Imitation or innovation – Worcester Bosch Systems

Posted on 6 Jul 2010 by The Manufacturer

Mark Young visits UK based boiler manufacturer Worcester Bosch Group to hear about how its all encompassing Bosch Production System has provided ultimate efficiency against a unique way of working.

What’s the best way to become a world class company with market leading share; a company who is the largest manufacturing employer in its city and didn’t make one single permanent employee from a payroll of 1,400 redundant during the recession? “It’s not just about cost reduction, it more about the people,” says Worcester’s Andrew Bentley.

Andrew Bentley, who holds responsibility for the Bosch Production System (BPS) at Worcester, a Robert Bosch group-wide continuous improvement system. Originally inspired by the Toyota Production System, significantly Toyota Senior Management jointly supported the development of BPS and are still actively supporting its development today, “We (Bosch) are always learning from our friends at Toyota, they offer tremendous support to our ongoing work with BPS,” says Bentley. To drive any lean manufacturing programme without cost reduction as the main driver would seem like suicide to most company directors but Worcester, Bosch Group’s trading figures suggests otherwise.

Instead, says Bentley, “BPS focuses on people and process improvement on a continuous basis, whilst cost is vitally important for everyone in Bosch, it’s not the only driver for BPS, product quality and customer satisfaction (delivery) are key drivers also”.

About Bosch
In fact, this seemingly rare rejection of the mantra that money talks the loudest has been a part of the Bosch group since its inception. Founder Robert Bosch once said: “I have always acted according to the principle that I would rather lose money than trust. The integrity of my promises, the belief in the value of my products and in my word of honour have always had a higher priority to me than a transitory profit.” You can’t buy or trade stocks and shares in Worcester, Bosch Group and that’s the key enabler of its philosophy.

“We don’t have the pressure of trying to please shareholders all the time so we can do what’s best for the business long term. In the short term, that means concentrating on all of the other issues that indirectly affect cost and not cost itself,” explains Bob Murdoch, Worcester’s manufacturing director.

“Obviously there is return on investment to consider before we spend money but we don’t look at things and say ‘if we do X we’ll get Y saving’, that is a little short sighted.” “Importantly it’s also about delivery performance and quality because those are the things that are going to give us differentiation in the market place,” adds manufacturing engineering manger Louis Stephen.

Based in the cathedral city of Worcester, as its name suggests, the company was originally founded in 1962 as Worcester Heat Systems (Worcester Engineering). It was bought out by Bosch in 1992. Worcester Bosch makes on average 1,200 boilers a day which equates to one every 2.4 minutes (Customer Takt) and roughly 300,000 a year. The plant employs 1,400 people, 1,100 of those are based on site at Worcester and there are 300 sales and service staff off-site. There are further 230 people employed at the company’s other UK site in Clay Cross.

It holds the Royal Warrant and supplies products to the Queen.

The Bosch Production System BPS was started in 2002 with a local project on lean transformation. It is based on eight principles: pull systems; process orientation; perfect quality; standardisation; transparency; associate involvement; flexibility and standardisation.

It is very much based around the philosophy that ‘no problem is a problem’.

The system is applied to all of Worcester’s processes from the shop floor, to the call centre and the service operations to the office functions.

In fact, over the last eight years, Worcester, Bosch Group’s entire operation has been completely transformed by BPS. Batch sizes have been reduced dramatically. Always devisable by 12, they are generally around 60, whereas historically they have been anything from 400 upwards.

Previously a changeover just once in a week would not have been rare. “It’s easier to coordinate smaller batch sizes and processes finish at the same time meaning we are all tuned in to each other and we can keep a track of what’s going on daily,” says manufacturing manager, Steve Munn.

“When operations start and finish or deliveries are made to the line it provides a visual signal which everybody can use to assess our progress a lot better than through the intermittent signals given by larger deliveries of parts. Most importantly defects are picked up far quicker too. Previously it could have been days, now it’s immediate.” Delivering parts to the line in smaller batches is also ergonomically more efficient. Associates have everything they need to hand when they need it, reducing secondary handling and eliminating unnecessary bending and reaching. An example of this in action is the press shop which used to put all of the steel parts in stillages the size of a table. Now they go in trolleys which are a quarter of the size. Next they are going to go into boxes which can be delivered to the track side.

