What do you imagine when you hear UK government rhetoric about support for growth in advanced and high value manufacturing? Probably not a facility which produces 100 million coat hangers a year at 12p a unit. Yet Jane Gray finds that Mainetti is indeed the epitome of a competitive, value add business.
It may surprise you to learn that the UK market for garment hangers, the kind you will find in every clothing shop and every individual’s wardrobe in the developed world, is worth around £110 million and that UK-based manufacturer Mainetti is the largest company in the market.
The company manufactures around 100m hangers for domestic and international customers every year from its highly automated factory in the Scottish borders. It also recycles around 250 million hangers per annum at a site in Chester. Recycled product is largely exported for use in a closed loop recycling operation and ultimately recovered in the UK where damaged or out of spec hangers are destroyed. Raw materials are salvaged and remanufactured into new products. Completely closed loop economics – a hot topic today with the likes of the Ellen Macarthur Foundation, the Design Council, Royal Society of Arts and other research and professional engineering bodies – is old hat to Mainetti.
Integral to understanding how Mainetti creates wealth and employment in the UK while churning out a low cost product is to challenge common perceptions of ‘value add’ says Jim Hutchison, managing director.
“People tend not to think about it, but a hanger is a design tool, a piece of materials handling equipment and a marketing device,” he says. “Some garments are made while they are on the hanger in order to optimise the way a garment is displayed to the consumer. The hanger is then used to move the goods around the globe and branded hangers are a constant reminder to consumers of where they bought something.” In short, they are a subtle but essential way for retailers to add value to their operations and customer experience.
“There is a lot more complexity, collaboration and innovation behind hangers than most think and we undertake everything from design, manufacture, recycling and reclamation for hangers used in international markets here in the UK,” sums up Mr Hutchison.
Mainetti UK at a glance:
- Established: 1974
- Locations: 2 sites in UK
- Employees: 500 (UK)
- Product: Garment hangers for clothing retail customers
- Key markets: UK for primary product, Western Europe, Asia and Indian Subcontinent for recycled product
- Turnover: £24.3m
- UK Growth target: £30m in 2 years
A game of pennies
That said, margins in hanger production are low at the best of times – which today it certainly is not for UK retailers.
To remain competitive, Hutchison admits Mainetti must play “a game of pennies” collaborating with customers to find ways to reduce cost and seeking greater efficiency and flow throughout the closed loop product lifecycle.
Mainetti’s relationship with customers is good. In the UK they range from top end retailers through the mid-market to the supermarket and value sector. They are all fiercely competitive on the high street, but willing to work with Mainetti on initiatives which reduce shared production costs and environmental footprint, such as standardising the use of black hangers on all but a few selected premium brands.
When it comes to its own efficiency, Mainetti’s lean journey is at the core of its ability to maintain a competitive offering from a UK location. “At the volumes we are dealing with, finding a way to shave a penny off production costs makes a big difference,” says Hutchison. And lean principles have enabled employees to find savings in a number of areas.
“People tend not to think about it, but a hanger is a design tool, a piece of materials handling equipment and a marketing device” – Jim Hutchison, Managing Director
Mainetti’s lean journey started around five years ago and has progressed through the implementation of 5S, reconfiguration of the shop floor into cell oriented manufacturing, reduction and efficiency measures in labour, and workforce training in six sigma techniques. Today this growing lean capability is focussed on review of production processes and overseen by newly appointed manufacturing director Graham Wilson, who joined Mainetti as an apprentice.
Summing up the challenge that he and colleagues have come to understand as lean knowledge and culture has developed, Mr Wilson says, “It is all about getting the right product in the right place at the right time, with no inventory, but while maintaining volume.”
It’s an agility challenge which can be complicated by sudden demand for out of season products – as experienced in the interminable winter this year – and by changes in customer supply strategy. Hutchison explains, “This ‘spring’ we had massive demand for knitwear and jacket hangers. At the same time, we also had to produce t-shirt hangers for the summer products retailers ship in from China. Once they’re on the water it’s no use saying ‘it’s too cold for anyone to want them’.” A point that some UK retailers have realised, “We are seeing a number of customers moving production of garments nearer. George at Asda, for instance, is using more UK garment producers and Tesco has a “Made In Britain” range.
Wilson picks up the tale. “It’s a positive trend. But it means we have to become even more flexible in manufacturing because retailers are able to respond much quicker to variations in consumer demand.”
Having the right people in the company, who understand this challenge and where the most relevant efficiencies should be sought is the only way to keep up with the demand for continuous improvement insists Wilson. “The huge majority of savings have come from the staff on the shop floor. They are at the heart of the company.”
Key lean achievements/savings:
- Saving in labour cost through cell manufacturing
- Saving in machine cost by reconfiguring equipment
- Saving in raw material cost by using recycled materials
Wilson says that workforce confidence in applying lean tools and techniques has reached an important milestone recently, with teams becoming self managing.
But of course the reliability of such a self managing structure relies on more than just lean expertise. Luckily, Mainetti has a strong legacy of investing in technical capability too. The company has a wealth of automation and robotic equipment which is regularly upgraded and requires skilled maintenance – Hutchison says Mainetti spends around £500,000 a year on maintenance capex, keeping its kit in top performing condition.
In addition to this, and to ensure the investment is optimised, there is a training budget of around £200,000 for continuous professional development, apprentice programmes and graduate training.
A focus for skills investment today is in expanding apprenticeship provision. Always the dominant form of recruitment and development for electrical engineering requirements apprenticeships are now in development for areas such as tooling, fabrication and process engineering.
All apprenticeship training, which takes place over four years, include education in lean manufacturing principles – the core structure which Mainetti’s confidence and global competitiveness hangs on.