets and essentially undertake trial periods. Over time, the method has not only produced some outstanding fulltime candidates but often, when dealing with a new piece of equipment, existing staff were able to learn valuable skills from temporary workers.
“Nearly 100% of our fully employed staff have come through the agency route,” says manufacturing manager Steve O’Neill. “We’ve tended to find that it is the best way of recruiting because it gives us the opportunity to get the right people on the right job. Then if they are able sustain that job, we tend to look at those people to employ.”
In addition, CAB has also recently rolled out a new apprenticeship programme and has taken on three apprentices who will undertake a three-year lean-focussed engineering apprenticeship at a local college. “The apprentices are in their first year and we will see them right through their apprenticeship,” says HR and EHS manager Glenda Thomas. “This will be followed by their degree level and hopefully then they will choose a route to becoming a project engineer, quality engineer or whatever matches their strengths and interests. We’ve been through the hard times of trying to find good people but this is going to help make sure we’ve got the skills we need in place for the future.”
And it is the future that CAB Automotive are already planning for. Witnessing the automotive sector strive towards a more sustainable future, the members of the CAB Automotive team have undertaken important research and development work. Making a strong contribution to a changing industry.
The company is busy looking for natural, light weight and economical alternatives for materials it is currently using to make its parts and is already well on the way to replacing some components. While some materials are already in testing, the battle is far from won. Not only does CAB need to ensure its potential supply chain in natural materials is reliable, it must also convince the OEM manufacturers of the validity of its new materials. Judging by the quality of some of prototype products, it shouldn’t take too long for CAB Automotive to start turning some heads.
Diversity definitely on show
A visit to CAB Automotive reveals a company that has developed its own working strategy for future-proofing the business. Walking around the varied shop floor areas at the company’s site, it is clear that the members of the CAB team not only wish to demonstrate a wide range of skills but showcase that these skills have been absorbed into the companies rapidly growing core competencies. Investment in the company has definitely paid dividends and has been reflected in a workplace that focuses on cleanliness, order and technological sophistication.