Michelin Tyre Company, the UK arm of the French tyre brand, began its journey in 1905. Just over 60 years later the company opened its 45 hectare site in Ballymena, Northern Ireland. With over 1,000 staff and a yearly production of around 1.2 million truck and bus tyres, the plant’s newest site director Wilton Crawford is looking to continue the proud Michelin heritage as a company built on innovation. Tim Brown investigates.
Michelin at a glance
Towards the end of the 19th century a cyclist, whose pneumatic tyre needed repair, wheeled his bicycle up to the doors of the rubber factory of Édouard and André Michelin. Due to the tyre being glued to the rim, the brothers spent three hours removing and repairing it.
Unfortunately, their attempt to repair the tyre failed on it first test but the trial and error unveiled a tangible concept and the duo went on to develop a pneumatic tyre which did not need to be glued. The brother’s tenacity for innovation not only revolutionised the tyre industry but today underpins not only the work and business ethic of Michelin but also its newest advertising slogan – ‘The right tyre changes everything’.
As a global entity, Michelin is constantly striving for continued innovation in its processes, products and people. The constant improvements in its products as well as the introduction of its Red and Green travel guides, its roadmaps and the Michelin stars that the Red Guide awards to restaurants are typical of this strategically talented company.
In January last year, the company appointed US born Wilton Crawford to succeed Graham Whitehurst as site director at the Ballymena plant.
With a vast experience at five different Michelin sites, Walton shares with his predecessors the determination for improvement.
As a truck and bus tyre manufacturer, Michelin has about 18 sites around the world with Michelin Ballymena being about fifth largest in terms of output. Situated 30 miles northwest of Belfast, the Michelin Ballymena factory supplies its products to four zones: south-east Asia, South America, Europe and US. Europe is the largest market accounting for 52% of the output while just over a third is exported to the US. However, those areas of concentration may alter in the years to come with South America and South-East Asia having experienced higher levels of growth and economic recovery than their western counterparts.
As far as competition goes, Michelin is the largest tyre manufacturer in the UK with more tyre manufacturing capacity and employees. According to Crawford, that gives the UK Michelin group, as a whole, a real strength in its home market. However, as much of the product produced at the Ballymena site is destined for an international recipient, he says that capability of the site’s equipment to support tyre manufacture for a number of international zones provides a great benefit.
The total turnover for the Ballymena site is about £250m, although Crawford says he expects to gain about 5-6% this year. This, he says, is a reflection of a rebound in the market as well as the expectation of a net growth in the global automotive market. “The global financial crisis was particularly challenging in 2008 and 2009 but we have seen growth in the marketplace since then. We see strong export demand coming from the developing nations for the next couple of years including Asia and South America. This is despite new Michelin factories being built in those regions due to the sheer quantities likely to be required in those areas. We are anticipating upwards of 10% growth in those regions.” Aside from the improving market, Crawford is also planning to continue to improve the Ballymena site by focusing his efforts around the company’s main performance metrics. Also known as The Michelin Manufacturing Way, the metrics include: productivity improvement year-on-year, cost improvement, safety performance, and product and service quality. Indeed, Crawford hopes to make a considerable impact on the Michelin group’s aim of achieving a 6% productivity improvement year over year.
Geared towards productivity
The team at Ballymena have engaged a number of automation improvements over the last few years and Crawford says he expects further improvements in order to satisfy the vision and strategy the company has developed for the site.
However, whilst Crawford admits that it will take a healthy investment to support those goals, he says that the corporate vision is very supportive.
“As a company we are investing in both new sites, particularly in developing markets and also in order to enhance existing sites so as to achieve productivity improvements year over year,” he says. “That is our real challenge to ensure we maintain competitiveness. We are spending around £3.5m per year which encompasses safety improvements we make onsite for our employees and will also include the modernisation of some of the machinery.” Whilst the drive towards investment has been focused on improving productivity, Crawford concedes that many of the innovations in the manufacturing plant have actually been stimulated by innovations in the products. “We are really changing a lot of the product design in terms of getting better performance to the tyres of the future. Some of that does bring changes in equipment in order to make those products which have resulted in quite a few investments in terms of our tyre assembly and our preparation areas.” In addition to the investment in machinery at Ballymena there has been a consistent investment in people. This focus on the development of all staff at the site has clearly impressed Crawford since he took over 15 months ago. “Our people are very well qualified and have a lot of training and a lot experience. A lot of team members on this site have been here for 30 or more years and some have even surpassed 40 years.
