Driving remanufacture

Posted on 3 Feb 2010 by The Manufacturer

From humble beginnings working on a pneumatic bicycle tyre, Michelin has grown to become the largest tyre manufacturer in the world. Tim Brown talks to head of UK communications, Peter Snelling, and factory manager, Peter Marsh, about the Michelin bus and truck tyre factory in Stoke on Trent.

Primarily servicing the UK domestic market, the Michelin facility in Stoke-on-Trent has garnered its success largely through innovation. This has culminated in a combination of industry leading marketing and sales strategies, the empowerment of employees and an intrinsically environmentally friendly remanufacturing process.

The Stoke factory produces remanufactured truck and bus tyres, which offer the same characteristics and longevity as a new tyre. The process essentially involves taking the original inner structure of a tyre, known as a casing or carcass, and rebuilding the exterior of the tyre. Using this process, the factory produces two different products, Remix and Encore, the difference between the two being the number of times the tyre has been resurrected.

“A new Michelin truck tyre has two lives,” says Marsh.

“The first life uses the existing tread to a pre-defined depth. The tyre is then re-grooved which gives a new life to the original tyre. When the re-grooved sculpture has completed its service, the Michelin carcass can then be rebuilt as a Michelin Remix branded tyre. This adds a further two lives to the original tyre and includes a second re-grooving. The Michelin Remix tyre can then be rebuilt for a second time as a brand called Encore which can give a further life using the new moulded sculpture followed, where possible by a third re-grooving. This gives us the potential for a fifth and sixth life.” Michelin has operated a plant at Stoke-on-Trent since 1927. However, the Remix manufacturing plant only began production in the early 1970’s, while the Encore workshop was not introduced into operation until 2000. The current annual production of Remix tyres is 280,000 per annum, while the factory produces approximately 70,000 Encore brand tyres per year. Due to the reuse of the casing component of the tyre, the benefit to the consumer from a remanufactured tyre is a reduction in cost of approximately one third.

Sourcing and innovative sales

The Stoke factory employs a number of sub-contractors that source tyres from various distributors across the country. This includes Michelin’s sister company, tyre distributor ATS Euromaster.

The casings, from which the tyres are rebuilt, are sourced primarily from used original equipment tyres; in other words, new tyres that have been used once on a truck or a bus. Under the Encore brand, the factory not only remanufactures Michelin’s own tyres, but also those of their competitors. “When we use competitors’ tyre casings we only rebuild them once giving a third and a fourth life,” says Marsh. “However, when we remanufacture a Michelin carcass it is capable of six lives.”

While the company has developed a solid supply chain, it has also incorporated an innovative sales mechanism to ensure continued demand. Using a business model that is becoming increasingly more common amongst remanufacturers, Michelin has undertaken a leasing arrangement with certain customers. Of particular note is the company’s agreement to lease tyres to a number of bus companies, including the red iconic London buses.

Under the scheme, Michelin maintains ownership of the tyres and employs teams to work at bus garages to ensure the buses are maintained with tyres in prime condition. When a tyre has come to the end of its useful life, it is automatically sent to Stoke-on-Trent to be remanufactured.

Rolling out improvement

Approximately six years ago, the Michelin group launched a continuous improvement scheme entitled the ‘Michelin Manufacturing Way’ (MMW).

Introduced uniformly across Michelin’s 68 worldwide manufacturing facilities, the system is based on adopting standardised benchmarked processes.

According to Snelling, the MMW principles ensure plants employ common organisational structures, workshop practices and management processes. “Where results perhaps are effective in one location, then other sites can make sure they are applying the same criteria, the same standards and same procedures to achieve the same results,” says Snelling. To avoid any discrepancies or misinterpretations, Michelin has a central department which ensures that the MMW is applied consistently throughout the group.

Under the umbrella of the MMW is the company’s lean manufacturing system, Managing Daily Performance (MDP). The core of the MDP involves the monitoring of what have been determined as the five primary performance indicators. These are: safety, machine performance, quality, output and cost.

The Results
Marsh says the Stoke-on-Trent plant has undergone extensive improvement since the introduction of MMW, particularly over the last 18 months. “The culture has changed quite considerably in the workshops in terms of people owning the process and contributions to the business. We have seen tremendous changes in the ways that we work.

