It’s a little known fact that global technology giant, Sony, has its last remaining European manufacturing site nestled in the remote countryside of South Wales. And, with a history in South Wales stretching back forty years, the site has experienced highs and lows in equal measure discovers Jon Tudor.
Once a key employer in the South Wales area, the Sony UK Technology Centre (UK TEC) in Pencoed came under significant threat of closure in the early 2000s. To survive, and to regain the site’s reputation as an employer of choice, the site has had to significantly change its operations.
Facing up to this challenge, Sony UK TEC’s Managing Director, Steve Dalton OBE, set to work on a strategic change management plan which has shaped the site to what it is today – a digital centre of excellence. A transformation in culture was key to this journey.
The spur for change
Sony established its operations in Wales and built the first of two facilities in Bridgend in 1973, a second facility followed in 1992 in Pencoed, some three miles from the original factory. Both facilities centred around the manufacture of TV sets for the booming home and export markets.
Mr Dalton, a Sony employee of thirty years, recalls the old ethos at the site. “In those days it was very simple: we were a mass production site which was very labour intensive,” he says.
Over time, advances in LCD technology and evolving consumer tastes started taking effect. As a result, TV production at the plants steadily decreased resulting in the closure of the original Bridgend facility in 2005.
This represented a significant threat to the sustainability of the second factory in Pencoed, necessitating Sony UK TEC to act. “We had no choice but to take a view of business sustainability, the world of TV’s had changed and we had to do something to address this,” explains Dalton.
In 2005 Dalton got to work with his leadership team to create the factory’s future vision. “The issue was business sustainability, the idea was to navigate our own future, so we consulted the workforce who were faced with the decision that we needed to change.”
Dalton knew he would need something visual to communicate the change impetus and the elements needed to successfully move the site forward in order to gain workforce understanding and buy in. He also wanted the visual aid to emphasize that the employees themselves would sit at the core of this survival mission – that they were Sony’s most valued asset.
“Collectively we decided upon the Parthenon as the visual aid to use. It’s something that; has stood the test of time; has had many uses over the decades and is still standing today.
“The Parthenon pillars represented the four business areas we wanted to develop as part of our sustainability strategy,” says Dalton.
Additionally, the Sony UK TEC workforce said that a focus was needed on three operational areas it felt needed to be addressed for a prosperous future.
- Differentiation: to identify what would set us apart from the rest of the competition
- Financial competitiveness without compromise on quality
- Establishing knowledge heroes in all areas of the business such as engineering, manufacturing, supply chain, finance, and HR.
General manager, Gerald Kelly, says: “Steve made a fundamental change in how we do business in a global market, and he set about reversing the flow. By that I mean, instead of waiting for a corporate direction on what we will do tomorrow, Steve set about proposing what we could and should be doing tomorrow. He underpinned each argument based on a convincing business case and his approach was, is, relentless.”
Sometimes Dalton won his argument in weeks, really testing the site’s delivery capability recalls Mr Kelly. “In other cases it has taken up to two years but, generally, he wins the day. We knew what success would look like and what we needed to do to get there. This, coupled with a very clear vision of what our business would look like in five years time gave us our strategic advantage,” summarises Kelly.
“The most important strategic goal was to change the business from what was a high-volume, low-value consumer goods manufacturer into a high-value, high-skill, and low-volume operation.
“We did this by focusing on a new core business, providing full manufacture of broadcast and professional cameras and studio equipment to the broadcast industry worldwide.”
But there were obstacles to achieving this shift explains Kelly. “The line up at the time were standard definition products and to be sustainable we needed to capture the next generation of high-value products, high definition (HD).”
“We had diversified on a very small scale into broadcast cameras a number of years earlier, but we wanted to expand on this for the high-definition (HD) market. The TV studios of Europe were using these more and more and with each camera and camera system ranging in price from £30k to £100k plus.”
It was the right time to capitalise and capture the opportunities that lay within the emerging high-definition broadcast camera market comments Kelly, but doing so required vast changes in how the factory operated.
Implementing the plan
The biggest changes were in the skill sets, behaviours and values of the site, according to Dalton.
“Moving from mass production, when staff, also known as team players, typically spent 30-40 seconds on one product. Today, our employees can follow a more craft-based cycle time, where one person can spend hours assembling the camera. Team players had to develop their knowledge and skill set to deal with more parts and complex, higher capability operations.”
Additionally, Sony UK TEC aimed to capture the UK market for servicing Sony products and become the country’s sole Sony customer service centre, with the site managing returns and repairs for all Sony consumer products. More recently the customer service provision of the business has expanded to provide a pan-European service for the professional and broadcast product portfolio much of which is produced at Sony UK TEC.
Another aim was to develop a Contract Electronics Solutions business focused on engaging with existing and entrepreneurial companies to manufacture products on their behalf. Thus, supporting the business sustainability model and seizing new technology to further develop the site’s capability and credentials.
The final part of the jigsaw was the creation of an on-site business incubation centre. Acting as an incubator for established and start-up companies by working with local providers and universities. Not only did this activity provide a revenue stream but it also enabled collaboration between the residents and Sony UK TEC with an array of benefits for all concerned.
The new era
The implementation of these four areas and resulting cultural change proved inspired.
“People were no longer telling us what we were going to do – we were going to find it for ourselves. This spurred a new culture of ‘Defining a New Era of Ambition’. The site is now on its second phase of its five year visioning, with the latest vision as equally engaging, inspiring and as challenging as the first,” says Dalton.
Since the 2006 launch, the site has flourished to become Sony’s largest manufacturer of broadcast and professional cameras and camera systems outside of Japan. With camera products now sold across Europe, the USA and Japan, Sony UK TEC finds itself in the unique position of exporting camera products from Britain to the Land of the Rising Sun.
But perhaps the biggest encapsulation of Sony UK TEC’s recent success has been its production of the Raspberry Pi product.
Previously the bare bones computer – hailed as a game changer for building computer programming skills – was manufactured in China. This summer, Sony UK TEC produced its one millionth device since taking over production in mid-2012. Not bad for a site once regarded as a dead end.
“Our vision and ethos has been about navigating our own future, this has been essential to our ability to still be in existence,” Dalton believes. “Our people understand the focus on innovation and change. They have been through a lot they are battle hardened and, what they have done in the past seven years means they understand they have to keep moving forward.
“As a team we constantly explore how we can make our processes and techniques more effective and efficient whilst maintaining our reputation for manufacturing excellence. We are always searching to do something better today than yesterday.”
The future sees business sustainability still on the agenda for Sony UK TEC. With new Sony camera products being launched from the site, third-party contracts incoming, additional service business and a steady flow of increasing business tenants.
But Sony UK TEC won’t rest on its laurels promises Dalton. “We continue to work closely with our marketing teams and customers to understand the technology and camera marketplace and identify what new products we believe we can manufacture for the European market that would give us an advantage.” Given the remarkable turnaround of the last ten years, you would be hard pressed to bet against further success for the next decade.