Manufacturing at Worcester has moved away from ‘push’ towards ‘pull’ systems, no easy task. One way this has been achieved is through simple visual management systems (lot formation control) with kanban to visually indicate which parts need to be manufactured to sequence, says Bentley, “One of the key principles in BPS is Pull, without doubt the pull systems have generated significant reductions to our inventory, be it WIP (work in process), raw material and finished goods”, however, Bentley continues “Do not think that having Pull Systems are the final phase for the plant, we already operate with one piece flow in all final assembly lines, one piece flow is the vision for all our processes, where practical and offering benefit of course” To error proof, the Japanese principle of Jidoka is employed.

This ensures that every boiler is packaged in the right box accompanied by the right literature and screws. The line physically prevents the item from moving to the next stage until it is satisfied the correct procedures have taken place, whether that be an electronic torque test or a scan of the screw pack that’s been picked out by the operative. If the items don’t match up it won’t be allowed to continue on its journey to the customer until it is perfect.

The company maintains flexibility by reserving the right to call the working hours at a week’s notice.

Employees get paid the same amount whatever they work in a week because the company will ensure an average is maintained over the course of a year. Employees will find themselves scheduled from anywhere between 30 and 48 hours on any given week, again the principle of flexibility not only in the processes but people also. You’d expect this could be a bone of contention but Bob Murdoch says the seasonal nature of demand for boilers means workers are generally happy with their lot.

“It’s like selling ice creams but opposite,” he says. “We need to provide more in the winter so we work longer hours.

This is generally when the gas is burning and the bills are higher. On the other hand, in the summer we work less which coincides nicely with our few annual rays of sunshine” The transparency principle of BPS accounts for every tool & required parts in every workstation. “But it’s not just about a clean plant,” says Steve Munn, “it is about people understanding 5S and why they are doing it (living it) and being able to realise self managed loops”.

For ultimate traceability, every boiler has its testing data recorded and saved for 20 years so if a problem occurs in a boiler’s life the company know exactly where, when and by whom the testing was done.

A constant feed of installers enroll on Worcester product training courses for three day intensive training during which they learn how to correctly install and service the products. “When the boiler isn’t put in properly and it breaks down it’s not the installation engineer that gets the blame, it’s the manufacturer,” says Bob Murdoch. “Therefore it’s prudent for us to make sure products are installed properly.” Installers are the largest contingent among 11,000 visitors to the factory each year.

Since BPS was introduced, staff bonuses aren’t determined by productivity any more, they are based on product quality, this is important to the culture to deliver ‘Zero Defects’ to the customer.

The Lean Line – The Future of Assembly

The biggest manifestation of BPS so far though is the introduction of the ‘lean line’ last October. This is a U-shaped manually driven production cell which replaced one of the five existing lines. Plans are now in place to replace the remaining four straight assembly lines, one-by-one, such has been the initial success of the Lean Line.

The lean line provides incredible flexibility. On the traditional straight assembly lines at least 17 operatives are needed to complete assembly of a boiler. On the lean line, potentially one worker can build the assembly himself from start to finish, though in reality eight workers typically carry out standardised tasks on a Takt time of six minutes before passing the mobile workstation along to the downstream process.

“It is true one piece flow,” says Steve Munn. “The U cell gives complete flexibility in the output without losing productivity. On a normal straight line you could probably run it half manned with jobs doubled up. This you can do with one man – the productivity will be the same. Its true one piece flow – the operator ‘makes one and then moves one, there is zero stock between stations’.

Implementation of the lean line was led by engineering group leader Joao Paulo Almeida, who says, “Personally I see the Lean Line showing all the strengths of BPS, every BPS principle in our daily improvement process is applied to its fullest extent, the lean line project has really given a step change in our thinking, it is something I walk past everyday and can take personal pride from, in fact the whole team do”.

Whereas on the straight production lines the stationary workers are positioned metres apart and can only communicate with those immediately either side, their colleagues on the U-shaped lean line are a closer grouped team, enabling an understanding of each other’s current working progress. By the same token, the lean line team leader has full unimpeded vision of the working area. Testament to this, attired in footwear unequipped with mandatory steel toe caps, your humble narrator was ordered from the lean line immediately upon entering it by a team leader no more than 10 metres away. The same result would have been unlikely to occur so quickly on the straight assembly line.