The involvement of people, their participation and engagement and the focus on the business indicators is now very strong. Each individual operator at Stoke-on-Trent is aware of the various business indicators and of how their own team has performed, how their workshop has performed and how the business is performing.” Not only has there been a culture shift at the Stoke-on-Trent plant, thanks largely to the implementation of MMW, but other areas of improvement have included the environment, ergonomics of posts and safety. “We have, for example, seen some spectacular gains in our waste material reduction,” says Marsh.

“In 2009, we made a waste deficiency improvement of approximately 21% in scrap material and in terms of productivity we have improved about 8%.”

The Stoke-on-Trent plant recycles 100% of process waste.

Material such as rubber crumb is reprocessed into items such as carpet backing, playground surfaces and other general rubber goods. The materials from any scrap tyres that are not able to be remanufactured are also recycled.

Furthering their commitment to the environment, the Stokeon- Trent plant is also aiming to divert all non-process waste away from landfill through recycling, re-use or energy recovery. Recognised for its environmental commitment, all Michelin’s UK sites are certified to the UK standard ISO14001 recycle.

In addition, safety is another area of improvement for the Stoke-on-Trent plant and one of which they are very proud. “On the 28th of November, 2009, we had our third anniversary of zero lost time accidents,” says Marsh. “This is an excellent record in comparison with other equivalent industries in the UK and greater Europe.

Our priority is our people and the safe working practices of our people. We have a notice board as you enter the plant detailing accident frequency in each workshop, and at the moment it is particularly empty which is just the way we want it”.

Putting something back
As part of the company’s corporate social responsibility approach, Michelin UK has also undertaken a functional community assistance programme through its subsidiary, Michelin Development Limited. The scheme assists local small and medium sized businesses to expand and develop by offering low interest loans and expert advice. “We take company time to help small businesses develop and create wealth and jobs for the future,” says Marsh, who helped pioneer the programme.

“It really is about putting something back in to the community that has supported us for the last 80 years, and helping to create jobs and be a part of that community. It is part of what we call our performance and responsibility Michelin approach.” Essentially, Marsh says that the success of the company is not only reflected by its balance sheet, but also by its level of commitment to social responsibility and sustainability.

Michelin Development Limited offer unsecured loans at base rate (currently 0.5%) to small and medium sized businesses (with up to 250 employees) which can demonstrate a viable business plan. “We are unique as far as I’m aware in this offering. It is completely altruistic.

The main principle is to serve the areas from which our employees are drawn. This helps the families and neighbours of our employees. We want to make sure that the areas in which we operate remain vibrant and economically successful. We would rather operate in areas that are doing well than areas that are not.” For more information visit: www.michelindevelopment.co.uk

The road ahead
The current priority for the Stoke-on- Trent facility is to continue to meet the existing UK demand for bus and truck tyres. Marsh says the company’s plans are also flexible enough to incorporate any new products that the market may require.

In addition, the company is aiming to improve productivity by 30% by the end of 2010 compared with 2005.

Satisfied with their progress towards this goal, Marsh says the achievements so far have been largely thanks to the dedication of their workforce, particularly during the recent economic turmoil. “We retained all our skilled labour, but also introduced measures to reduce our costs. The tremendous cooperation from our workforce and their union representatives needs to be commended. If we had not been able to work together we would not have been able to achieve what we have done.

All our employees showed a tremendous level of maturity and understanding during the recession.” Such employee loyalty is clearly reciprocated at the Stoke-on-Trent plant, with Marsh terming “commitment to their workforce” as the company’s current biggest investment. Indeed, he believes that the further strengthening of relationships between the company and its operators will provide the biggest returns. “I think there is still a tremendous untapped resource within our workforce in terms of their participation and involvement and in terms of getting their ideas and answers to problems. Today I am concentrating on furthering the culture change in our operators and their engagement in the business.” Such sentiments are indeed likely to ensure continued success at the Stoke-on-Trent plant; a prime example of why Michelin is widely considered the most successful tyre manufacturer on the planet.