In for the long haul

Posted on 4 Jan 2010 by The Manufacturer

Schmitz Cargobull (UK) is a subsidiary company of the German-owned Schmitz Cargobull Group, the leading manufacturer and supplier of semi-trailers in Europe. TM discusses with Tom Macallan, Managing Director (UK), about the impact of the recession on production and the future aspirations of the UK division of the company.

The Group has manufacturing plants in Germany, Spain, Lithuania and Great Britain.

The UK factory is situated in County Durham, and a range of refrigerated (reefer), dry freight and curtainsided semi-trailers are developed and produced there.

In 2008 and 2009, approximately 17% of all the curtainsider trailers sold in the UK and Ireland were Schmitz Cargobull products. In the refrigerated trailer sector, where Schmitz Cargobull has always been strong, the company had a market share in the region of 40% during the same period Although trading conditions remain difficult and the economic outlook is uncertain, Macallan expects the company to continue to grow its share of the UK reefer and curtainsider market.

The company has set its sights on achieving a 40% share of the UK curtainsider trailer business by 2013 while at the same time consolidating its position as the UK and Ireland’s leading supplier of reefers.

“We believe that we will achieve our sales targets by producing a comprehensive range of trailers with the lowest running costs, manufactured in an ultra-efficient production facility and backed up by the most complete service and after sales support operation offered by any trailer manufacturer,” says Macallan.

The recession and the resulting reduction in demand for new trailers presented Schmitz Cargobull with the opportunity to redesign its UK manufacturing plant without any adverse impact on order delivery times. As a result, a multi-product trailer production line – which allows both curtainsider and refrigerated trailers to be built simultaneously – was built and became fully operational at the County Durham factory in Spring of 2009.

Before the changes to the production facility, Schmitz Cargobull had operated two separate factories at the County Durham site – each producing a single product range: refrigerated trailers and curtainsiders. The new production line enables six different trailer ranges to be built on a single world class line and is achieving higher throughputs than had previously been possible using individual refrigeration and curtainsider sites. In fact, output capacity at the factory has effectively been doubled.

Not only has the new line enabled Schmitz Cargobull to dramatically expand the range and type of trailers that it builds in the UK for the UK and Irish markets, but the vehicles are now being produced more time and cost efficiently than ever before.

For example, TAKT time – the rate at which the production line moves and, therefore, the time it takes for a finished trailer to be built – is down from 75 to 55 minutes.

By the end of 2009 this figure is expected to have fallen further to 44 minutes. This means that the total capacity of the new factory will be 9,400 units per annum.

Reduced energy costs and cuts in other overheads have enabled overall production savings of around 30% to be achieved.

The efficiencies mean that Schmitz Cargobull has been able to maintain its trailer pricing levels despite the significant increases in raw materials costs, which, coupled with the impact of Sterling’s performance in the global currency exchange markets, have seen the list price of other European manufacturers’ products rise in recent months.

The changes to the factory also allow Schmitz Cargobull to build products in the UK for markets where, historically, it has not been strong.

In all six different trailer products are currently being manufactured in the UK. As well as the three curtainsider models, refrigerated vehicle and dry freight model, for which Schmitz Cargobull is best known in the UK and Ireland, the company now makes rigid box units.

”It is far more viable to produce trailers on a shared assembly line rather than on their own dedicated facility,” explains Paul Avery, Schmitz Cargobull (UK) Ltd’s General Manager – Operations. “Refrigerated trailers are now built by the same workers in almost the same time as it takes to build a curtainsider which means we have been able to reduce the labour required while maintaining – if not, in fact, improving – build quality.

“The multi-product line also means that if there is a problem with component supply, we simply switch to building another model – so there is no downtime.” In terms of the production process, the company follows the Schmitz Cargobull Production System (SPS) which was developed in accordance with the Toyota Production System and with assistance from Toyota consultants. “We follow this common SPS and each of the factories within the group is measured on their SPS performance and are effectively audited and put in to a league table.” While Schmitz Cargobull operates a Kanban system in the UK, the implementation of the multi-production line means that the system has to be flexible. “We operate what we call a ‘breathing Kanban system’ which enables us to make model by model adjustments,” explains Paul Avery.

The change in working processes has been embraced by staff at the factory, as Paul Avery explains: “The staff are enjoying the variety that the chance to work on different types of trailers brings. The shortened TAKT times are, to a large degree, down to the way our workers have reacted to the new processes. In fact, all improvement activities are very much a company-wide effort.” Paul Avery continues: “Our business is very focused on optimal performance and current productivity figures for the new line are exceeding all expectations. We recently reached and have maintained figures in excess of 110 per cent.” Such is the design and layout of the production line that when trading conditions improve and output volume at the plant grows, the efficiencies will increase.

“Volume drives production efficiency. The higher the volumes, the more efficient we will become,” concludes Paul Avery.

The overwhelming majority of products built at Schmitz Cargobull’s Harelaw plant are produced using Schmitz Cargobull’s pioneering and patented bolted and galvanised production technique.

Essentially, the bolted and galvanised system removes the need for any welding and, therefore, results in consistently high product quality and greater production flexibility. The galvanising process – all parts of the chassis are galvanised before the build process takes place – ensures that there is no corrosion within the joint when two parts of the trailer are brought together. Schmitz Cargobull offers a 10 year anti-corrosion warranty on the Galvanised chassis as standard.

Tom Macallan expects the trailer business to continue to be tough in the short to medium term. “However, “he says, “as a result of the changes we have been able to introduce at our factory, we are ideally placed to capitalise when market conditions recover.”