With the operatives all inside the ‘U’, the line is more compact. This is also afforded by the fact that only small quantities are delivered to it. Each moveable workstation is ergonomically set up for each individual operative and the task he has been allocated.

People based processes
Visual management is all live and all hand written so that everyone can see it, interact with it, and understand it. “We record almost everything with pen and paper on big boards on the shop floor so everybody knows at all timers where were at and what we have to do, to reach target condition,” says Munn. “If we do things on computers it’s hidden and only a handful of people see it, this is not the BPS way of working, we want everyone involved, everyday.” Every member of staff now has an ‘Andon’ board above their assembly line or sub assembly processes. This is a visual control system which indicates whether processes are running to the target condition, how many products have been completed, how many are left within a batch or a shift and the defect rates. It can be used to automatically stop the line and inform a member of support that a deviation has occurred or there is another reason why attention is due in a specific area.

Shop Floor Management is another interesting subject, the BPS approach is about empowering people to manage their own processes. “The issue is to get the owners of a process closer to it so they see deviations on a daily basis,” says Bentley. “It’s all about making the current condition transparent through the recording and displaying of the data visually and in real time so that they’re really triggered into the improvement straight away, we are always trying to achieve the target condition for our processes. This is infinitely better than traditional systems whereby you get weekly or monthly reports that are slower and take longer to communicate effectively to the team.” The company has moved away from a top-down approach when it comes to improvement projects. People have ownership of their own sections and they work on what they identify as important. “We as managers don’t necessarily always know what’s best,” says Louis Stephen. “We try to provide guidance and technical expertise in how to change but when it comes to what to change it’s the guys who live it and breathe it every day who know best.

They might not always understand the full implications of what they’re suggesting but they say what they’ve found and what they want to achieve and we just help them get there. We become mentors, they can make their own decisions on improvement and be fully supported to know they are the right ones.” The company carries out weekly reviews of individual process zones, Steve Munn says “Every Friday at 11am on the shop floor is the place, not in an office, here all of the people in an area including the production leader, area manager and process engineers will make a presentation of their sections performance and make recommendations for improvement”. The directors and senior management team can then encourage what’s going well to continue and see which areas need support.

In addition, line managers carry out regular process confirmations in which they ask an employee a direct question to ascertain whether there’s a better way of doing something. Any suggestions are explored and where feasible are implemented. Recently it came to light through one such confirmation that the wiring loom used in the assembly of the product was making life difficult for operatives and was creating unnecessary waste to deal with and ultimately dispose of. The company contacted the supplier and as a team improved the packaging of the wiring looms to reduce the burden on the operator, all this from one process confirmation.

“Everything in the decision process becomes fact based,” says Munn. “The improvements that are being made are done so based on real information which everyone understands, the confirmations are a daily occurrence, completed by both team leaders (daily) and managers (weekly) across the whole plant.”

Man, not machine
As a dedicated reader of this magazine you’ll have enjoyed Edward Machin’s feature last month in which the case was made for more automation. Here too, Worcester goes against the grain.

“We limit automated processes where possible, unless there are real tangible benefits,” says Stephen. “It’s far better to keep things simple and have robust processes understood by the people. We prefer to put faith in man (and women!) rather than machine.

What a person does with the equipment is support the process. The person needs to feel that they run equipment, the equipment should not run them.” Bentley, who previously worked as a senior engineer in automotive for over 10 years, “Many lean strategies I have observed are based on cost reduction, this is all well and good, until you lose the trust of the people, the quality in the product and finally the customer loyalty, I’ve seen this many times, cost, and cost alone being the key driver, often it is the only driver, without doubt it will cause long term damage to the organisation, often irreversible” says Bentley.

“If you look at people as another cost burden on two legs, you are really missing the point to all of this, that is clear to me and everyone else here” says Bentley, “We can replace equipment (that could perfectly achieve the customer requirements of, quality, cost & delivery) and replace with high technology levels requiring less people, however the impact on both the direct & indirect people in the long term is often negative, I can not operate by those rules” says Murdoch.