That kind of experience, which extends right back to when the factory was first built, is not something that can be easily replaced and makes us really competitive globally in terms of our knowledge base, technical know-how and product knowledge.” With average employee attrition for the site historically hovering at just over two per cent, it isn’t any wonder that the site has no issue with skill retention. The reason for the development of a career employee culture at Michelin Ballymena is the result of many factors, not least of which is the prestige of the company. In addition, the loyalty of the staff is reciprocated and the site has developed a career succession planning program for all monthly paid staff and also helps to develop the more junior members of the team.
“We have the opportunities and the ability for staff to build new competencies and skills,” says Crawford. “Many of our leaders in the factory started their career at the bottom level and have worked their way through and built up their credentials along the way. We are thankful that we don’t have a problem with attrition and we feel that this is in part due to the combination of our values, spirit, engagement and focus on a long term vision.
“The level of training and teaching that we put into our people here and the focus on building that competency in the job function is very strong in the UK. We have a strong history of really investing in the staff to learn the scope and details of their job. Developing a strong responsibility with individual jobs is probably the biggest strength I’ve seen that we can leverage here and which could be used more effectively in some of our other zones. Also our focus on our safety performance is first class and we have achieved an outstanding safety record.”
Quality equals customers
The manufacturing philosophy, Michelin Manufacturing Way, combined with the company’s quality management systems are used at every site around the world. However, according to Crawford, the UK and Europe have a particularly strong history of robust and proven quality performance. In fact, as an exemplar of best practice, Michelin employees from other parts of the world frequently attend the Ballymena site to observe the operation and to assist to spread the site’s highly revered quality procedures.
Due to increases in raw material prices, some Michelin products have increased in price over the last year.
“However,” says Crawford, “our customers are willing to pay for that for the quality, durability, performance and safety which go along with our products for trucks, lorries, coaches and busses.
Brand equity and the image of our products and services is what we sell to our customers. We see that as having been an ongoing strength for decades and will continue to pave the way for our products and new launches. It is really key to our success.” He says that part of that customer loyalty is driven through the close interaction and feedback mechanisms that company has developed with its clients and the transport industry. “We have a lot of direct interaction with our customers and we understand that a truck tyre in Europe might have different requirements than a tyre that might go to India where the road conditions are much different. Terrain, weather and load are all key conditions which play into the design of the tyre. The commercial directors here in the UK as well as in France also work very closely with the industry trade bodies. In addition, our field engineers collect a lot of field data primarily from our fleet customers. This is supplied back into the product design teams in France, US and Asia.
Environment, energy and economics
The cost of energy is a particular concern at the Ballymena site, says Crawford, particularly when compared to other sites in the US. According to him, at other sites where he has worked, energy constitutes approximately eight per cent of the total budget whereas in Ballymena it is closer to 16%. “When I got here it really opened my eyes to the proportion that energy takes within the operational budget. So in effect, the cost of energy is about double compared to our sister factories. That is really putting us at a competitive disadvantage and it is becoming more and more challenging to figure out how we overcome that issue.” On the flipside, he says, and partly because of energy costs, the UK has been very innovative in looking at green sources of energy or renewable energy. “We have a wind turbine project here and we should have the first turbine up and running in the first part of 2012 with the second one following soon after. Those wind turbines will help offset about 50% of our energy demands which is very significant.
The turbines will be owned by a third party, Ecotricity, and we will purchase energy from them at a lower rate. We already have two turbines at our Dundee factory in Scotland and that site has seen some excellent benefits. Due to the need to focus on energy efficiency, I would say that the UK has done an extremely good job of working on developing renewable sources of energy.” Crawford says the site has also engaged the services of a full time energy manager and through his leadership and staff supporting of his initiatives the Ballymena plant has cut its energy consumption by about 24% over the last five years. “We continue to go down that path and we are sharing that with all the other factories around the world and we are seen as one of the leading Michelin factories in terms of our innovations in the reduction of energy consumption.”
Continuing the tradition Michelin not only prides itself on its product and process innovations but has always consistently demonstrated a respect for social responsibility and for the local communities in which it operates. The Ballymena site has supported various local initiatives in its 40-year history in the area and has forged strong links with the local community, especially through its Michelin Development arm, helping local businesses succeed with ‘free’ expertise and low cost loans.
This community focus is not simply altruistic but also makes good business sense so as to keep the local regions prosperous and is simply another example of the intrinsically innovative nature of Michelin. Such a forward thinking focus is undoubtedly what has made Michelin so successful. At Michelin Ballymena, future prosperity will continue to be guided by the Michelin Manufacturing Way while a constant drive for improvement is reciprocated through careful and structured investment.