Heavyweight lifting

Posted on 18 Oct 2011 by The Manufacturer

Northumberland-based Miller has carved out a niche for itself over the past three decades. As well as producing buckets for diggers and loaders, it specialises in producing couplers and special attachments for the digger’s hydraulic arms. George Archer finds out how the company is doing after the recession.

While Miller manufactures the kind of bucket you see on the front of your average JCB digger, its main focus is the dealer networks of large, multinational OEMs such as Volvo, Komatsu and Hitachi.

While it’s relatively uneconomical to export heavy buckets overseas, attachments and coupler devices are less bulky and thus easier and cheaper to transport. Miller not only produces parts for OEMs and their dealers, but it also provides a service to them. As well as supplying Miller products to its customers, the company installs services and repairs them. In fact, this is what the company began doing 33 years ago.

The company is relatively young – it was established by Keith Miller in 1978 who is still the group chairman today.

After originally setting the company up as a mobile welding and repair service for quarries, mines and open cast coal sites, Keith moved to a rented allotment, and then after a couple of years he and his brother Gary bought their own factory on Tower Street, on Newcastle’s Quayside. It was there that Miller as it is known today was born.

In 2004 Miller entered a joint venture agreement with a foundry in Northern China, and the company Miller JV was formed. While in the UK Miller tends to fabricate larger products from boughtin steel, in China the foundry is able to cast manufacture a large number and a range of different sized products.

Casting gives Miller repeatability and allows the company to make lighter, tougher and stronger products.

Bouncing back

Miller had a particularly harsh recession, just like many other British manufacturers. Specialising in the production of special attachments for backhoe loading excavators and wheeled loaders is a somewhat dangerous trade when construction projects become scarce. The firm has bounced back over the past year or so, and told The Manufacturer that as well as announcing a turnover level twice as high as 2009, Miller is beginning to successfully explore new markets all over the world.

“The recession hit us hard, and the published accounts results demonstrate that,” says Lisa Croft, marketing supervisor at Miller. “However, we have seen a good increase in our sales line in 2011, and the profitability performance of the business is improving, and we forecast this to continue to improve.”

Workforce losses

When The Manufacturer last spoke to Miller in 2004, the company was actively looking to expand its workforce of 200. During the recession management was forced to cut the workforce, bringing the number back down to 120 from over 400 in 2008.

“At the height of the recession we lost approximately 70% of our workforce through redundancies which was extremely difficult,” says Ms Croft.

“Fortunately, we survived the worst of it and have begun to strengthen our workforce to cope with the new manufacturing demands,” she adds.

After one of the worst recessions the company has ever faced, it is starting to strengthen its workforce in order to cope with increasing demand for its services.

Getting the best out of the supply chain

Miller makes sure to invest time on continuous improvement, but rather than implement measures, Croft says that the company has “ensured that there is no alternative” to a standardised, efficient supply chain. Getting the most out of the company’s suppliers is vital, according to Croft.

For example, rather than receiving long lengths of bar that the production team then has to cut up, the company has insisted to its supplier that the bars be delivered already cut up. This standardisation has allowed Miller to make a huge saving by reducing time spent on preparing the bars by 53% – saving money in the process.

Looking to the future

When asked about any concrete plans to invest in new machinery at the factory in Cramlington, Croft makes it clear that although Miller hasn’t been able to invest much in this area over the past two years because of difficult economic conditions, as it continues to grow and expand into new international markets investment will most certainly be on the cards.

Croft says that “Miller is a manufacturer that is keen on ensuring that it keeps up to date with the latest manufacturing technology,” – arguably essential for the company if it is to retain its status as a niche supplier of couplers and attachments for construction equipment.

Croft moves on to talk about the company’s newest piece of innovation: a new range of Twin Locking quick coupler products. Miller has spent the last two years developing and designing the new range and branding this product as the ‘PowerLatch’, and as Croft says, the aim of the new range is to focus on improving safety standards on construction sites globally.

“Now that we are 100% happy with the final designs, we have just started to cast some of the more popular high volume ranges in our Joint Venture Cast manufacturing site in China,” says Croft.

“This means that we can free up some time in the UK to focus on fabricating the full bucket range including the very popular Scoop and bespoke coupler products, large scale mining products and our original repair service,” she explains.

Adam Harrop, on the marketing team at Miller explained the basic manufacturing process behind the PowerLatch coupler: “The major line of products the company supplies are made from the base of a cast frame. A mixture of cast, finely machined parts and hydraulic components are then assembled and fitted to within the main machined frame with every coupler being tested for trouble free operation. The products are then painted and packed including all the fitting instructions and required certifications ready for delivery to the customer.”

Arguing that Miller occupies a niche that no other company has similar expertise in, Harrop says: “The PowerLatch is by far the best designed, safest and most effective coupler in the market place at present, and has been independently tested as such. We are proud that it represents another technology leap from Miller.”

At present, Miller’s PowerLatch coupler is being manufactured in both their operation in China and the UK, but Harrop makes it clear that as part of the company’s continuing efforts to get the best value for money, other locations are being explored as options for future production to serve the relevant markets.

Miller UK's headquarters at Cramlington, Northumberland
Miller UK's headquarters at Cramlington, Northumberland

Keeping it green

The approach taken to keeping a sustainable factory in operation is surprisingly far-reaching at the two sites in Cramlington. As well as the standard energy saving measures such as ‘smart lighting’ and pressure sensor taps in washrooms, the company has modified its warehouse to increase the abundance of natural lighting inside – reducing the need for artificial lighting.

Harrop says that a number of initiatives are in place to reduce the amount of electricity used. Employees turn off the machinery, equipment and lights on the factory floor during breaks and after shifts, timers are placed on central heating. Most important though are the methods Miller uses to get the best prices for their energy. “We use best cost brokers and compare suppliers in order to get the best prices for our electricity. We record how much energy we use so that we can determine the best rates that we can get for our electricity,” says Harrop.

“We also plan to introduce LED lighting – these bulbs are expensive but use drastically less energy and last for around ten times longer than your average energy-saving bulb,” he adds.

The price of raw materials is becoming more and more of a headache for firms in the UK, because we import nearly all of it from abroad. Countries such as China continue to buy massive amounts of copper ore – often stockpiling it and raising the price as a result.

“The issue of raw material price movements has been a real problem over the last four years with massive volatility in cost, both up and down. As you can imagine our biggest exposure is steel but in most of our agreements with the OEM’s we have a raw material price index factor which allows us to adjust price accordingly,” explains Harrop.

“However, in reality raw materials are just one part of the jigsaw and market demand and price appetite has the biggest impact. Miller is constantly investigating and investing in taking every element of waste out of its process to ensure costs are kept to an absolute minimum. We are always looking for ways to invest in new cutting edge machinery, more efficient design through better material utilisation or products that are easier to build with ever increasing standardisation.”