As the company generally only moves parts around in small batch size quantities that can be handled by one person with a trolley, forklift related accidents have been reduced to zero as a by-product.

The company even fabricates its own racks for the lines and storage facilities on site and it rivets instead of welds in the name of flexibility.

“High levels of technology might look good to the outside world but what does it deliver to the people & process long term?” asks Andrew Bentley. “Our philosophy is that technology has to support the people, never the other way around, relying on technical innovations alone often provides only a temporary competitive advantage, you see the impact it has to our support functions, it is not always visible.”

Zero per cent to landfill
As the company is focused on developing its range of renewable products, Bob Murdoch says “it just makes sense” for the company to look at its own environmental impact. The company investigated every waste stream involved in all of its processes and found, above and beyond its expectations, that it could in fact send absolutely nothing to landfill.

Its investigations ascertained not only here each material could be recycled – plastics, for example, are notoriously difficult – but also how it can do so with the lowest environmental impact with regards to method of transportation.

“With only a little additional effort and creativity on our part, in investigating the possible destinations for recycling materials, we have managed to make this endeavour not only economically feasible in the roughest of times, but in fact economically beneficial,” says Murdoch. “We can also say that the destination of every material in that boiler has been analysed to ensure that the most environmentally responsible and economically beneficial recycling solution has been found.” If that wasn’t enough, the company now retrieves every spare part and boiler which has been replaced by its engineers and returns them to the plant for recycling.

“We are all proud of the Zero Landfill achievements for this plant, without doubt a huge effort from everyone, most unseen during this interview, helped to achieve this, the green credentials go a long way with our customers, its important to all of us” says Murdoch.

The next challenge will be to continue to take BPS outside of the factory and throughout the companies supplier and customer value streams. “If we’re really going to get the benefits we need to address the entire value stream. It is much broader than what exists in the plant,” says Steve Munn. “That’s what we’re facing up to now. We are working with our suppliers and our distributors to integrate them into the value. We’re spreading the understanding so that we can control our stock levels better, keep quality in check and reduce wastes through things like transport and handling.” Can our component suppliers deliver smaller quantities of stock on a daily basis? This sounds ridiculous, surely costs would increase massively, “We will see, our Logistics team is currently working towards this goal, I have no doubt in my mind it will be successful, Worcester already have many of our local suppliers supporting this initiative, so why not, having the Logistics Teams (and other departments) supporting BPS is a massive boost, they see improvements in the value stream that are often missed, its about developing together” says Bentley.

Says Munn: “We asked a local supplier to work with us to make this happen and they initially came back and quoted us a higher price for supply. We went to their site and did a workshop with them on BPS to demonstrate the benefits and highlighted how it would be beneficial to both parties and that it couldn’t possibly cost more. It was a really nice example of what can be achieved by extending BPS outside the four walls of the factory.” Quantifiable measures do BPS justice. “The quality of our products is ‘best in class’, this comes from having a quality focus in all our processes, “product quality is the result of the people and the process working together, it is not an accident” says Bentley, additionally “We have stretch goals, WIP (work in process) reduction each year >20% and we’ve achieved them and more,” says Munn, lead time for our finished goods reduces year on year, “The lead time is now based on hours for the plant, not days or even weeks” says Stephen, “I know this because I am heavily involved in the Value Stream Mapping activities, we are all involved, everyday”, importantly skills distribution for the associates is a real demonstration of the ‘people focus’, says Murdoch “Back in 2006 the balance of skilled operators (skills matrix measured) to unskilled was 1:66 in favour of unskilled, this is now 1:2 and continues to show how people are the single most important element to what we are trying to achieve here”.

The management team here are committed to what they are doing because they believe in it. The factory is clean and calmly controlled and has an air of success around it. Ice white decor, gleaming floors, the full range of products displayed proudly on the walls and glass fronted fascias presenting each department for all to see gives is a tailored setting for a manufacturing centre fit for the 22nd let alone the 21st century. There are opportunities to see for yourself, says Bentley “Yes we like to show people what we do here, it does make you proud to be involved in this success, however, its not easy, there is a lot of effort that goes into creating what you see, it does not just happen because it’s a nice thing to have, this is important to our customers”